CHAPTER 4: INDIVIDUAL AND GROUP DECISION MAKINGMultiple Choice Questions

1. Which of the following is NOT a part of the solution phase of decision making?a. generating alternativesb. selecting the preferred solutionc. implementing the chosen course of actiond. identifying a problem or opportunity

2. The formulation process includes of all of the following EXCEPT _____.a. identifying a problem or opportunityb. developing desired performance expectationsc. diagnosing the factors affecting the problem or opportunityd. monitoring a solution to a problem after it has been implemented

3. A _____ exists when a manager detects a gap between existing and desired performance.a. problemb. situationc. vacuumd. taxonomy

4. The process of decision making can be divided into which of the following distinct categories?a. formulation and solutionb. discussion and analysisc. attention and interestd. solutions and methodology

5. Which of the following is the first step in the rational decision-making model?a. analyzing alternatives b. determining sources and reasons for resistancec. supporting intuitive decisions with scientific proof d. identifying decision situations

6. A manager at a local bookstore needs to hire a new employee. She has decided that the most important thing is for the potential employee to be well-read. Sales experience and an outgoing personality are secondary qualifications. The manager’s decisions are an example of which stage of the classical decision making model?a. Step 1 – identifying problems and opportunitiesb. Step 2 – developing objectives and criteria

58Copyright © (2009) Pearson Education, Inc. Publishing as (Prentice Hall)

c. Step 3 – generating alternativesd. Step 4 – analyzing alternatives

7. The subjectively expected utility (SEU) model asserts that managers _____.a. attempt to rationalize their choices after they have been madeb. pursue alternatives that have a high probability for yielding successc. use standard operating procedures to make programmed decisionsd. choose the alternative they subjectively believe maximizes the desired outcome

8. Why can monitoring and evaluating results be a difficult process?a. Information that is easy to collect can obscure what is important.b. People are reluctant to give or receive negative information.c. Objectives and standards must be established during this phase. d. The subjectively expected utility model must be strictly applied.

9. According to the classical model, which of the following is NOT a component of implementing a decision?a. generating alternatives to achieve the desired resultsb. assessing sources and potential reasons for resistance to the decisionc. assessing resources required to implement the decision effectivelyd. determining the chronology and sequence of actions to implement the decision

10. The classical model is built on which of the following assumptions?a. Decision makers are rational.b. Objectives can change at any time.c. There may be unknown alternatives.d. Decision makers seek minimally acceptable solutions.

11. _____ is the tendency to ignore or avoid certain information, especially if that information is ambiguous. a. Information biasb. Selective perceptionc. Cognitive complexityd. Uncertainty absorption

12. Informational bias, uncertainty absorption, and selective perception are _____.a. phases of the classical modelb. phases of the reflexive modelc. factors inhibiting accurate monitoring and evaluationd. factors inhibiting accurate problem identification and analysis

59Copyright © (2009) Pearson Education, Inc. Publishing as (Prentice Hall)

13. When a young couple looked for a house to buy, they settled on the second place they saw because the price was reasonable and the house had several features they wanted. This type of decision is best characterized as _____.a. satisficing b. rational decision makingc. retrospective decision makingd. interpersonal reflection

14. The bounded rationality model assumes that _____.a. the problem or opportunity being considered is clearb. people have more than enough time to process informationc. although people seek the best solution, they usually settle for much lessd. decision makers have access to all the information they need to make a decision

15. A plant manager needs to find a vendor who can reliably supply a chemical that is needed for a new process established at the plant. She looks at the vendors that have proved reliable in the past. What is the manager doing in only looking at vendors she has used previously?a. She is making a programmed decision.b. She is applying Gresham’s law of planning. c. She is applying the retrospective decision model. d. She is applying a heuristic to limit her search.

16. The bounded rationality model asserts that the decision maker is a/an _____; the classical model asserts that the decision maker is a/an _____.a. satisficer; optimizerb. optimizer; satisficerc. entrepreneur; managerd. manager; entrepreneur

17. A _____ is a rule that limits a search to areas that have high probabilities of yielding success.a. heuristicb. structured incursionc. decision-making paradigmd. subjectively expected utility

18. The _____ focuses on how decision makers attempt to rationalize their choices after they are made. a. retrospective decision model

60Copyright © (2009) Pearson Education, Inc. Publishing as (Prentice Hall)

b. nominal group techniquec. rational model of decision makingd. bounded rationality model

19. _____ usually make non-programmed decisions; whereas, _____ usually make programmed decisions.a. Top managers; lower-level managersb. Top managers; middle managersc. Lower-level managers; top managersd. Middle managers; top managers

20. _____ is primarily a subconscious process, in which a decision is identified and a preferred alternative is selected. a. Intuitive decision makingb. Rational decision makingc. Extra sensory perceptiond. Retrospective rationality

21. A student wants to attend a Colorado university, primarily because he loves to ski, a sport for which Colorado is well known. He compares the Colorado school with schools in Louisiana, Alabama, and Texas; and then claims that the Colorado school is superior. The student’s decision is based on which of the following models?a. the classical modelb. the bounded rationality modelc. the retrospective decision modeld. the rational model

22. _____ involve standard responses to simple or routine problems; in contrast, _____ require the use of conceptual skills to solve complex or novel problems. a. Nominal decisions; integrated decisions b. Real-time interventions; group processesc. Programmed decisions; nonprogrammed decisionsd. Structured debates; dialectical inquiries

23. In most organizations, whether an employee tends to make programmed or nonprogrammed decisions usually depends on _____.a. the employee’s place in the organizational hierarchyb. the number of decisions the employee makesc. the capacity of the employee for intuitive decision makingd. the dynamism of the employee’s workplace

24. According to Gresham’s law of planning, managers tend to _____.a. delegate programmed decisions so they can deal with nonprogrammed decisions

61Copyright © (2009) Pearson Education, Inc. Publishing as (Prentice Hall)

b. allow programmed activities to overshadow nonprogrammed activitiesc. defer simple decisions so they can address more difficult decisionsd. apply standard operating procedures to nonprogrammed decisions

25. All of the following EXCEPT _____ are problem characteristics that influence the effectiveness of a decision. a. unfamiliarityb. accountabilityc. complexityd. ambiguity

26. Which of the following is NOT true regarding group decision making?a. Groups tend to work more slowly than individuals.b. Groups are often dominated by an individual or clique.c. Groups tend to consider fewer alternatives than individuals.d. Group decision making can serve as a useful political function.

27. What advantage do groups have over individuals when making decisions?a. Groups have a narrower focus.b. Groups have far less bias than an individual has.c. Groups generally make decisions more quickly and authoritatively.d. Groups bring greater cumulative knowledge to problems.

28. A group would probably perform better than an individual would when _____.a. hoping to come to a decision quicklyb. looking for a wide range of alternative solutions to a problemc. evaluating the risks and dangers associated with a decisiond. looking for the decision maker to take responsibility for the decision

29. When a group’s decision-making process is controlled by groupthink, their decisions are characterized by all of the following EXCEPT _____.a. limited search for informationb. limited analysis of alternativesc. rejection of expert opinionsd. extensive contingency plans

30. _____ include illusions of morality, stereotyping, self-censorship, mindguards, and illusions of unanimity.a. Structured debatesb. Symptoms of groupthinkc. Steps in rational decision makingd. Factors of fast decision making

62Copyright © (2009) Pearson Education, Inc. Publishing as (Prentice Hall)

31. Which of the following can help a company to overcome groupthink?a. using outside experts to challenge the groupb. assigning a devil’s advocate role to one member of the groupc. establishing several independent groups to examine the same problemd. all of the above

32. A university student realizes in her fourth year of school that she no longer likes accounting and would rather pursue art history. Because she has already committed a significant amount of time and money to accounting, she decides to stick with her current degree. Her decision is an example of _____.a. groupthinkb. escalating commitmentc. Gresham’s law of planningd. the implicit favorite model

33. All of the following EXCEPT _____ can minimize the effects of escalation of commitment.a. appointing a devil’s advocateb. trying to “pull victory out of the jaws of defeat”c. creating an atmosphere that is not dominated by consistencyd. recognizing that investments made in the past are “sunk” costs

34. Which of the following is NOT one of the basic elements that lead to escalating commitment?a. People remain committed to a course of action because of a need to justify

previous decisions to others.b. A norm for consistency deepens commitment to prior decisions.c. People have a tendency to commit to a course of action when they value the goal

a great deal.d. People usually treat investments made in the past as unrecoverable (sunk) costs.

35. As it pertains to escalation of commitment, _____ is simply a belief that future courses of action are rational and correct.a. prospective rationalityb. selective perception c. intuitive decision makingd. perceptual distortion

63Copyright © (2009) Pearson Education, Inc. Publishing as (Prentice Hall)

36. A manager plans to form a group in which all of the members want to participate in making an important decision. Which of the following actions would be the LEAST effective in helping the manager form the group?a. Choose group members with relevant content knowledge.b. Show them that the organization values their participation. c. Inform them that participation is expected from all employees.d. Assure them that their participation will lead to outcomes they value.

37. Which of the following is the main benefit of using cross-functional teams to help make decisions?a. It increases the homogeneity of the team. b. All team members have complementary knowledge, skills, and abilities. c. Each team member has unique knowledge that adds value to the decisions.d. None of the above

38. Which one of the following is NOT an advantage of participative decision making?a. It clarifies for employees how the decision being made will affect them.b. It increases the likelihood that employees will work for rewards they value.c. It narrows the amount of control employees have over their work activities.d. It heightens the effects of social influence on behavior.

39. Effective participative decision making requires that group members_____.a. understand group dynamicsb. scan the environment to identify problemsc. exercise creativity when generating alternativesd. all of the above

40. Which of the following is NOT a characteristic of a high-velocity industry?a. Mistakes are costly.b. Reliable information is plentiful.c. Recovering from missed opportunities is difficult.d. High-quality, rapid decision making is closely related to corporate performance.

41. Which one of the following is NOT a factor that influences a manager’s ability to make fast decisions in high-velocity environments?a. self censorshipb. real-time informationc. two-tiered advice processd. consensus with qualification

64Copyright © (2009) Pearson Education, Inc. Publishing as (Prentice Hall)

42. How are devil’s advocacy, multiple advocacy, and dialectical inquiry similar?a. They can all lead to groupthink.b. They all contribute to the structured-debate process.c. They expedite the problem-solution process.d. They challenge the assumptions of the rational decision-making model.

43. If you are a decision maker, which one of the following questions pertains to the characteristics of the environment in which you will be making a decision? a. Does the problem seem quite ambiguous?b. Does the problem seem stable or volatile?c. Are you under significant time pressures to make the decision?d. Do you feel overwhelmed by the amount of information you must process?

44. Which of the following techniques is NOT used in a structured debate?a. devil’s advocateb. multiple advocacyc. dialectical inquiryd. nominal group technique

45. How does dialectical inquiry enhance group decision making?a. by continuously refining proposed solutions, ensuring that the final solution is as

good as it can possibly beb. by questioning the underlying assumptions of problem formulation, forcing group

members to "think outside the box"c. by considering the positive and negative aspects of proposed solutions, then

combining those solutions so that the negative aspects are eliminatedd. by coming to decisions within the group using secret ballots, so the actual

decisions of group members remain unknown to the group at large

46. _____ improves decision making by assigning several group members to represent the opinions of various constituencies that might have an interest in the decision.a. Brainstorming b. Devil’s advocacyc. Multiple advocacyd. Dialectical inquiry

47. Which of the following is NOT a technique for stimulating creativity in order to improve decision making?a. brainstormingb. dialectical advocacy

65Copyright © (2009) Pearson Education, Inc. Publishing as (Prentice Hall)

c. nominal group techniqued. delphi technique

48. The delphi technique is a process in which group members_____.a. meet face-to-face to debate the issuesb. ignore the obvious ethical or moral consequences of their decisions c. provide potential solutions to a problem via carefully designed questionnairesd. rank potential solutions to a problem until a clearly favored solution emerges

49. In the nominal group technique, group members do NOT _____.a. meet face-to-faceb. use a round-robin procedure to present their ideasc. generate creative solutions without evaluating their meritsd. rank various ideas or solutions silently and independently

50. Research has shown that groups using computer-mediated communication to complete tasks take ____ to complete their work and members experience _____.a. less time; more satisfactionb. more time; less satisfactionc. more time; more satisfactiond. less time; less satisfaction

Short Essay Questions

51. What are the two fundamental stages of decision making? (p. 85, AACSB: Analytic Skills)

The decision-making process can be divided into two distinct categories. Formulation involves identifying a problem or opportunity, acquiring information, developing desired performance expectations, and diagnosing the causes and relationships among factors affecting the problem or opportunity. Solution involves generating alternatives, selecting the preferred solution, and implementing the decided course of action.

52. What is the rational (classical) model of decision making? (pp. 85 – 89, AACSB: Analytic Skills)

The rational model assumes that the decision maker goes through a series of rational steps – identifying decision situations, developing objectives and criteria, generating alternative solutions, analyzing alternatives, selecting alternatives, implementing the decision, and monitoring the results.

66Copyright © (2009) Pearson Education, Inc. Publishing as (Prentice Hall)

53. What is selective perception? (p. 90, AACSB: Analytic Skills)

Selective perception is a tendency to ignore or avoid certain information, especially if that information is ambiguous. As such, it inhibits a person’s ability to identify and analyze problems.

54. Explain the role of satisficing in the bounded rationality model. (p. 91, AACSB: Analytic Skills)

Satisficing is the tendency for a decision maker to accept the first alternative that meets his or her minimally acceptable requirements, instead of pushing on to find an alternative that produces the best results. With satisficing, the decision maker is “settling for less.”

55. Contrast programmed and nonprogrammed decisions. (p. 92, AACSB: Analytic Skills)

A programmed decision is a standard response to a single or routine problem. The nature of the problem and the possible solutions are well defined and clearly understood by the decision maker. A nonprogrammed decision is a response to a problem that is poorly defined or novel. No alternative is clearly correct, and past decisions are of little help.

56. What is Gresham’s law of planning? (p. 93, AACSB: Analytic Skills)

Gresham’s law of planning states that there is a tendency for managers to let programmed activities overshadow nonprogrammed activities. As a result, managers sometimes do not get to the more difficult and perhaps important decisions they must make.

57. What are the advantages of group decision making? (p. 94, AACSB: Communication)

Groups can accumulate more knowledge and facts; groups have a broader perspective and consider more alternatives; participation in group decisions boosts satisfaction with and support for decisions; and group decision processes serve important communication and political functions.

58. What is groupthink? (p. 95, AACSB: Communication)

Groupthink is a mode of thinking in which pursuit of agreement among members becomes so dominant that it overrides a realistic appraisal of alternative courses of action.

59. What is escalation of commitment? (p. 98, AACSB: Analytic Skills)

67Copyright © (2009) Pearson Education, Inc. Publishing as (Prentice Hall)

Escalation of commitment is the tendency to exhibit greater levels of commitment to a decision as time passes and investments are made in the decision, even after significant evidence emerges to indicate that the original decision was incorrect.

60. How can creativity be stimulated during the problem-solution process? (p. 105)

Brainstorming, the nominal group technique, and the delphi method can be used to stimulate creativity

68Copyright © (2009) Pearson Education, Inc. Publishing as (Prentice Hall)