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Chapter 5 Perception and Individual Decision Making

MULTIPLE CHOICE What Is Perception and Why Is It Important? 1. A process by which individuals organize and interpret their sensory impressions in order to give meaning to their environment is called: a. interpretation. b. environmental analysis. c. perception. d. outlook. (c; Easy; p. 123) Factors Influencing Perception 2. What one perceives _______ objective reality. a. is always the same as b. can be substantially different from c. should be the same as d. is considered (b; Easy; p. 123) 3. Which one of the following is not a factor that influences perception? a. target b. society c. perceiver d. situation (b; Easy; p. 124) 4. If two people see the same thing at the same time yet interpret it differently, the factors that operate to shape their dissimilar perceptions reside in: a. the perceiver. b. the target being perceived. c. the timing. d. the context of the situation in which the perception is made. (a; Challenging; p. 124) 5. Personal characteristics of the individual perceiver include all of the following except: a. his/her attitudes. b. personality. c. expectations. d. location. (d; Moderate; Exh. 5-1; p. 124)

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The focus of a person’s attention appears to be influenced by: a. interests. 87

b. past experiences. c. expectations. d. all of the above (d; Moderate; p. 124) 7. Which of the following is not true about our perceptions of a target? a. Objects that are close together will be perceived together rather than separately. b. Persons that are similar to each other tend to be grouped together. c. Targets are usually looked at in isolation. d. Motion, sounds, size, and other attributes of a target shape the way we see it. (c; Moderate; p. 124) 8. The time at which an object or event is seen is an example of a _____ factor influencing the perceptual process. a. perceiver b. target c. context of the situation d. reality (c; Moderate; pp. 124-125) Person Perception: Making Judgments About Others 9. The theory that has been proposed to develop explanations to explain that we judge people differently depending on what meaning we assign to their behavior is: a. behavioral theory. b. judgmental theory. c. equity theory. d. attribution theory. (d; Moderate; p. 125) 10. The most relevant application of perception concepts to OB is: a. person perception. b. context perception. c. situation perception. d. reality perception. (a; Challenging; p. 125) 11. When individuals observe behavior, they attempt to determine whether it is internally or externally caused. This is the: a. fundamental attribution error. b. self-serving bias. c. attribution theory. d. selective behavior theory. (c; Moderate; p. 125) 12. The determination of whether an individual’s behavior is externally or internally caused depends on all of the following factors except: a. distinctiveness. b. consensus. 88

c. consistency. d. perception. (d; Moderate; p. 125) 13. Internally caused behaviors are: a. those that are believed to be under the personal control of the individual. b. resulting from personality traits. c. resulting from outside causes. d. forced upon a person by the situation. (a; Easy; p. 125) 14. Which of the following is not true about attribution theory? a. It tries to attribute causes to specific behaviors. b. The cause of behavior may be internal. c. The cause of behavior may be external. d. Behavior can be attributed to one’s heredity. (d; Moderate; p. 125) 15. Which of the following is an example of externally caused behavior? a. An employee is late because he was partying late and then overslept. b. An employee is late because of a major accident that tied up traffic. c. An employee was fired because he did not possess the necessary skills. d. An employee was promoted because he was intelligent. (b; Challenging; p. 125) 16. Whether an individual displays different behaviors in different situations is referred to as: a. continuity. b. integrity. c. distinctiveness. d. flexibility. (c; Moderate; p. 125) 17. If everyone who is faced with a similar situation responds in the same way, attribution theory states that the behavior shows: a. consensus. b. similarity. c. reliability. d. consistency. (a; Moderate; p. 125)

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Janice is late for work each day by about ten minutes. This behavior exhibits: a. consensus. b. similarity. c. reliability. d. consistency. (d; Moderate; pp. 125-126) 89

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The more consistent a behavior, the more the observer is inclined to: a. depend on the behavior. b. attribute it to internal causes. c. attribute it to consensus. d. attribute it to external causes. (b; Moderate; pp. 125-126) 20. If a person responds the same way over time, attribution theory states that the behavior shows: a. distinctiveness. b. consensus. c. consistency. d. continuity. (c; Moderate; pp. 125-126) 21. The tendency to underestimate the influence of external factors and overestimate the influence of internal factors when making judgments about the behavior of others is termed: a. fundamental attribution error. b. self-serving bias. c. selective perception. d. consistency. (a; Moderate; p. 126) 22. Your boss never gives you the benefit of the doubt. When you were late this morning, he assumed that you had overslept. He never considered that there might have been a delay on the freeway. He is guilty of: a. self-serving bias. b. selective perception. c. fundamental attribution error. d. inconsistency. (c; Moderate; p. 126) 23. The tendency of an individual to attribute his own successes to internal factors while putting the blame for failures on external factors is: a. fundamental attribution error. b. self-serving bias. c. consistency. d. selective perception. (b; Moderate; p. 126)

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Jane is difficult to work with. Whenever she is successful she takes full credit for what has happened, but whenever she is unsuccessful she attributes her failure to bad luck or to one of her fellow employees. She is guilty of: a. fundamental attribution error. b. self-serving bias. c. consensus. d. distinctiveness. (b; Moderate; p. 126) 90

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When investors bragged about their investing expertise during the stock market rally between 1996 and early 2000, then blamed analysts, brokers, and the Federal Reserve when the market imploded in 2000, they were guilty of: a. fundamental attribution error. b. self-serving bias. c. consensus. d. distinctiveness. (b; Moderate; p. 126) 26. Shortcuts in judging others include all of the following except: a. stereotyping. b. halo effect. c. projection. d. self-serving bias. (d; Easy; p. 127) 27. Because it is impossible for us to assimilate everything we see, we engage in: a. selective perception. b. memorization. c. mental desensitization. d. periodic listening. (a; Easy; p. 127) 28. _____ allows us to “speed-read” others, but not without the risk of drawing an inaccurate picture. a. Selective perception b. Memorization c. Mental desensitization d. Periodic listening (a; Moderate; p. 127) 29. When we draw a general impression about an individual based on a single characteristic such as intelligence, sociability, or appearance: a. we have misjudged the person. b. personal bias is in effect. c. we are prejudiced. d. the halo effect is operating. (d; Moderate; p. 128) 30. The halo effect causes one trait to be extended into a(n): a. overall evaluation. b. stereotype. c. unsatisfied need. d. self-serving bias. (a; Moderate; p. 127) 31. One of the shortcuts used to judge others involves evaluating a person based on how he/she compares to other individuals on the same characteristic. This shortcut is known as: a. selective perception. 91

b. contrast effects. c. halo effect. d. prejudice. (b; Moderate; p. 128) 32. _____ is the tendency to attribute one’s own characteristics to other people. a. Stereotyping b. Interpretation c. Selection d. Projection (d; Easy; p. 128) 33. People who engage in _____ tend to perceive others according to what they themselves are like, rather than according to what the person being observed is really like. a. projection b. a contrast effect c. halo effect d. stereotyping (a; Challenging; p. 128) 34. Among people who engage in projection, their perception of others is influenced: a. more by what the observer is like than by what the person being observed is like. b. more by the situation than by what the person being observed is like. c. by the environment. d. more by dominant attributes of the person than by the general character of the person. (a; Moderate; p. 128) 35. When we judge someone on the basis of our perception of the group to which he/she belongs, we are using the shortcut called: a. grouping. b. stereotyping. c. categorizing. d. assimilating. (b; Easy; pp. 128-129)

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When F. Scott Fitzgerald said, “The very rich are different from you and me” and Hemingway replied, “Yes, they have more money,” Hemingway refused to engage in what shortcut to judge others? a. projection b. contrast effect c. halo effect d. stereotyping (d; Challenging; pp. 128-129) 37. Which of the following is not an example of stereotyping? a. Men aren’t interested in child care. b. Older workers can’t learn new skills. 92

c. This applicant was good at her last job, so she will be good at this one. d. Women won’t relocate for a promotion. (c; Easy; pp. 128-129) 38. When one person inaccurately perceives a second person and the resulting expectations cause the second person to behave in ways consistent with the original perception, _____ has occurred. a. stereotyping b. a self-fulfilling prophecy c. a self-serving bias d. the fundamental attribution error (b; Moderate; p. 130) 39. One organizational area where there are important consequences of judging people is: a. the employment interview b. marketing c. accounting d. operations (a; Easy; p. 129) 40. Interviewers make perceptual judgments that: a. usually agree with other interviewers. b. are often inaccurate. c. are exceptionally accurate. d. are not quickly entrenched. (b; Moderate; p. 129) 41. Which of the following is not true concerning interviewers? a. Their perceptual judgments are often inaccurate. b. Agreement among interviewers is often poor. c. Different interviewers see the same things in the same candidate. d. Interviewers generally draw early impressions that become very quickly entrenched. (c; Challenging; p. 129)

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Most interviewers’ decisions change very little after the first _____ minutes of the interview. a. 1-2 b. 4-5 c. 30-40 d. 50-60 (b; Moderate; p. 129) 43. Another name for self-fulfilling prophecy is: a. Pygmalion effect. b. projection. c. self-selecting bias. d. negative reinforcement. (a; Moderate; p. 130)

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According to _____, people’s expectations determine their behavior. a. Pygmalion effect b. projection c. self-selecting bias d. negative reinforcement (a; Moderate; p. 130) 45. Which of the following is not descriptive of performance evaluation? a. It is closely tied to an employee’s future. b. It is dependent on the perceptual process. c. It is best to use subjective measures which are less judgmental. d. Subjective measures are easier to implement by providing managers greater discretion. (c; Moderate; p. 130) 46. An assessment of an individual’s effort is a judgment susceptible to _____. a. consistent objective measures b. perceptual distortions c. few biases d. consistency across all raters (b; Challenging; p. 130) The Link Between Perception and Individual Decision Making 47. How individuals in organizations make decisions, and the quality of their final choice is largely influenced by their: a. personality. b. perceptions. c. experience. d. job satisfaction. (b; Challenging; p. 131)

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____ make decisions in organizations. a. Top managers b. Middle and lower level managers c. Non-managerial managers d. all of the above (d; Easy; p. 131) 49. A discrepancy between some desired state and the actual condition is defined as a(n): a. decision. b. criterion. c. attribution. d. problem. (d; Moderate; p. 131) How Should Decisions Be Made?

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The optimizing decision-maker is: a. rational. b. creative. c. satisfying. d. innovative. (a; Moderate; p. 131) 51. Decision making is initiated by: a. a problem. b. a solution. c. conflict. d. perceptual distortion. (a; Moderate; p. 132) 52. Rationality assumes: a. high intelligence. b. consistency. c. maturity. d. unlimited choices. (b; Moderate; p. 132) 53. Which is not one of the steps in the rational decision-making model? a. defining the problem b. identifying the decision criteria c. rating the alternatives d. computing the decisions that satisfice (d; Moderate; p. 132)

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In the following steps in decision making, which would come first? a. Generate alternatives. b. Identify criteria. c. Make a choice. d. Implement the decision. (b; Easy; p. 132) 55. The factors that an individual views as important in a decision are considered in which step in the optimizing model? a. decision criteria b. developing alternatives c. evaluation of alternatives d. problem definition (a; Moderate; p. 132) 56. Which of the following is not an assumption of the rational decision-making model? a. problem clarity b. preferences change slowly 95

c. no time or cost constraints d. maximum payoff (b; Moderate; pp. 132-133) 57. _____ is the ability to combine ideas in a unique way or to make unusual associations between ideas. a. Creativity b. Talent c. Decision making d. Lateral thinking (a; Moderate; p. 133) 58. Creativity’s most obvious value in decision making is in: a. identifying the problem. b. computing the optimal decision. c. allocating weights to the alternatives. d. helping identify all viable alternatives. (d; Moderate; p. 133) 59. Why is creativity important to decision making? a. It allows the decision-maker to more fully appraise the problem. b. It allows the decision-maker to see problems others cannot see. c. It helps the decision-maker identify all viable alternatives. d. all of the above (d; Moderate; p. 133) 60. Each of the following is part of the three-component model of creativity except: a. expertise. b. creative thinking skills. c. intuitive decision making. d. intrinsic task motivation. (c; Challenging; pp. 133-134) 61. The segment of the three-component model of creativity that is the foundation for all creative work is: a. expertise. b. creative thinking skills. c. intuitive decision making. d. intrinsic task motivation. (a; Challenging; p. 133) 62. The segment of the three-component model of creativity that encompasses personality characteristics associated with creativity is: a. expertise. b. creative thinking skills. c. intuitive decision making. d. intrinsic task motivation. (b; Challenging; pp. 133-134) 63. _____ is the motivational component in the three-component model of creativity that turns 96

creative potential into actual creative ideas. a. Expertise b. Creative thinking skills c. Intuitive decision making d. Intrinsic task motivation (d; Challenging; p. 134) How Are Decisions Actually Made In Organizations? 64. Looking for a solution that is satisfactory and sufficient is called: a. suboptimizing. b. seeking an implicit favorite. c. simplifying. d. satisficing. (d; Moderate; p. 135) 65. Decision makers operate within the confines of _____ i.e., they construct simplified models that extract the essential features from problems without capturing all their complexity. a. optimal decision making b. intuitive decision making c. bounded rationality d. synectics (c; Moderate; p. 135) 66. The satisficing decision maker is best characterized as: a. seeking a “good enough” solution. b. following bounded rationality. c. a decision confirmation process. d. a search for consistency. (a; Moderate; p. 135) 67. _____ is an unconscious process created out of distilled experience. a. Intuitive decision making b. Bounded rationality c. Optimizing decision making d. Satisficing (a; Moderate; p. 136) 68. Research on what game has provided an excellent example of how intuition works? a. soccer b. chess c. cricket d. backgammon (b; Challenging; pp. 136-137) 69. Which of the following conditions would probably not lead to intuitive decision making? a. Time is limited and there is pressure to come up with the right decision. b. Facts don’t clearly point the way to go. c. A high level of certainty exists. d. “Facts” are limited. (c; Moderate; p. 137) 97

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If a decision maker faces a conflict between selecting a problem that is important to the organization and one that is important to a decision maker: a. organizational interest is top priority. b. self-interest tends to win out. c. neither wins. d. the winner is unpredictable. (b; Challenging; p. 137) 71. Which of the following is not a bias in decision making? a. representative heuristic b. availability heuristic c. escalation of commitment d. an heuristical fallacy (d; Easy; p. 139) 72. Judgmental shortcuts in decision making are termed: a. optimalities. b. escalations. c. satisficing. d. heuristics. (d; Moderate; p. 139) 73. _____ is the tendency for people to base their judgments on readily available information. a. Representative heuristic b. Availability heuristic c. Escalation of commitment d. An heuristical fallacy (b; Challenging; p. 139) 74. The tendency to assess the likelihood of an occurrence by trying to match it with a preexisting category is: a. representative heuristic. b. availability heuristic. c. escalation of commitment. d. an heuristical fallacy. (a; Challenging; p. 139) 75. An increased commitment to a previous decision in spite of negative information is termed: a. escalation of commitment. b. optimizing decision making. c. satisficing decision making. d. reengineering. (a; Moderate; p. 139) 76. When inner-city African-American boys overestimate the likelihood of their playing in the NBA because they have heard about a boy from their neighborhood ten years ago who played professional basketball, they are suffering from a(n) _____ heuristic. a. availability b. escalation 98

c. representative d. optimizing (c; Moderate; p. 139) 77. People differ along two dimensions in their approaches to decision making. dimensions are: a. way of thinking/tolerance for ambiguity. b. consideration/structure. c. commitment/intuitive thinking. d. rationality/concern for people. (a; Moderate; p. 140) 78. These two

People with the _____ style of decision making tend to make decisions fast and focus on the short run. a. directive b. analytic c. conceptual d. behavioral (a; Moderate; p. 140) 79. People with the _____ style of decision making tend to be very broad in their outlook and consider many alternatives. a. directive b. analytic c. conceptual d. behavioral (c; Moderate; p. 140) 80. People with the _____ style of decision making are careful decision-makers with the ability to adapt to or cope with novel situations. a. directive b. analytic c. conceptual d. behavioral (b; Moderate; p. 140) 81. Which of the following is not one of the four styles of decision making? a. directive b. analytic c. satisficing d. conceptual (c; Challenging; Exh. 5-5; pp. 140-141) 82. Business students, lower level managers, and top executives tend to score highest in the _____ style of decision making. a. analytic b. directive c. conceptual d. behavioral (a; Moderate; p. 141) 99

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Which of the following is not an organizational constraint on decision making? a. performance evaluation b. reward system c. personality d. formal regulations (c; Easy; p. 142) 84. A culture’s time orientation can be expected to influence decision making. In Egypt, decisions will be made: a. quickly. b. at a moderate pace. c. slowly. d. at various rates. (c; Moderate; p. 143) 85. In the U.S., it is important that decisions appear to be made: a. slowly. b. only at senior levels. c. intuitively. d. rationally. (d; Moderate; p. 143) 86. Which of the following is not listed in your text as a criterion for making ethical choices? a. utilitarianism b. justice c. rights d. satisficing (d; Moderate; pp. 143-144) 87. Decisions made so as to provide the greatest good for the greatest number are based on: a. utilitarianism. b. justice. c. rights. d. profit. (a; Moderate; pp. 143-144) TRUE/FALSE What Is Perception and Why Is It Important? 88. Perception refers to the way we organize and interpret the world around us. (True; Easy; p. 123) 89. The reality of a situation is what is behaviorally important. (False; Moderate; p. 124) Factors Influencing Perception

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When an individual looks at a target and attempts to interpret what he or she sees, that interpretation is heavily influenced by personal characteristics of the individual perceiver. (True; Easy; p. 124) 91. Personal characteristics affecting perception include the time at which an object or event is seen. (False; Moderate; p. 124) 92. An individual’s expectations have little effect on perception. (False; Easy; p. 124) 93. Individuals can be involved in the same situation but perceive that situation very differently. (True; Easy; p. 124) 94. Expectations can distort your perceptions in that you will see what you expect to see. (True; Easy; p. 124) 95. The relationship of a target to its background influences our perception. (True; Easy; pp. 124-125) 96. Elements in the surrounding environment are ignored in our perceptions. (False; Moderate; pp. 124-125) 97. Attribution theory looks at the internal or external causes of behavior. (True; Moderate; p. 125) 98. Internally caused behaviors are those that are believed to be under the personal control of the individual. (True; Easy; p. 125) 99. Giving an attribution an external causation means you assume that the individual is responsible for his or her own behavior. (False; Moderate; p. 125) 100. In attribution theory, “distinctiveness” refers to whether an individual displays different behaviors in different situations. (True; Moderate; p. 125) 101. In attribution theory, “consensus” refers to whether an individual displays different behaviors in different situations. (False; Moderate; p. 125) 102. The more consistent the behavior, the more the observer is inclined to attribute it to internal causes. (True; Moderate; pp. 125-126) 103. The tendency for individuals to attribute their successes to internal factors while putting the blame for failures on external factors is called the fundamental attribution error. (False; Moderate; p. 126) 104. The self-serving bias explains why a sales manager is prone to attribute the poor performance of 101

her sales agents to laziness rather than to the innovative product line introduced by a competitor. (False; Challenging; p. 126) 105. The self-serving bias suggests that feedback provided to employees in performance reviews is very likely to be distorted by recipients. (True; Moderate; p. 126) 106. Projection is the idea that people selectively interpret what they see based on their interests, background, experience, and attitudes. (False; Moderate; pp. 127-128) 107. Selective perception allows us to “speed read” others. (True; Moderate; p. 127) 108. The halo effect occurs because it is impossible for us to assimilate everything we see. (False; Moderate; p. 128) 109. When managers see people as more homogeneous than they really are, managers are probably engaging in projection. (True; Moderate; p. 128) 110. When you are judging someone based upon your perception of a group to which he belongs, you are guilty of projection. (False; Easy; p. 128) 111. An individual’s place in the interview schedule may affect the interviewer’s evaluation of the applicant. This example illustrates the halo effect. (False; Moderate; p. 129) 112. Interviewers can make perceptual judgments that are often inaccurate during an employment interview. (True; Easy; p. 129) 113. Negative information exposed early in an interview tends to be more heavily weighted than if the same information were conveyed later. (True; Moderate; p. 129) 114. If you expect to see that older workers can’t learn a new job skill, you will probably perceive that, whether it is accurate or not. (True; Moderate; p. 130) 115. Another name for the self-serving bias is the Pygmalion effect. (False; Challenging; p. 130) 116. Brenda has been told that her students have been selected for her class because they are the most intelligent in their grade. She finds that they consistently perform above average work. This may be an example of a self-fulfilling prophecy. (True; Moderate; p. 130) 117. The judgment of the evaluator plays an important role in subjective criteria used to do 102

performance evaluations. (True; Moderate; p. 130) 118. A primary influence on the future of an employee in an organization is “employee effort” – which is subject to perceptual distortion. (True; Moderate; p. 130) The Link Between Perception and Individual Decision Making 119. Making decisions is not the sole province of managers. (True; Easy; p. 131) 120. Decision making occurs as a reaction to a problem. (True; Moderate; p. 131) 121. Awareness that a problem exists and that a decision needs to be made is a perceptual issue. (True; Moderate; p. 131) 122. One person’s problem is another person’s satisfactory state of affairs. (True; Easy; p. 131) 123. To optimize a certain outcome, the rational decision-making process is used. (True; Moderate; p. 131) 124. If a decision maker chooses not to identify some factor as a decision criterion in step two of the decision making process, it becomes irrelevant to the process. (True; Challenging; p. 132) 125. Rationality assumes that the options and alternatives can be ranked according to their importance. (True; Moderate; pp. 132-133) 126. The rational decision-making model assumes rationality and that the alternative that yields the lowest perceived value will be chosen. (False; Moderate; p. 133) 127. The rational decision-making model assumes the problem is clear and unambiguous. (True; Moderate; pp. 132-133) 128. Creativity’s value in helping decision makers is in helping decision makers analyze alternatives. (False; Challenging; p. 133) 129. People do not differ in their inherent creativity. (False; Moderate; p. 133) 130. Most decisions in the real world follow the rational model. (False; Moderate; p. 133) 131. The four-component model of creativity incorporates expertise, task motivation, creativity skills, and pragmatism. (False; Easy; pp. 133-134) 103

132. Expertise is the foundation for all creative work. (True; Challenging; p. 133) 133. The bounded rationality model assumes that the decision maker will simplify the problem. (True; Moderate; p. 135) 134. The bounded rationality model ignores rationality. (False; Moderate; p. 135) 135. A satisficing solution is both satisfactory and sufficient. (True; Easy; p. 135) 136. Intuitive decision making is a conscious process created out of experience. (False; Challenging; p. 136) 137. Intuitive decision analysis must operate independently of rational analysis. (False; Moderate; p. 136) 138. Rational decision making is considered more socially desirable than intuitive decision making. (True; Moderate; p. 137) 139. All rational decision makers can be expected to identify and select the same problems to solve. (False; Challenging; p. 137) 140. Availability heuristic is the tendency for people to base judgments on information that is readily available to them. (True; Moderate; p. 138) 141. Jackson continues to put money into car repair even though he knows the car is a “lemon.” This is an example of the availability heuristic. (False; Moderate; p. 138) 142. It has been well documented that individuals escalate commitment to a failing course of action when they view themselves as responsible for the failure. (True; Moderate; pp. 138-139) 143. Decision makers with the analytic style make decisions fast and focus on the short run. (False; Challenging; p. 140) 144. Directive style decision makers tend to focus on the long run. (False; Moderate; p. 140) 145. The basic foundation of the model of decision making style is that people differ along two dimensions: their way of thinking and their tolerance for errors. (False; Moderate; p. 140) 146. Utilitarianism dominates business decision making. (True; Easy; pp. 143-144)

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A focus on utilitarianism as an ethical decision criterion promotes efficiency and productivity as well as a focus on the rights of individuals. (False; Easy; pp. 143-144) 148. The justice criterion for decision making requires that individuals impose and enforce rules fairly and impartially so there is an equitable distribution of benefits and costs. (True; Moderate; p. 144) 149. Ethical standards are less ambiguous in Asia than in the United States. (False; Challenging; p. 145)

SCENARIO-BASED QUESTIONS Application of Attribution Theory You are on a team with two individuals who are difficult. The work has been divided among the three of you and each time your team meets, Janet and Jim disagree about the progress of the team project. Janet is convinced that Jim’s lack of progress is because he is inherently lazy and not because of some overwhelming problem with the project itself. The truth seems to be that Janet is not doing her part of the work. 150. You might attempt to understand Janet and Jim by using _____ theory. a. social relevance b. attribution c. optimizing d. satisficing (b; Easy; pp. 125-126) 151. Janet seems to be guilty of: a. proximity bias. b. ethnocentrism. c. the fundamental attribution error. d. self-serving bias. (c; Moderate; pp. 125-126) 152. Janet may be attributing to Jim some of her own characteristics. She might be guilty of: a. projection. b. the halo effect. c. contrast effect. d. stereotyping. (a; Moderate; pp. 125-126) Application of Shortcuts in Judging Others The students in your class are presenting their oral presentations in front of the entire class. You have heard that there are several frequently used shortcuts to judging others and are wondering if any of these 105

are being used by your teacher. 153. Jennifer has already presented two excellent reports. The report she has just presented is clearly not as good as the first two reports, yet she is given the same high grade as before. a. The contrast effect is distorting the teacher’s perception. b. The halo effect is operating. c. The teacher has stereotyped Jennifer. d. The teacher is projecting that Jennifer is an “A” student. (b; Moderate; pp. 127-129)

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Allison has just presented her paper and has done a really good job. You are afraid to go next because the _____ may operate and you will be perceived less favorably than if your presentation is on another day. a. stereotyping effect b. halo effect c. contrast effect d. projection effect (c; Moderate; pp. 127-129) 155. You have heard that the teacher believes that men perform better in oral presentations than women. This is an example of: a. halo effect. b. contrast effect. c. projection. d. stereotyping. (d; Moderate; pp. 127-129) Application of Rational Problem-Solving Sarah is responsible for purchasing a new computer system for her department. Given the significant financial investment, Sarah has decided to use the rational decision-making model. 156. The first step of _____ occurred when Sarah’s manager informed her that the old computer system was not able to accommodate the expected customer load. a. identifying decision criteria b. defining the problem c. rating each alternative on each criterion d. computing the optimal decision (a; Moderate; pp. 131-133) 157. The third step of the rational decision-making model requires Sarah to: a. identify the decision criteria. b. weight the decision criteria. c. generate possible alternatives. d. compute the optimal decision. (b; Moderate; pp. 131-133) 106

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When Sarah evaluates each alternative against the weighted criteria and selects the alternative with the highest total score, she is: a. identifying decision criteria. b. defining the problem. c. rating each alternative on each criterion. d. computing the optimal decision. (d; Moderate; pp. 131-133)

Application of Improving Creativity Susan is involved in making a very important decision for her university. The university is searching for a new president and Susan is a member of the committee. She wants to make certain that all information is considered and the best candidate is chosen. 159. Susan wants the committee to produce novel and useful ideas and has decided she should stimulate: a. consensus. b. creativity. c. diversity. d. clarity. (b; Moderate; pp. 133-134) 160. Creativity will probably be most important in: a. helping identify all viable alternatives. b. selecting the best alternative. c. allocating weights to criteria. d. evaluating the alternatives. (a; Challenging; pp. 133-134) 161. If Susan decides to use the three-component model of creativity, she will focus on _____ as the foundation of creative work. a. creative thinking skills b. intrinsic task motivation c. expertise d. external motivators (c; Challenging; pp. 133-134) Application of How Are Decisions Actually Made You are part of making a decision about the appropriateness of discontinuing research on a new drug. This new drug would save lives, but it is uncertain whether you can develop it within a reasonable time frame and at a reasonable cost. Your firm has already spent a small fortune on this drug. You have gathered so much information in preparation to making the decision that you are unable to sort the good information from the superfluous. 162. Your experience tells you that this project has merit. You decide to use _____ decision making 107

and continue the project. a. compulsive b. intuitive c. rational d. satisficing (b; Moderate; pp. 135-139)

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You decide to rely on judgmental shortcuts in order to make the decision in a timely manner. These shortcuts are termed: a. heuristics. b. optimal solutions. c. lateral approaches. d. fundamental attribution errors. (a; Moderate; pp. 135-139) 164. You decide to spend more money on the project because you believe you might be viewed as responsible if the project failed. You are guilty of: a. availability heuristic. b. representative heuristic. c. escalation of commitment. d. satisficing. (c; Moderate; pp. 135-139) Application of Ethical Decision Making You are the manager of a development group in a large computer software company. You have decided that it is important for your group to understand the many ways that ethical decisions can be made and you are designing a training program on the subject of ethics. 165. You will probably teach the _____ criterion since it is the decision criterion that currently dominates business decision making. a. utilitarian b. justice c. rights d. privilege (a; Challenging; pp. 143-144) 166. You decide to teach the group about the importance of making decisions consistent with fundamental liberties and privileges. You are planning to focus on: a. utilitarian. b. justice. c. rights. d. privilege. (c; Moderate; pp. 143-144) SHORT DISCUSSION QUESTIONS 108

167. Contrast the fundamental attribution error and the self-serving bias. (Page 126) When we make judgments about the behavior of other people, we have a tendency to underestimate the influence of external factors and overestimate the influence of internal or personal factors. This is called the fundamental attribution error. There is also a tendency for individuals to attribute their own successes to internal factors such as ability or effort while putting the blame for failure on external factors such as bad luck or unproductive coworkers. This is called the self-serving bias. 168. Discuss some of the errors in perceptual judgment made by interviewers. (Pages 129-130) Interviewers make perceptual judgments that are often inaccurate. In addition, agreement among interviewers is often poor; that is, different interviewers see different things in the same candidate and thus arrive at different conclusions about the applicant. Interviewers generally draw early impressions that become very quickly entrenched. If negative information is exposed early in the interview, it tends to be more heavily weighted than if that same information comes out later. Studies indicate that most interviewers’ decisions change very little after the first four or five minutes of the interview. As a result, information elicited early in the interview carries greater weight than does information elicited later, and a “good applicant” is probably characterized more by the absence of unfavorable characteristics than by the presence of favorable characteristics. Perceptual factors influence who is hired and eventually the quality of an organization’s labor force. 169. What is the self-fulfilling prophecy? (Page 130) The self-fulfilling prophecy is also called the pygmalion effect. It characterizes the fact that people’s expectations determine their behavior. In other words, if a manager expects big things from his people, they’re not likely to let him down. Similarly, if a manager expects people to perform minimally, they’ll tend to behave so as to meet those low expectations. The result then is that the expectations become reality. 170. What assumptions are made by the rational decision-making model? (Pages 132-133) There are six assumptions of the rational decision-making model: a. The problem is clear and unambiguous. The decision maker is assumed to have complete information regarding the decision situation. b. It is assumed the decision maker can identify all the relevant criteria and can list all the viable alternatives. Furthermore, the decision maker is aware of all the possible consequences of each alternative. c. Rationality assumes that the criteria and alternatives can be ranked and weighted to reflect their importance. d. It is assumed that the specific decision criteria are constant and that the weights assigned to them are stable over time. e. The rational decision maker can obtain full information about criteria and alternatives because it is assumed that there are no time or cost constraints. f. The rational decision maker will choose the alternative that yields the highest perceived value. 109

171. How is bounded rationality related to decision making? (Pages 135-136) Since the capacity of the human mind for formulating and solving complex problems is far too small to meet the requirements for full rationality, individuals operate within the confines of bounded rationality. They construct simplified models that extract the essential features from problems without capturing all their complexity. Individuals can then behave rationally within the limits of the simple model. Once the limited set of alternatives is identified, the decision maker will begin reviewing it. But the review will not be comprehensive. Instead, the decision maker will begin with alternatives that differ only in a relatively small degree from the choice currently in effect. Following along familiar and well-worn paths, the decision maker proceeds to review alternatives only until he or she identifies an alternative that is “good enough.” The first alternative that meets the “good enough” criterion ends the search. So the final solution represents a satisficing choice rather than an optimum one. 172. Define the term “heuristic” and explain two common categories of heuristics. (Page 139) Heuristics are judgmental shortcuts in decision making. The two common categories are availability and representativeness. The availability heuristic is the tendency for people to base their judgments on information that is readily available to them. The representative heuristic is the tendency to assess the likelihood of an occurrence by trying to match it with a preexisting category. 173. Define the term escalation of commitment. (Pages 139-140) A bias that creeps into decisions is a tendency to escalate commitment when a decision stream represents a series of decisions. Escalation of commitment refers to staying with a decision even when there is clear evidence that it is wrong. Individuals escalate commitment to a failing course of action when they view themselves as responsible for the failure. MEDIUM LENGTH DISCUSSION QUESTIONS 174. Discuss five shortcuts used in judging others. (Pages 127-129) Because it is impossible for us to assimilate everything we see, only certain stimuli can be taken in. Since we cannot observe everything going on about us, we engage in selective perception. This allows us to “speed-read” others. When we draw a general impression about an individual on the basis of a single characteristic, a halo effect is operating. The contrast effect occurs when we don’t evaluate a person in isolation. Our reaction to one person is influenced by other persons we have recently encountered. The tendency to attribute one’s own characteristics to other people is projection. This occurs when we perceive others according to what we ourselves are like rather than according to what the person being observed is really like. When we judge someone on the basis of our perception of the group to which he or she belongs, we are using the shortcut called stereotyping. 175. Outline the six steps in the rational decision-making model. 110

(Page 132) The rational decision-making model begins by defining the problem. Once a decision maker has defined the problem, he or she needs to identify the decision criteria that will be important in solving the problem. That is, the decision maker determines what is relevant in making the decision. The third step requires the decision maker to weight the previously identified criteria in order to give them the correct priority in the decision. The fourth step requires the decision maker to generate possible alternatives that could succeed in resolving the problem. Once the alternatives have been generated, the decision maker must critically analyze and evaluate each one. This is done by rating each alternative on each criterion. The final step requires computing the optimal decision. This is done by evaluating each alternative against the weighted criteria and selecting the alternative with the highest total score. 176. Discuss three different criteria for ethical decision making. (Pages 143-145) There are three different criteria in making ethical choices. The first is the utilitarian criterion, in which decisions are made solely on the basis of their outcomes or consequences. The goal of utilitarianism is to provide the greatest good for the greatest number. This is the view that tends to dominate business decision making. Another criterion is to focus on rights. This calls on individuals to make decisions consistent with fundamental liberties and privileges as set forth in documents like the Bill of Rights. An emphasis on rights in decision making means respecting and protecting the basic rights of individuals. A third criterion is to focus on justice. This requires individuals to impose and enforce rules fairly and impartially so there is an equitable distribution of benefits and costs. COMPREHENSIVE ESSAYS 177. What factors reside in the perceiver, the target being perceived, or in the context of the situation that operate to shape and sometimes distort perception? (Exh 5-1; Pages 124-125) A number of factors operate to shape and sometimes distort perception. These factors can reside in the perceiver, in the object or target being perceived, or in the context of the situation in which the perception is made. When an individual looks at a target and attempts to interpret what he or she sees, that interpretation is heavily influenced by personal characteristics of the individual perceiver. Personal characteristics affecting perception include his or her attitudes, personality, motives, interests, past experiences, and expectations. Characteristics of the target being observed can affect what is perceived. The relationship of a target to its background influences perception, as does our tendency to group close things and similar things together. The context in which we see objects or events is also important. The time at which an object or event is seen can influence attention, as can location, light, heat, or any number of other factors. 178. Discuss the three-component model of creativity. (Pages 133-134) The three-component model of creativity proposes that individual creativity essentially requires expertise, creative-thinking skills, and intrinsic task motivation. Expertise is the foundation for all creative work. The potential for creativity is enhanced when individuals have abilities, knowledge, proficiencies, and similar expertise in their field of endeavor. The second component 111

is creative-thinking skills. This encompasses personality characteristics associated with creativity, the ability to use analogies, as well as the talent to see the familiar in a different light. The final component is intrinsic task motivation. This is the desire to work on something because it is interesting, involving, exciting, satisfying, or personally challenging. This motivational component is what turns creativity potential into actual creative ideas. It determines the extent to which individuals fully engage their expertise and creative skills. 179. Discuss some of the ways in which the organization constrains decision makers. (Pages 141-143) The organization itself constrains decision makers. Managers are strongly influenced in their decision making by the criteria by which they are evaluated. The organization’s reward system influences decision makers by suggesting to them what choices are preferable in terms of personal payoff. Rules, policies, procedures, and other formalized regulations standardize behavior of organizational members. By programming decisions, organizations are able to get individuals to achieve high levels of performance without paying for the years of experience that would be necessary in the absence of regulations. Organizations impose deadlines on decisions. These conditions create time pressures on decision makers and often make it difficult, if not impossible, to gather all the information they might like to have before making a final choice. Decisions have a context. Decisions made in the past are ghosts which continually haunt current choices. Choices made today, therefore, are largely a result of choices made over the years.

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