Test Bank For Modern Management Concepts and Skills 12th Edition Samuel C Certo

Test Bank for Modern Management: Concepts and Skills, 12th Edition: Samuel C.
Certo
Test Bank for Modern Management: Concepts and

Skills, 12th Edition: Samuel C. Certo
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Modern Management, 12e (Certo)
Chapter 8 Making Decisions
1) A decision is a choice made between two or more available alternatives.

Answer: TRUE
Page Ref: 182
Objective: 1
Difficulty: Easy
Classification: Conceptual
2) A programmed decision is typically a one-shot structured decision.

Answer: FALSE
Page Ref: 182
Objective: 1
Difficulty: Easy
3) A decision that is routine and repetitive, and typically handled in a specific way, is frequently
called a non-programmed decision.
Answer: FALSE
Page Ref: 182
Objective: 1
Difficulty: Easy
4) All decisions are either programmed or non-programmed decisions.

Answer: FALSE
Page Ref: 183
Objective: 1
Difficulty: Moderate
5) Decisions made through consensus usually take up lesser time than those made by a single
individual.
Answer: FALSE
Page Ref: 185
Objective: 1
Difficulty: Easy
6) Employees are more likely to be committed to a decision reached through consensus.

Answer: TRUE
Page Ref: 185
Objective: 1
Difficulty: Easy
1
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall
7) Decision-makers who believe the source of all good is outside of themselves, and therefore
rely heavily on suggestions from others, are classified as having an exploitative orientation.
Answer: FALSE
Page Ref: 185
Objective: 2
Difficulty: Easy
8) Decision-makers characterized by the desire to preserve the status quo as much as possible are
classified as having a hoarding orientation.
Answer: TRUE
Page Ref: 185
Objective: 2
Difficulty: Easy
9) A relevant alternative is one that is both feasible for solving an existing problem and also
feasible for implementation.
Answer: TRUE
Page Ref: 186
Objective: 2
Difficulty: Easy
10) In the decision-making process, it is important to accurately identify an existing problem

prior to listing the possible alternatives for solving the problem.
Answer: TRUE
Page Ref: 186
Objective: 3
Difficulty: Easy
11) Decision-making is essentially a problem-solving process that involves eliminating barriers

to organizational goal attainment.
Answer: TRUE
Page Ref: 187
Objective: 3
Difficulty: Easy
12) During the decision-making process, organizational goals should be kept in mind when
selecting the most beneficial alternative.
Answer: TRUE
Page Ref: 188
Objective: 3
Difficulty: Easy
2
13) Implementation of the chosen alternative is the final step in the decision-making process.
Answer: FALSE
Page Ref: 189-190
Objective: 3
Difficulty: Easy
14) Most organizational decisions are made under conditions of complete certainty.
Answer: FALSE
Page Ref: 190-191
Objective: 4
Difficulty: Easy
15) The confirmation bias is the tendency to believe certain outcomes because others believe the
same.
Answer: FALSE
Page Ref: 191
Objective: 5
Difficulty: Easy
16) According to the probability theory, the expected value for an alternative equals the income
that alternative would produce times its probability of producing that income.
Answer: TRUE
Page Ref: 192
Objective: 5
Difficulty: Easy
17) One of the disadvantages of group decision-making is that they cost the organization more
than individual decisions.
Answer: TRUE
Page Ref: 194
Objective: 6
Difficulty: Easy
18) Groupthink is a group decision-making process in which negative feedback on any suggested
alternative by any group member is forbidden until all members have presented alternatives that
they perceive as valuable.
Answer: FALSE
Page Ref: 194
Objective: 6
Difficulty: Easy
3
19) In the nominal group technique, group members never meet face to face.
Answer: FALSE
Page Ref: 195
Objective: 6
Difficulty: Easy
20) The Delphi group decision-making technique is a process that involves circulating
questionnaires on a specific problem among group members, sharing those results, and
continuing to recirculate and refine responses until a consensus is reached.
Answer: TRUE
Page Ref: 195
Objective: 6
Difficulty: Easy
21) A choice made between two or more available alternatives is a(n) ________.
A) directive
B) consensus
C) decision
D) alternative
E) objective
Answer: C
Page Ref: 182
Objective: 1
Difficulty: Easy
22) Which of the following is true about decisions and decision-making?

A) Managers make decisions primarily when performing the controlling function.
B) In the process of deciding, the alternatives are as important as the choice made.
C) Organizations only have to consider significant decisions that have a major impact on
business.
D) Decision making is the process of choosing the best alternative for reaching objectives.
E) All managerial decisions are of equal significance to the organization.
Answer: D
Page Ref: 182
Objective: 1
4
23) Programmed decisions are ________.
A) non-structured
B) one-shot decisions
C) routine and repetitive
D) made by top management
E) made by computers
Answer: C
Page Ref: 182
Objective: 1
Difficulty: Easy
24) Trendy Garb is a retail store that sells women's apparel. The store has comprehensive rules,
policies, and procedures for matters relating to customer complaints and product returns. Hence,
when faced with either of these situations, the store manager simply needs to refer to these
guidelines and proceed accordingly. This is an example of a(n) ________.
A) overlapping responsibility
B) nonprogrammed decision
C) rule of thumb
D) decision tree
E) programmed decision
Answer: E
Page Ref: 182
AACSB: Analytic Skills
Objective: 1
Classification: Application
25) Wispy's Burgers are a large fast-food chain based in Allentown, PA. They have franchises
across the US and are one of the top five fast food service restaurants. One of the responsibilities
of their inventory managers is to decide when to order beef patty stocks. Which of the following
is most similar to the given scenario?
A) RBX Shoes needs to take a decision on whether to build a manufacturing facility in China.
B) Restaurant managers in New York City must decide how to modify their businesses to
comply with the new law.
C) A chain of restaurants serving authentic Lebanese cuisine are required to decide whether to
shut down unprofitable franchises.
D) Tristate College needs to arrive at a decision to manage students who want to drop classes.
E) A chocolate manufacturer is required to decide whether they should acquire a chocolate
factory based in Asia.
Answer: D
Page Ref: 182
AACSB: Reflective Thinking Skills
Objective: 1
Difficulty: Difficult
Classification: Critical thinking
5
26) Nonprogrammed decisions are ________.
A) structured
B) one-shot decisions
C) routine and repetitive
D) less time-consuming
E) made by computers
Answer: B
Page Ref: 182
Objective: 1
Difficulty: Easy
27) Which of the following is an example of a nonprogrammed decision?

A) Determining how products will be arranged on the shelves of a supermarket.
B) Deciding how to handle customer complaints and product returns.
C) Identifying and selecting a new supplier of raw materials.
D) Evaluating the performance of a job applicant on a job sample test.
E) Writing an e-mail requesting one's boss for a few days off.
Answer: C
Page Ref: 183
Objective: 1
28) Confetti Corporation is a company that manufactures and distributes confectionery to various
stores around the world. They started out as a small shop on a street in Atlanta and grew into one
of the biggest companies that manufacture confectionery, with a listing on the NYSE. After half
a decade of successful global business, they have to decide whether to take over a major bakery
giant that is in need of revival. Which of the following is most similar to the given scenario?
A) A school in suburban Indianapolis is required to take a decision on how to deal with
absentees of 9th grade.
B) L'Antique, a chain store selling antique furniture, needs to decide whether or not to shut down
unprofitable outlets.
C) A big retailer has to decide on a policy to treat purchase returns immediately after the holiday
season.
D) A real estate major needs to decide how many laborers to hire from subcontractors to
complete one of its residential projects.
E) The HR department at IBM has to hire 200 employees immediately for an upcoming project.
Answer: B
Page Ref: 183
AACSB: Reflective Thinking Skills
Objective: 1
Classification: Critical thinking
6
29) Which of the following is a traditional technique for solving a programmed decision?
A) judgment
B) rules of thumb
C) habit
D) intuition
E) training
Answer: C
Page Ref: 183
Objective: 1
Difficulty: Easy
30) Judgment, intuition, and creativity would most likely be classified as ________.
A) modern decision-making techniques appropriate for programmed decisions
B) traditional decision-making techniques appropriate for nonprogrammed decisions
C) traditional decision-making techniques appropriate for programmed decisions
D) modern decision-making techniques appropriate for nonprogrammed decisions
E) techniques that can be used for programmed as well as nonprogrammed decisions
Answer: B
Page Ref: 183
Objective: 1
Difficulty: Easy
31) The proportion of the total management system that a decision will affect is called the
________.
A) scope of the decision
B) unity of command
C) span of control
D) level of management
E) discretionary area
Answer: A
Page Ref: 183
Objective: 1
Difficulty: Easy
7
32) The broader the scope of a decision, ________.
A) the higher the level of the manager who should make it
B) the fewer the number of decision makers involved
C) the lesser are the number of decision criteria
D) the faster the decision is made
E) the lesser the influence of extraneous factors
Answer: A
Page Ref: 184
Objective: 1
33) A _________ is an agreement on a decision by all the individuals involved in making that
decision.
A) law
B) consensus
C) fiat
D) declaration
E) clause
Answer: B
Page Ref: 184
Objective: 1
Difficulty: Easy
34) Which of the following is true about decisions taken through consensus?
A) It occurs after a quick discussion by members of the decision group.
B) It requires little involvement or assistance from the manager.
C) Its effectiveness can be hampered by poor interpersonal relations.
D) It is foolproof and successful at all times.
E) The decision group generally consists of only managers.
Answer: C
Page Ref: 184-185
Objective: 1
8
35) All of the English teachers at Springfield High School jointly developed and agreed on the
standards that students must achieve in order to graduate to the next grade. This is an example of
________.
A) bounded rationality
B) consensus
C) rules of thumb
D) intuitive decision making
E) groupthink
Answer: B
Page Ref: 185
Objective: 1
36) The main disadvantage of arriving at decisions through consensus is ________.

A) it results in very few practical solutions
B) it reduces employees' commitment to the decision
C) it involves time-consuming discussions
D) often the manager must make the decision
E) it focuses "several heads" on the decision
Answer: C
Page Ref: 185
Objective: 1
37) Decision makers who have a(n) ________ orientation believe that the source of all good is
outside themselves, and therefore rely heavily on suggestions from other organization members.
A) receptive
B) exploitative
C) hoarding
D) ideal
E) marketing-oriented
Answer: A
Page Ref: 185
Objective: 2
Difficulty: Easy
9
38) Even though Amy is the leader of a team, she finds it very hard to make decisions on her
own. She often asks her colleagues for their opinion on matters that come up and relies on these
inputs to make the final decision. What type of an orientation does Amy have?
A) marketing-oriented
B) hoarding
C) indecisive
D) exploitative
E) receptive
Answer: E
Page Ref: 185
Objective: 2
39) An organizational decision-maker who is willing to steal the ideas necessary to make good
decisions has a(n) ________ orientation.
A) hoarding
B) egoistic
C) exploitative
D) latent
E) ideal
Answer: C
Page Ref: 185
Objective: 2
Difficulty: Easy
40) Peter often asks his colleagues for their ideas and suggestions in order to make a decision.
However, he never gives credit to the individuals who gave him the ideas and instead passes the
ideas off as his own. Which of the following orientations does Peter have?
A) legitimate
B) exploitative
C) hoarding
D) marketing-oriented
E) ideal
Answer: B
Page Ref: 185
Objective: 2
10
41) The ________ orientation is found in decision makers who desire to preserve the status quo
as much as possible.
A) receptive
B) ideal
C) exploitative
D) hoarding
E) legitimate
Answer: D
Page Ref: 185
Objective: 2
Difficulty: Easy
42) Jack works at an advertising agency and leads a team of 8 graphic designers. Whenever he
has to make a decision, he does so by himself and rarely asks him team members for their
suggestions or inputs. Which of the following orientations does Jack have?
A) legitimate
B) exploitative
C) receptive
D) hoarding
E) marketing-oriented
Answer: D
Page Ref: 185
Objective: 2
43) Decision-makers who feel they are commodities and are only as valuable as the decisions
they make would most likely be classified as ________.
A) having a hoarding orientation
B) being receptive
C) being exploitative
D) having an ideal orientation
E) being marketing-oriented
Answer: E
Page Ref: 185
Objective: 2
Difficulty: Easy
11
44) The ________ decision-making orientation emphasizes the realization of the organization's
potential as well as that of the decision maker. Such decision makers try to use all of their talents
when making decisions.
A) ideal
B) exploitative
C) receptive
D) actualized
E) tangible
Answer: A
Page Ref: 186
Objective: 2
Difficulty: Easy
45) Ideal decision makers ________.

A) preserve the status quo
B) allow others to make decisions for them
C) accept little outside help in making decisions
D) are characterized by reason and sound judgment
E) take decisions that will enhance their value in the firm
Answer: D
Page Ref: 186
Objective: 2
46) An alternative that is considered feasible for solving an existing problem and for
implementation is ________.
A) relevant
B) tangible
C) stable
D) certain
E) intuitive
Answer: A
Page Ref: 186
Objective: 2
Difficulty: Easy
12
47) The first step in the decision-making process is to ________.
A) identify possible alternatives for solving an organizational problem
B) identify organizational objectives
C) identify an existing problem
D) gather feedback about an existing problem
E) implement the selected alternative
Answer: C
Page Ref: 186
Objective: 3
48) After identifying an existing problem, the next step in the decision-making process is
________.
A) conducting a gap analysis
B) listing alternative solutions
C) identifying organizational objectives
D) gathering problem-related feedback
E) exploring legal restrictions related to the problem
Answer: B
Page Ref: 188
Objective: 3
49) Which of the following best describes authority factors that limit the number of problem-
solving alternatives available?
A) the orders issued by a manager's supervisor is unclear
B) the level of organizational technology is inadequate for certain alternatives
C) the physical facilities of an organization are inappropriate for certain alternatives
D) a manager's superior tells the manager that a certain alternative is not feasible
E) the chosen alternative is too costly for the organization
Answer: D
Page Ref: 188
Objective: 3
13
50) Having too many alternatives may demotivate decision makers, which harms decision
making. This is known as the ________.
A) bandwagon effect
B) confirmation bias
C) paradox of choice
D) loss aversion effect
E) confidence bias
Answer: C
Page Ref: 188
Objective: 3
Difficulty: Easy
51) Jared recently sent an e-mail to all the members of his department asking them for their
opinions about where the department should have its quarterly team lunch. The response was
overwhelming as Jared received more than 40 suggestions. This is an example of the ________.
A) paradox of choice
B) bandwagon effect
C) confirmation bias
D) confidence bias
E) loss aversion effect
Answer: A
Page Ref: 188
Objective: 3
52) Which of the following is the final step in the decision-making process?
A) identify organizational objectives
B) gather feedback to find out if the problem is solved
C) implement the selected alternative
D) select the most beneficial alternative
E) take action
Answer: B
Page Ref: 190
Objective: 3
Difficulty: Easy
14
53) ________ refers to the fact that managers are constrained in terms of time, computational
power, and knowledge when making decisions.
A) Intuition
B) Unrealistic optimism
C) Bounded rationality
D) Rational ignorance
E) Cognitive bias
Answer: C
Page Ref: 190
Objective: 4
Difficulty: Easy
54) Which of the following is true about the definition of bounded rationality?
A) Managers rely on their inborn ability to synthesize information quickly and effectively.
B) Managers have access to complete and accurate information for making a decision.
C) Managers adhere to rules of the thumb when making decisions.
D) Statistical probabilities can be attributed to alternative potential outcomes.
E) Managers do not always have access to the resources required to make rational decisions.
Answer: E
Page Ref: 190
Objective: 4
55) ________ occurs when an individual makes a decision that is not optimal, but is good
enough.
A) Loss aversion
B) Satisficing
C) Intuition
D) Bias
E) Unrealistic optimism
Answer: B
Page Ref: 190
Objective: 4
Difficulty: Easy
15
56) John wants to start his own pet shop and has put out an ad for the post of shop assistant. He
hired the first candidate he interviewed without reviewing the remaining applications because the
first one fit the given criteria. What is this an example of?
A) confirmation bias
B) risk
C) bias
D) satisficing
E) heuristics
Answer: D
Page Ref: 190
Objective: 4
57) ________ refers to an individual's inborn ability to synthesize information quickly and
effectively.
A) Bounded rationality
B) Satisficing
C) Bias
D) Intuition
E) Optimism
Answer: D
Page Ref: 190
Objective: 4
Difficulty: Easy
58) Individuals often use ________, also known as simple rules of thumb, to make decisions.
A) bounded rationality
B) syntax
C) folksonomies
D) intuition
E) heuristics
Answer: E
Page Ref: 190
Objective: 4
Difficulty: Easy
16
59) ________ refers to the departure from rational theory that produces suboptimal decisions.
A) Uncertainty
B) Satisficing
C) Dogmatism
D) Bias
E) Bounded rationality
Answer: D
Page Ref: 190
Objective: 4
Difficulty: Easy
60) The bandwagon effect, a common decision-making bias, is ________.

A) the characteristic of an individual who prefers to avoid losses rather than acquire gains
B) the tendency to believe certain outcomes because others believe the same
C) the tendency to believe that our forecasts are better than they truly are
D) the tendency to search for information that supports one's preconceived beliefs
E) an individual's tendency to believe that he/she is less susceptible to risky events
Answer: B
Page Ref: 191
Objective: 4
Difficulty: Easy
61) The tendency to search for information that supports one's preconceived beliefs and to ignore
information that contradicts those beliefs is known as ________.
A) confirmation bias
B) loss aversion
C) the bandwagon effect
D) overconfidence
E) unrealistic optimism
Answer: A
Page Ref: 191
Objective: 4
Difficulty: Easy
17
62) Which of the following biases refers to individuals who tend to strongly prefer avoiding
losses rather than acquiring gains?
A) loss leaders
B) zero-risk bias
C) self-serving bias
D) loss aversion
E) money illusion
Answer: D
Page Ref: 191
Objective: 4
Difficulty: Easy
63) Overconfidence is ________.

A) the tendency to believe certain outcomes because others believe the same
B) the tendency to search for information that supports one's preconceived beliefs
C) the tendency to believe that our forecasts are better than they truly are
D) the tendency to strongly prefer avoiding losses rather than acquiring gains
E) the tendency to believe that one is less susceptible to risk than others
Answer: C
Page Ref: 191
Objective: 4
Difficulty: Easy
64) Individuals' tendency to believe that they are less susceptible to risky events than others is
referred to as ________.
A) the bandwagon effect
B) the confirmation bias
C) loss aversion
D) overconfidence
E) unrealistic optimism
Answer: E
Page Ref: 191
Objective: 4
Difficulty: Easy
18
65) ________ refers to situations where the probability that a particular outcome will occur is not
known in advance.
A) Uncertainty
B) Risk
C) Unrealistic optimism
D) Heuristics
E) Hazard
Answer: A
Page Ref: 191
Objective: 4
Difficulty: Easy
66) ________ refer(s) to situations in which statistical probabilities can be attributed to

alternative potential outcomes.
A) Optimism
B) Surety
C) Uncertainty
D) Risk
E) Heuristics
Answer: D
Page Ref: 191
Objective: 4
Difficulty: Easy
67) ________ refers to the likelihood that an event or outcome will actually occur.
A) Surety
B) Ratio
C) Probability
D) Brainstorming
E) Bias
Answer: C
Page Ref: 192
Objective: 5
Difficulty: Easy
19
68) The formula for expected value (EV) is ________.
A) interest rate x probability
B) income x probability
C) cost of risk x probability
D) cost of risk / probability
E) income / probability
Answer: B
Page Ref: 192
Objective: 5
Difficulty: Easy
69) Lisa is trying to decide on the location of her entrepreneurial venture–Flower Power, a
specialty wedding flower service. She has three possible locations (A, B, C) in mind. Lisa has
projected that in the first year of operation, under ideal conditions, her company would generate
$80,000 at Location A, $55,000 at Location B, and $45,000 at Location C. However, after
further analysis, Lisa has determined that there is only a 20 percent chance of ideal conditions
occurring during the first year of operation in Location A. Locations B and C have a .4 and a .8
probability, respectively, for ideal conditions during the first year of operations. Based on this
information, which location should Lisa choose?
A) Lisa should choose location A.
B) Lisa should choose location B.
C) Lisa should choose location C.
D) Lisa should choose either Location A or B because both are viable.
E) Lisa should choose either Location A or C because both are viable.
Answer: C
Page Ref: 192
Objective: 5
20
70) Lisa is trying to decide on the location of her entrepreneurial venture–Flower Power, a
specialty wedding flower service. She has three possible locations (A, B, C) in mind. Lisa has
projected that in the first year of operation, under ideal conditions, her company would generate
$80,000 at Location A, $55,000 at Location B, and $45,000 at Location C. However, after
further analysis, Lisa has determined that there is only a 20 percent chance of ideal conditions
occurring during the first year of operation in Location A. Locations B and C have a .4 and a .8
probability, respectively, for ideal conditions during the first year of operations. Based on this
information, the expected value for Location A is ________, while for Location B it is
________.
A) $400,000; $137,500
B) $16,000; $22,000
C) $64,000; $33,000
D) $96,000; $77,000
E) $320,000; $82,500
Answer: B
Page Ref: 192
Objective: 5
71) If (I) = $57,500 and (P) is .3, what is the expected value (EV)?
A) $17,250
B) $191,666
C) $74,750
D) $40,250
E) $131,466
Answer: A
Page Ref: 192
Objective: 5
72) When decisions are reached using probability theory, the alternative normally chosen is the
one with ________.
A) the lowest expected value
B) the highest expected value
C) the lowest cost/benefit ratio
D) the lowest risk
E) the highest risk
Answer: B
Page Ref: 192
Objective: 5
Difficulty: Easy
21
73) A graphic decision-making tool used to evaluate decisions containing a series of steps is
known as a(n) ________.
A) decision support system
B) decision theory
C) morphological box
D) decision tree
E) Delphi chart
Answer: D
Page Ref: 192
Objective: 5
Difficulty: Easy
74) Which of the following is an advantage of group decision-making?

A) Groups take lesser time than individuals to arrive at a decision because of the collective and
diverse mentality of groups.
B) Group decisions do not cost the organization as much as individual decisions do.
C) Group decisions are often of a higher quality than individual decisions because of the friendly
relationships that exist within the group.
D) Group decisions can be effectively controlled and influenced by the dominant members of the
group.
E) Members of the group tend to support the implementation of the decision more fervently than
they would if the decision had been made by an individual.
Answer: E
Page Ref: 194
Objective: 6
75) The phenomenon of compromising the quality of a decision to maintain relationships within
a team is referred to as ________.
A) doublethink
B) crowdsourcing
C) brainstorming
D) groupthink
E) scapegoating
Answer: D
Page Ref: 194
Objective: 6
Difficulty: Easy
22
76) A group decision-making process which forbids negative feedback on any suggested
alternative by any group member until all members have presented alternatives is known as
________.
A) groupthinking
B) brainstorming
C) doublethink
D) mindmapping
E) scapegoating
Answer: B
Page Ref: 194
Objective: 6
Difficulty: Easy
77) Which of the following is the first step in the process of brainstorming?
A) members comment on ideas
B) group leader chooses members
C) ideas are evaluated
D) group members state ideas
E) ideas are recorded
Answer: D
Page Ref: 194
Objective: 6
Difficulty: Easy
78) Becky is leading her team in an open discussion on the possibilities of implementing flexible
work hours for her department. One of the team members keeps interrupting with negative
feedback on the suggested ideas. He is breaking the cardinal rule of ________, one of the
methods of decision-making.
A) scapegoating
B) brainstorming
C) crowdsourcing
D) groupthinking
E) the Delphi technique
Answer: B
Page Ref: 194
Objective: 6
23
79) The nominal group technique of decision-making begins with ________.
A) members presenting their individual ideas orally
B) the entire group discussing their ideas simultaneously
C) group members writing down individual ideas on the matter being discussed
D) members writing their ideas on a board for all other members to see
E) a secret ballot which allows members to support their favorite ideas without fear
Answer: C
Page Ref: 195
Objective: 6
80) In the nominal group technique of decision-making, after all the members have discussed the
ideas, they ________.
A) discuss their ideas one-to-one with the group leader
B) present their personal views on each of the ideas discussed
C) write down each idea on the board for all the other members to refer to
D) take out a secret ballot to support their favorite idea
E) adopt and implement the most cost effective idea
Answer: D
Page Ref: 195
Objective: 6
81) Naomi leads a team of software developers. Because of the sudden increase in the number of
projects over the last few weeks, the team will need to work additional hours in order to meet the
various deadlines. She asks her team members to write down their individual ideas on whether
they should extend their daily work hours, or simply work on Saturday for the next couple of
months. They are also encouraged to come up with other solutions that can help them solve the
problem. Which of the following methods of decision-making is Naomi most likely using?
A) the Delphi technique
B) the nominal group technique
C) brainstorming
D) groupthinking
E) controlled creativity
Answer: B
Page Ref: 195
Objective: 6
24
82) The group decision-making process that involves the circulation of questionnaires on a
specific problem among group members is known as ________.
A) groupthink
B) brainstorming
C) the Delphi technique
D) the nominal group technique
E) the devil's advocate technique
Answer: C
Page Ref: 195
Objective: 6
Difficulty: Easy
83) The first step in the Delphi technique is ________.

A) asking group members to offer solutions
B) identifying a problem
C) allowing group members to meet face to face
D) preparing a questionnaire on the problem at hand
E) identifying experts on the matter being discussed
Answer: B
Page Ref: 195
Objective: 6
84) Decision making using the Delphi technique ends ________.

A) with a secret ballot which allows members to support their favorite ideas
B) when group members are allowed to finally meet face to face
C) after all the responses of all the group members have been consolidated
D) once a consensus problem solution is reached
E) after all questionnaires have been scored and tallied
Answer: D
Page Ref: 195
Objective: 6
25
85) Sid wants to involve his team of remotely located architects in a decision making exercise.
His plan is to circulate a questionnaire on the problem at hand, share the questionnaire results,
and continue to recirculate and redefine individual responses till a consensus is reached. Which
type of decision-making technique is Sid planning to implement?
A) groupthink
B) brainstorming
C) the Delphi technique
D) the nominal group technique
E) the devil's advocate technique
Answer: C
Page Ref: 195
Objective: 6
86) An advantage of brainstorming is that ________.

A) it allows members to know why individuals voted the way they did
B) it provides the option of supporting or rejecting an idea without fear of recrimination
C) it supports the expression of as many useful ideas as possible
D) it is suitable for teams whose group members are geographically dispersed
E) members are not required to defend their ideas
Answer: C
Page Ref: 195
Objective: 6
87) A disadvantage of brainstorming is that ________.

A) it seldom results in novel, useful ideas
B) it wastes the group's time on wildly impractical ideas
C) employees cannot support or reject an idea without fear of recrimination
D) it does not allow members to know why individuals voted the way they did
E) it does not facilitate an open discussion on the problem at hand
Answer: B
Page Ref: 195
Objective: 6
26
88) An advantage of the nominal group technique is that ________.
A) it prevents members from questioning the validity of others' ideas
B) it allows members to know why individuals voted the way they did
C) it allows members to come up with even wildly impractical ideas
D) it is suitable for teams whose group members are geographically dispersed
E) it provides the option of supporting or rejecting an idea without fear of recrimination
Answer: E
Page Ref: 195
Objective: 6
89) A disadvantage of the nominal group technique is that ________.

A) it wastes the group's time on wildly impractical ideas
B) it works best only in teams with geographically dispersed members
C) it does not allow members to know why individuals voted the way they did
D) members cannot support or reject an idea without fear of recrimination
E) it does not allow members to question one another
Answer: C
Page Ref: 195
Objective: 6
90) The advantage of the Delphi technique is that ________.

A) it allows members to come up with wildly impractical ideas
B) it allows members to know why individuals voted the way they did
C) it allows members to discuss ideas in person
D) it is suitable for gathering ideas from group members who are too geographically separated
E) it takes the least amount of time compared to the other decision-making techniques
Answer: D
Page Ref: 195
Objective: 6
91) A disadvantage of the Delphi technique is that ________.

A) it wastes the group's time on wildly impractical ideas
B) it does not provide anonymity to members
C) members tend to constantly redefine the problem itself
D) members are highly susceptible to groupthink
E) members are unable to ask questions of one another
Answer: E
Page Ref: 195
Objective: 6
27
92) What is a decision? Explain the difference between programmed and nonprogrammed
decisions.
Answer: A decision is a choice between two or more alternatives, while the decision-making
process is the process of choosing the best alternative for reaching objectives. We all face
decision situations every day. A decision situation may involve simply choosing whether to
spend the day studying, swimming, or golfing. It does not matter which alternative is chosen,
only that a choice is made.
Decisions are commonly classified as either programmed or nonprogrammed decisions. A
programmed decision is a routine decision that is repetitive and typically requires specific
handling methods. On the other hand, a nonprogrammed decision is typically a one-shot decision
that is less structured than a programmed decision.
Page Ref: 182
Objective: 1
Difficulty: Easy
93) What is consensus?

Answer: Consensus is one method a manager can use in getting a group to arrive at a particular
decision. Consensus is an agreement on a decision by all the individuals involved in making that
decision. It usually occurs after lengthy deliberation and discussion by members of the decision
group, who may be either all managers or a mixture of managers and subordinates.
The manager who asks a group to produce a consensus decision must bear in mind that groups
will sometimes be unable to arrive at a decision. Lack of technical skills or poor interpersonal
relations may prove insurmountable barriers to arriving at a consensus. When a group is
stalemated, managers need to offer assistance in making the decision or simply make it
themselves.
Page Ref: 184-185
Objective: 1
28
94) What are the orientations of weak decision makers?
Answer: Decision makers are the first element of the decision situation. They are the individuals
or groups who actually make the choice among alternatives. According to Ernest Dale, weak
decision makers usually have one of four orientations: receptive, exploitative, hoarding, and
marketing.
Decision makers who have a receptive orientation believe that the source of all good is outside
themselves, and therefore they rely heavily on suggestions from other organization members.
Basically, they want others to make their decisions for them.
Decision makers with an exploitative orientation also believe that the source of all good is
outside themselves, and they are willing to steal ideas as necessary to make good decisions. They
build their organizations on others' ideas and typically hog all the credit, extending little or none
to the originators of the ideas.
The hoarding orientation is characterized by the desire to preserve the status quo as much as
possible. Decision makers with this orientation accept little outside help, isolate themselves from
others, and are extremely self-reliant. They are obsessed with maintaining their present position
and status.
Marketing-oriented decision makers look on themselves as commodities that are only as valuable
as the decisions they make. Thus they try to make decisions that will enhance their value, and
they are highly conscious of what others think of their decisions.
Page Ref: 185
Objective: 2
29
95) Discuss briefly the steps in the decision-making process.
Answer: A decision is a choice of one alternative from a set of available alternatives. The
rational decision making process comprises the steps the decision maker takes to arrive at this
choice. The process a manager uses to make decisions has a significant impact on the quality of
those decisions. If managers use an organized and systematic process, the probability that their
decisions will be sound is higher than if they use a disorganized and unsystematic process.
Decision making is essentially a problem-solving process that involves eliminating barriers to

organizational goal attainment. The first step in this elimination process is identifying exactly
what the problems or barriers are, for only after the barriers have been adequately identified can
management take steps to eliminate them.
Once a problem has been identified, managers should list the various possible solutions. Few
organizational problems are solvable in only one way. Managers must search out the numerous
available alternative solutions to most organizational problems.
Next, decision makers can select the most beneficial solution only after they have evaluated each
alternative carefully. This evaluation should consist of three steps. Only after these steps have
been completed will that managers know which alternative seems most advantageous to the
organization.
The next step is to put the chosen alternative into action. Decisions must be supported by
appropriate action if they are to have a chance of success.
After the chosen alternative has been implemented, decision makers must gather feedback to
determine the effect of the implemented alternative on the identified problem. If the identified
problem is not being solved, managers need to seek out and implement some other alternative.
Page Ref: 186-190
Objective: 3
96) What is bounded rationality?

Answer: Herbert Simon questioned the ability of managers to make rational decisions. In his
opinion, managers are not able to make perfectly rational decisions. Instead, Simon put forth the
idea that managers deal with bounded rationality, which refers to the fact that managers are
bounded in terms of time, computational power, and knowledge when making decisions. In other
words, managers do not always have access to the resources required to make rational decisions.
As a result of bounded rationality, Simon suggests that managers satisfice, which occurs when an
individual makes a decision that is not optimal but is good enough.
Page Ref: 190
Objective: 4
30
97) What are heuristics and biases?
Answer: Heuristics are simple rules of thumb that individuals use to make decisions. Often,
heuristics introduce bias in decision-making processes. Bias refers to departures from rational
theory that produce suboptimal decisions. In other words, when managers rely on rules of thumb
when making decisions, these decisions are often flawed.
Page Ref: 190
Objective: 4
Difficulty: Easy
98) What is the probability theory? Define probability and expected value. How are they related
to each other?
Answer: Probability theory is a decision making tool used in situations where the decision
maker is not completely sure of the outcome of a particular possible alternative course of action.
Probability refers to the likelihood that a particular event or outcome will occur. The expected
value of an outcome is the income a specific alternative would produce multiplied by probability
that it will produce that income.
Page Ref: 192
Objective: 5
Difficulty: Easy
99) Discuss the advantages of group decision-making.

Answer: While the decision-making process normally applies to individual decision-makers,
managers often have the option of involving a group in the process. One advantage of doing so is
that groups often come up with more and better alternatives than an individual decision-maker
because they can draw upon the diversity and the experiences of the group members. Also, when
the group makes the decision, the members tend to support its implementation, and generally are
more supportive of the group decision as they tend to perceive it as their own.
Page Ref: 193-194
Objective: 6
Difficulty: Easy
100) What are the disadvantages of group decision-making?

Answer: Having groups rather than individual managers make organizational decisions may also
involve some disadvantages. Perhaps the one most often discussed disadvantage is that it takes
longer to make a group decision because groups must take the time to present and discuss all the
members' views. Another disadvantage is that group decisions cost the organization more than
individual decisions do simply because they take up the time of more people in the organization.
Finally, group decisions can be of lower quality than individual decisions if they become
contaminated by the group members' efforts to maintain friendly relationships among
themselves.
Page Ref: 194
Objective: 6
Difficulty: Easy
31
Test Bank for Modern Management: Concepts and Skills, 12th Edition: Samuel C. Certo
101) Explain brainstorming as a group decision process.

Answer: Brainstorming is a group decision-making process in which negative feedback on any
suggested alternative by any group member is forbidden until all members have presented
alternatives that they perceive as valuable. Brainstorming is carefully designed to encourage all
group members to contribute as many viable decision alternatives as they can think of. Its
premise is that if the evaluation of alternatives starts before all possible alternatives have been
offered, valuable alternatives may be overlooked. During brainstorming, group members are
encouraged to state their ideas, no matter how wild they may seem, while an appointed group
member records all ideas for discussion.
Page Ref: 194
Objective: 6
Difficulty: Easy
32
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1) A decision is a choice made between two or more available alternatives.

2) A programmed decision is typically a one-shot structured decision.

4) All decisions are either programmed or non-programmed decisions.

6) Employees are more likely to be committed to a decision reached through consensus.

10) In the decision-making process, it is important to accurately identify an existing problem

11) Decision-making is essentially a problem-solving process that involves eliminating barriers

22) Which of the following is true about decisions and decision-making?

27) Which of the following is an example of a nonprogrammed decision?

36) The main disadvantage of arriving at decisions through consensus is ________.

45) Ideal decision makers ________.

60) The bandwagon effect, a common decision-making bias, is ________.

63) Overconfidence is ________.

66) ________ refer(s) to situations in which statistical probabilities can be attributed to

74) Which of the following is an advantage of group decision-making?

83) The first step in the Delphi technique is ________.

84) Decision making using the Delphi technique ends ________.

86) An advantage of brainstorming is that ________.

87) A disadvantage of brainstorming is that ________.

89) A disadvantage of the nominal group technique is that ________.

90) The advantage of the Delphi technique is that ________.

91) A disadvantage of the Delphi technique is that ________.

93) What is consensus?

Decision making is essentially a problem-solving process that involves eliminating barriers to

96) What is bounded rationality?

99) Discuss the advantages of group decision-making.

100) What are the disadvantages of group decision-making?

101) Explain brainstorming as a group decision process.

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