ex 4

Chapter 4 – Foundations of Decision Making

Chapter Four: Foundations of Decision Making

Multiple Choice Questions

49. Re-ordering inventory from the same supplier in the first week of every month is an example ofa. failing to consider decision alternatives. b. a programmed decision. c. a non-programmed decision. d. risk.

50. When the outcome of a management decision is uncertain, the decision involves_______.a. bounded rationalityb. uncertain outcomesc. riskd. fewer feasible solutions

51. In general, the greater the risk in making a decision, the greater the a. outcomes. b. information available. c. rewards. d. uncertainty.

52. Harvey Jones made a decision when he was uncertain of the outcome. The decision he made is likely to be a. of poor quality. b. unacceptable. c. successful. d. risky.

53. _________ is the final step in the decision-making process. a. Implementing the decision b. Evaluating the decision c. Recognizing the decision d. Evaluating the alternatives

54. __________ is not one of the eight steps in the decision making process. a. Identifying the problem b. Analyzing alternative solutions c. Implementing the decision d. Delegating the decision making

55. __________ is the aspect of decision making that is based on such facts as costs, revenues, and product design specifications. a. Decision quality b. Escalation of commitmentc. Optimizing d. Satisficing

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56 _________ is when an alternative is chosen because the manager believes it is "good enough," to solve his or her problem. a. Optimizingb. Satisficingc. Incompleted. Maximizing

57. _____________ is used when managers make every decision, from the alternatives, based on a philosophy that you do you make the best decision, no matter how long it takes. a. Optimizing b. Satisficing c. Sub-optimizing d. Escalation of commitment

58. ____________ requires managers to select the best alternative from among multiple criteria or alternative solutions. a. Programmed decision-makingb. Optimizingc. Satisfyingd. Bounded rationality

59. ___________ is a term used to describe a home owner who is selling her house, when she makes a decision to sell her house to the first person who comes along, after getting the initial offer.a. Bounding rationality b. Satisficing c. Competitive d. Optimizing

60. Creativity refers to a. uncovering what is already there. b. creating something new. c. organizing already discovered items. d. criticizing the discovered items

61. When a plant manager who is trying to reduce turnover of production workers notices that turnover has decreased by 10 percent four months after he instituted a new training program, at which step in the rational decision-making process is this manager? a. Identify the problem.b. Evaluate the decision criteria.c. Analyze the alternatives.d. Evaluate the results.

(62. According to the concept of bounded rationality, decision makers are limited by _______.a. less than complete informationb. their habits

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c. timed. All of the above.

63. __________ is selecting the first minimally acceptable alternative. a. Bounded rationalityb. Unbounded rationalityc. Satisficingd. Rational decision-making

64. Suppose that you need a math elective to take in order to graduate. There are five different courses you could take. You call one friend and, on the basis of her terrific experience in one course, you choose that one. What would Herbert Simon call what you have just done?a. Bounded rationalityb. Unbounded rationalityc. Escalation of commitmentd. Rational decision-making

65. ________ is when a manager evaluates alternatives until she comes to one that meets some minimum standard of sufficiency, selects it, and then goes on to other problems without considering the remaining rational alternatives.a. Optimizingb. Satisficingc. Bounded Rationalityd. Rational decision-making

66. ______________ occurs when a manager purchases stock in a company and refuses to sell it even after it has dropped 40 percent in value over the past 6 months.a. Optimizingb. Satisficingc. Bounded Rationalityd. Escalation of Commitment

67. Managers will often not choose the decision alternative that rational decision making indicates to be best because they have a “vague feeling” that another alternative will be better. Which of the behavioral factors that influence decision-making does this behavior reflect?a. Bounded rationalityb. Escalation of commitmentc. Intuitiond. Satisficing

68. Ivan spoke out in a meeting in favor of a potential cost savings that would result from a new employee benefits program offered by the company. He later received information that showed that his initial decision about the cost savings was incorrect, but he was too embarrassed to publicly admit he was wrong, so he is sticking by his original statement. Ivan is experiencinga. bounded rationality.b. satisficing.c. escalation of commitment.d. poor use of rational making process.

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69. ____________ is one of the disadvantages of group decisions that typically results in groups that are very cohesive.a. Conflictb. Groupthinkc. Dominationd. Compromise

70. Which of the following is an advantage of group decision-making when compared to individual decision-making?a. The group process takes less time.b. Groupthink may occur.c. More decision alternatives are generated.d. One person can dominate the group.

71. ___________ occurred when Georgia-Pacific made a decision to spin off its holdings in Texas and Louisiana into the Louisiana-Pacific Corporation. a. Satisficingb. Programmed decision-makingc. Representative heuristicsd. Escalation of commitment

72. _________ decisions deal with situations where the factors are fairly structured and occur with some frequency.a. Satisficingb. Programmedc. Non-programmed d. Heuristic

73. Next year will be the first time that a certain regional manufacturing chemical manufacturing company will close one of their plants in Baton Rouge. The type of decisions in this situation that will be encountered by its upper levels of management are called __________ decisions.a. satisficingb. programmedc. non-programmed d. heuristic

74. “Decision making under risk” means ____________.a. the decision has no data on which to base his or her decisionb. the decision maker is used to dealing with high-risk situationsc. the decision maker knows all of the risks involved in the situationd. the decision maker can estimate the risk involved in making a decision

75. ____________ is a situation in which a manager who is deciding how to invest excess cash gets information from the bank that can describes various options available for type of investment, each of which have a guaranteed rate of return.a. Certaintyb. Uncertainty

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c. Riskd. Optimal decision-making

76. All of the following are examples of planning-function decisions excepta. Does the human resource evaluation process comply with federal laws?b. How difficult should individual goals be?c. What are the organization's long-term objectives?d. What might the competition be considering?

77. The first step in the decision-making process is which of the following?a. Develop the alternatives.b. Analyze alternatives.c. Identify decision criteria.d. Identify the problem.

78. The decision-making process concludes witha. analysis of alternatives.b. identification of a problem.c. identification of decision criteria.d. evaluation of decision effectiveness.

79. How do managers know when they have a disparity or discrepancy in the decision-making process? The best way is to compare their current state and some standard. Which of the following would not be a relevant standard?a. previously set goalsb. past performancec. the performance of some unit in or out of the organizationd. use future projections

80. Once a manager has identified a problem, the _____ that will be important in solving the problem must be identified.a. discrepanciesb. decision criteriac. scenariosd. factor weights

81. Price, size, gas mileage, color, options, and repair records are examples of which of the following when purchasing a new car?a. problemsb. decision criteriac. scenariosd. factor weights

82. The strengths and weaknesses of each alternative become obvious in which step of the decision making-process?a. Identify the problem.b. Identify the decision criteria.c. Analyze the alternatives.

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d. Implement the alternative.

83. Choosing the best alternative is a relatively simple matter if we have done a good job in assigning _____ in step five.a. the highest weighted scoreb. the weighted criteria correctlyc. the right decision makerd. None of the above.

84. After all factors have been determined, weights have been assigned, and alternatives have been identified, the next step in decision making is toa. identify the problem.b. identify the decision criteria.c. analyze the alternatives.d. implement the alternative.

85. Putting a decision into action and conveying the decision to the persons who will be affected by it is known asa. problem identification.b. decision implementation.c. rational decision making.d. irrational decision making.

86. The last step in the decision-making process is toa. evaluate the decision effectiveness.b. identify the decision criteria.c. analyze the alternatives.d. implement the alternative.

87. The fact that managers make consistent, value-maximizing choices within specified constraints is known as which of the following?a. implementation of the alternativeb. decision implementationc. rational decision makingd. irrational decision making

88. _____ implies that the outcome of every alternative is known.a. Bounded rationalityb. Unbounded rationalityc. Certaintyd. Uncertainty

89. When decisions must be made with limited information because full knowledge of the problem is unavailable and the probability of outcomes is unknown, the condition of __________ exists.a. uncertaintyb. certainty

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c. riskd. bounded rationality

90. Joe, the manager of Internet Made Easy, is concerned. He is trying, like all technological based companies, to stay ahead of the competition by being the first to offer the new services available on the Internet. His business offers training to local businesses, and so he must offer the latest available information; however, he must also advertise the classes and the content, which means going to the publisher with that information six weeks before a class is to begin. What should his next series of classes offer? Joe is operating under which of the following conditions?a. uncertaintyb. certaintyc. riskd. optimal decision making

91. Which of the following is not an assumption of the rational decision-making model?a. The problem is clear and unambiguous.b. A single well-defined goal is to be achieved.c. Preferences change slowly.d. Final choice will maximize economic payoff.

92. Creativity is formed when the elements of creative skills, expertise, and _____ intersect.a. personalityb. experiencec. task motivationd. None of the above.

93. Managers often seek solutions that are satisfactory and sufficient. This is known as which of the following?a. satisfactory decision makingb. satisficingc. riskd. optimal decision making

94. The strap of John's backpack tears off as he starts to throw it over his shoulder. On the way to school, he stops at the first store that carries backpacks, walks in, and purchases one off the front rack. John has just made what type of a decision?a. satisfactory decisionb. satisficing decisionc. risky decisiond. optimal decision

95. "Good" decisions are expected toa. produce "good" results.b. earn promotions for decision makers.c. be made quickly.d. appear to follow the rational process.

96. When decision makers construct simplified models that extract the essential features

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from a problem without capturing all the complexities of a problem, they are acting under which of the following?a. bounded rationalityb. unbounded rationalityc. uncertaintyd. heuristics

97. Herbert Simon, an economist and management scholar, found that within certain constraints, managersa. act rationally.b. engage in irrational decisions.c. act in their own self-interest.d. behave illegally.

98. In the decision-making process known as bounded rationality,a. the final choice maximizes economic payoff.b. the final choice minimizes economic payoff.c. the first choice that is "good enough" is chosen.d. all "good enough" choices are selected.

99. Because bounded rationality affects most managers, decisions made are strongly influenced by all of the following excepta. self-interest.b. organizational culture.c. power considerations.d. known outcomes.

100. When a manager engages in behaviors that speed up the decision-making process in order to avoid information overload, he is engaging in judgmental shortcuts ora. bounded rationality.b. unbounded rationality.c. uncertainty.d. heuristics.

101. The tendency for people to base their judgments on information that is readily available is known asa. availability heuristic.b. representative heuristic.c. escalation of commitment.d. optimal decision making.

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102. Jane just conducted the performance appraisals of five of her employees. Her appraisal was heavily influenced by the performance of the individuals during the last month. Jane's bias is an example of

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a. availability heuristic.b. representative heuristic.c. escalation of commitment.d. optimal decision making.

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103. Kay based the forecasted sales figure of the new product on last year's sales figures from a previous product. Kay is engaging in which of the following?a. availability heuristicb. representative heuristicc. escalation of commitmentd. optimal decision making

104. In an effort to demonstrate that an initial decision was not wrong, instead of searching for new alternatives, managers engage in which of the following?a. availability heuristicb. representative heuristicc. escalation of commitmentd. optimal decision making

105. Lon authorizes an additional $100,000 for the production of the new product. The cost of the new product seems to be increasing far beyond what was planned or even forecast. However, Lon continues to support the project. Lon is engaging ina. availability heuristic.b. representative heuristic.c. escalation of commitment.d. optimal decision making.

106. The supplier is late with the order of paper that is needed by the college during finals week. The secretary is sent to Wal-Mart to pick up an extra case until the paper arrives. This is an example of a(n) _____ problem.a. well-structuredb. ill-structuredc. programmedd. nonprogrammed

107. Problems where information is ambiguous or incomplete are which type of problem?a. well-structuredb. ill-structuredc. programmedd. nonprogrammed

108. When the petty cash in Elaine's drawer falls to less than $25, she places a request for additional funds to bring the total back to $100. This is an example of a(n) _____ decision.

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a. well-structuredb. ill-structuredc. programmedd. nonprogrammed

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109. Before being reimbursed for traveling expenses, the employee must file the following forms in the following order. This is an example of aa. rule.b. procedure.c. policy.d. nonprogrammed decision.

110. "No smoking allowed" is an example of which of the following?a. ruleb. procedurec. policyd. nonprogrammed decision

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111. "Whenever possible, we promote from within" is an example of which of the following?a. ruleb. procedurec. policyd. nonprogrammed decision

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112. "Only employees with top-secret clearance may enter the sealed room," is an example of aa. rule.b. procedure.c. policy.d. nonprogrammed decision.

113. Jill has just been given the assignment of developing the marketing strategy for the company's new product to be released at Christmas. What type of decision making will be required of Jill?a. well-structuredb. ill-structuredc. programmedd. nonprogrammed

114. Rules, procedures, and policies are most suitable for _____ problems.a. well-structuredb. ill-structured

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c. programmedd. nonprogrammed

115. As managers move up the organizational hierarchy, problems are more likely to becomea. well-structured.b. ill-structured.c. programmed.d. nonprogrammed.

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116. Programmed decisions minimize the need for managers to _____.a. act aloneb. make the same decision under similar circumstancesc. exercise discretiond. None of the above.

117. _____ use(s) software programs to encode the relevant experience of an expert and allow a system to act like that expert in analyzing and solving ill structured problems.a. Stand alonesb. Networksc. Microsoftd. Expert systems

118. The next step beyond expert systems is _____, which use computer software to imitate the structure of brain cells and connections among them. An example is sophisticated robots being used for their intelligence.a. organic networksb. neural networksc. cellular networksd. interfaced networks

119. Once in place, expert systems allow employee and lower level managers to make high quality decisions that previously could have been made only by _____.a. management expertsb. college professorsc. consultantsd. senior managers

120. The decision-making model consists of four styles: directive, analytic, behavioral, and _____.a. conceptual

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b. intuitivec. group interactiond. laggard

121. Peggy Juarez uses a decision-making style characterized by low tolerance for ambiguity and a rational way of thinking. They generally turn out to be fast decisions of a short run nature. What style does Peggy use?a. analyticb. conceptualc. directived. behavioral

122. The basic premise for the decision-making model is that individuals differ along two dimensionsa. degree of risk preference and position within the organizational hierarchy.b. experience and communication skills.c. way they think and tolerance for ambiguity.d. personality and attention to detail.

123. Which of the following styles of decision making is characterized by individuals who prefer complete information and consider several alternatives?a. analyticb. conceptualc. directived. behavioral

124. Jay tends to always look at the broad picture and likes to look at many alternatives. He focuses on the long run and looks for creative solutions. He prefers which of the following styles of decision making?a. analyticb. conceptualc. directived. behavioral

125. Group decisions provide _____ information than do individual ones.a. more currentb. more completec. more relevantd. more consistent

126. Many decisions fail after the final choice has been made because which of the following occurs?a. It was the wrong choice.b. The decision criteria weights were incorrect.

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c. People affected failed to accept the solution.d. Satisficing occurred.

127. Which of the following is not a disadvantage of group decision making?a. more time taken to reach a solutionb. minority dominationc. more alternativesd. groupthink

128. Which of the following is not an advantage of group decision making over individual decision making?a. increased legitimacyb. more complete informationc. fewer alternatives due to groupthinkd. increased acceptance of the decision

129. A problem with groupthink is that no one is actually in charge of making the final decision or outcome, which results in _____.a. ambiguous responsibilityb. role incoherencec. role ambiguityd. ambiguous delegation

130. Which of the following is not true about group decisions?a. Group decisions are faster.b. Group decisions tend to be more accurate.c. Group decisions are more creative.d. Group decisions are more widely accepted.

131. Which of the following is the most effective number of people to have in a group?a. 57b. 210c. 37d. 312

132. A method that can be used to overcome the tendency toward conformity in group decision making is which of the following?a. brainstormingb. nominal group techniquec. groupthink

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d. electronic meetings(

133. Which of the following is not allowed in a brainstorming session?a. clear definition of the problemb. criticism of poor ideasc. large number of alternativesd. recording of all alternatives

134. Which of the following group techniques allows group members to meet together, but allows independent thinking?a. brainstormingb. nominal group techniquec. groupthinkd. electronic meetings

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135. The _____ is the most recent approach to group decision making that blends the nominal group technique with sophisticated computer technology.a. nominal group techniqueb. electronic meetingc. groupthink processd. Delphi technique

136. A variation of the electronic meeting that links together media from different locations is a. e-commerce.b. the Delphi technique.c. video conference.d. e-conference.

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137. A country's cultural environment is reflected in the decisions made by managers. Which of the following is not true about the culture and decisions made by managers in India?a. Very senior-level managers make decisions.b. Managers are very likely to make safe decisions.c. Power distance is low.d. Uncertainty avoidance is high.

138. The cultural environment affects decisions made by managers. Which of the following is not correct?a. In Egypt, time pressures are low.b. In Italy, managers rely on tried or proven alternatives.c. In India, very senior managers make decisions.d. In Germany, organizations are flexible and organic.

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Scenario-Based Questions

Application of the Decision-Making Process

Net income has fallen for the second quarter, and Amanda is understandably worried. She knows at the board of directors meeting on Wednesday she will be closely questioned and expected to have a plan to avoid any third-quarter losses. Amanda begins to read slowly over the financial documents to try and ascertain areas that may be the cause. After much consideration, it appears that expenses have risen dramatically over the last few months. Amanda wonders why. She decides a meeting of the department heads is in order first thing tomorrow morning. At the meeting, Amanda would like to generate several possible solutions to the increased expenses. She wonders how to effectively explore all the options. At the meeting, the first option that is discussed is to downsize the research and development department since it is not essential to current operations. Several managers approve this plan. Amanda suggests that they need to look further at the issue. Several suggestions are made, many of which appear to be viable. Amanda wonders what to do next.

139. What is the first step in the decision-making process facing Amanda?a. Identification of the decision criteria.b. Assignment of weights to the decision criteria.c. Identification of the real problem.d. Selection of an alternative that will solve the problem.

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140. What should Amanda do after the problem is defined?a. Identify the decision criteria.b. Assign weights to the decision criteria.c. Identify the real problem.d. Select an alternative that will solve the problem.

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141. Which of the following would help Amanda develop a thorough list of alternative solutions to the problem?a. groupthinkb. brainstormingc. strategic planningd. escalation of commitment

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142. Once alternatives have been identified, the decision maker must critically analyze the _____ and _____ of each one, which become evident as they are compared with the criteria and weights established in steps 2 and 3.a. potentials; costsb. costs; effectsc. strengths; weaknesses

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d. images; profits

Application of Decision Making: A Contingency Approach

It seems that all Dave accomplishes is making decisions. Every time he turns around, someone wants him to decide on one more thing. Just today the secretary came in and asked if she could reorder paper for the fax machine. Somehow that seemed like a decision he really did not need to deal with. If he could avoid those types of decisions, then when the foreman came in with the news of a major piece of equipment that needs repair, in which the repair bill will be almost as much as a new machine, Dave could focus more time and attention on the more complicated issues.

143. Dave relies on rules of thumb or past experience to make decisions. Based on this tendency, he will most likelya. conduct extensive to find the best alternative solution.b. seek a creative solution.c. select the first solution that works.d. None of the above.

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144. After talking to Dave’s boss, it appears that Dave decided to repair rather than replace the old fax machine in the past because he thought it would be cheaper to fix it than replace it. As it turns out, it has cost Dave three times as much to fix the machine or buy a new machine over the past two years than it would have cost to purchase a new one. Yet, Dave still persists in wanting to repair the old machine. This is an example of ________.a. bounded rationalityb. ineffective decision-makingc. escalation of commitmentd. a programmed decision

145. The decision by the secretary to re-order paper from the same supplier first week of every month is an example of a. suboptimization. b. a programmed decision. c. a non-programmed decision. d. a risk.

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146. If Dave were to use the eight steps in the decision making process to decided on whether to repair or replace the fax machine he would bea. using a rule.b. using a procedure.c. using a policy.d. making a rational decision.

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147. According to Herbert Simon, having the copy machine repaired at 3 times the cost of having it replaced would be an example ofa. a well-structured decision.b. suboptimization.c. a policy.d. a nonprogrammed decision.

148. The problem of whether or not to order more fax paper isa. well-structured.b. ill-structured.c. programmed.d. nonprogrammed.

149. The problem of whether to repair the piece of equipment or to purchase a new machine is an example of a(n) _____ problem.a. well-structuredb. ill-structuredc. programmedd. nonprogrammed

150. Situations that are well-structured problems align closely with the assumptions underlying _____.a. perfect rationalityb. escalation of commitmentc. representative heuristicd. available heuristic

151. The decision as to when to order fax paper could be determined by aa. rule.b. procedure.c. policy.d. nonprogrammed decision.

152. The decision about how to handle the equipment repair/replacement is

a. well-structured.b. ill-structured.c. programmed.d. nonprogrammed.

153. Dave should be spending more time making _____ decisions and less time making

_____ decisions.a. nonprogrammed; programmedb. programmed; nonprogrammedc. rule; policyd. programmed; policy

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Application of Decision-Making Styles

Jeremy has noticed that the people within his organization make decisions in very different ways. Jackie is rational and has a low tolerance for ambiguity. She is efficient and generally makes decisions that are applicable to the short term. Andy tends to be very broad in his outlook and looks at many alternatives before making a decision. He generally focuses on the long term. Alexandra thinks intuitively and works well with others. She is open to suggestions and concerned about her coworkers. Jeremy himself wants to have complete information before making a decision and always carefully considers many alternatives.

154. Every decision maker in Jeremy’s organization brings a unique set of _____ to his or her problem solving efforts.a. brain patternsb. experiencesc. preconceived notionsd. personal characteristics

155. Jeremy's decision-making style can be characterized asa. directive.b. analytic.c. conceptual.d. behavioral.

156. The directive style of decision making is used bya. Jeremy.b. Jackie.c. Alexandra.d. Andy.

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157. The conceptual style of decision making is preferred bya. Jeremy.b. Jackie.c. Alexandra.d. Andy.

158. Alexandra seems to prefer the _____ decision-making style.a. directiveb. analyticc. conceptuald. behavioral

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159. The four decision-making styles seen in this question can be diagrammed as having two dimensions: way of thinking and

a. tolerance for ambiguity.b. time frame.c. way of living.d. tolerance for intuition.

(a; Moderate; p. 134; Ex. 49)

Short Discussion Questions

160. Distinguish between programmed and nonprogrammed decisions, and describe when managers in organizations can most appropriately use each type of decision.

(Moderate; pp. 130-132)

Programmed decision is a repetitive decision that can be handled by a routine approachNonprogrammed decisions are decisions that must be custom-made to solve unique and nonrecurring problems.

161. Describe the first step in the decision-making process. (Moderate; pp. 120)

Step One - The decision-making process begins with the identification of a problem, a discrepancy between an existing and a desired state of affairs.

162. Discuss the concepts of bounded rationality and satisficing and how they differ. (Easy; pp. 127-128)

Bounded Rationality is behavior that is rational within the parameters of a simplified model that captures the essential features of a problem.Satisficing is making a good enough decision. Managers seek solutions that are satisfactory and sufficient—or just good enough.

Numerous studies have added to our understanding of managerial decision making. These studies often challenge one or more of the assumptions of rationality. They suggest that decision making often veers from the logical, consistent, and systematic process that rationality implies. Despite the limits to perfect rationality, managers are expected to appear to follow the rational process (bounded rationality).

163. Explain the difference between certainty, risk, and uncertainty.

Certainty—the decision maker knows the outcome of every possible alternative.Risk—the probability that a particular outcome will result from a given decision.Uncertainty—a condition in which managers do not have full knowledge of the problem and cannot determine even a reasonable probability of alternative outcomes.(Easy; p. 124)

164. Compare and contrast the biases of availability heuristics, representative heuristics, and escalation of commitment in the decision-making process.

Availability heuristic—the tendency to base judgments on information that is readily available.

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Representative heuristic—the tendency to base judgments on things that are familiar.Escalation of commitment—an increased commitment to a decision despite negative information.(Moderate; pp. 128-129)

165. Discuss how rules, procedures, and policies differ.

Rules—explicit statements that leave no room for interpretation.Procedures—a series of interrelated sequential steps that must be used to address a problem.Policy—a general guide that establishes parameters for a decision, but leaves room for interpretation.(Easy; pp. 130-131)

166. Compare and contrast the types of problems and the differing types of decisions that are required at the three levels of management.

Lower management—well-structured problems and programmed decision making.Middle management—less well-structured problems and less programmed decision making.Top management—ill-structured problems and nonprogrammed decision making.(Moderate; p. 132; Ex. 4-8)

167. Explain groupthink.

A form of conformity in which group members withhold deviant, minority, or unpopular views in an attempt to give the appearance of agreement; undermines critical thinking and harms the final decision.(Easy; p. 137)

168. What is an electronic meeting?

The most recent approach to group decision making blends the nominal group technique with sophisticated computer technology to product anonymity, honesty, and speed.(Easy; p. 138)

Medium-Length Discussion Questions

169. Explain the relationship between groupthink and (1) group cohesiveness, (2) escalation of commitment, and (3) conformity.

(Moderate; pp. 129 and 137)

Groupthink is a form of conformity in which group members withhold deviant, minority, or unpopular views in order to give the appearance of agreement. As a result, groupthink undermines critical thinking in the group and eventually harms the quality of the final decision. Several research studies have found that groupthink symptoms were associated with poorer quality decision outcomes. But groupthink can be minimized if the group is cohesive, fosters

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open discussion, and has an impartial leader who seeks input from all members. Groupthink can lead to escalation of commitment, which is an increased commitment to a previous decision despite negative information.

170. Compare and contrast well-structured problems, ill-structured problems, programmed decision, and nonprogrammed decision.

Well-structured problems—straightforward, familiar, easily defined problems where a programmed decision can easily be made since it is a repetitive decision that can be handled routinely.Ill-structured problems—New, unique problems that are ambiguous, where information is incomplete and requires nonprogrammed decision making that is custom-made for that problem.Programmed decision—a repetitive decision that can be handled by a routine approach.Nonprogrammed decision—must be custom-made to solve unique and nonrecurring problems.(Moderate; pp. 130131)

171. When are groups more effective for making decisions?

Whether groups are more effective depends on the criteria for judging effectiveness. Group decisions are more accurate, better, more creative, and more easily accepted. Individual decisions are faster.(Easy; pp. 137-138)

172. Explain the group decision-making techniques of brainstorming, nominal group technique, and electronic meetings.

Brainstorming—idea-generating process that encourages alternatives; no criticism is allowed.Nominal group technique—group members are physically present, but operate independently by secretly writing a list of their suggestions.Electronic meeting—a type of nominal group technique; participants are linked by computer.(Challenging; pp. 137138)

173. Explain how decision-making in Japan is different from American decision making.

Japanese decision- making is more group oriented because they value conformity and cooperation. Management collects large amounts of information to be use in consensus-forming decisions called ringi. Managerial decisions focus on the long-term rather than on short-term profits, as is often the case in the US. Japanese employees tend to have higher job security.(Moderate; p. 139)

Comprehensive Essays

174. Describe advantages and disadvantage of groups compared to individuals when making decisions.

The group can gain increased acceptance for the choice, generate more and higher-quality solutions, have a greater pool of knowledge, and can integrate different perspectives, but individuals take less time to decide, have less conflict, and are not

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susceptible to groupthink or dominance.(Moderate; pp. 136-137)

175. List the steps in the decision-making process.

Identification of a problem. Identification of decision criteria. Allocation of weights to criteria. Development of alternatives. Analysis of alternatives. Selection of an alternative. Implementation of the alternative. Evaluation of decision effectiveness.

(Challenging; p. 1021; Ex. 42)

176. Explain the components of creative work.

Expertise is the foundation of all creative work. The potential is enhanced when people have abilities, knowledge, proficiencies, and similar expertise in their fields of endeavor. Creative-thinking skills encompass personality traits associated with creativity, the ability to use analogies, as well as the talent to see the familiar in a different light. Intrinsic task motivation must be present. It is the desire to work on something because it is interesting, involving, exciting, satisfying, or personally challenging. True creativity is found where they intersect.(Challenging; pp. 125-126)

177. Diagram and discuss the four decision-making styles based upon the dimensions of tolerance for ambiguity and way of thinking. See Exhibit 4-9 for diagram.

Directive—logical and efficient; make decisions that focus on the short term. Analytic—prefer to have complete information before making a decision; consider

many alternatives. Conceptual—very broad in outlook; tend to focus on the long run and often look for

creative solutions. Behavioral—think intuitively; work well with others; open to suggestions.

(Challenging; p. 134; Ex.49)

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