Chapter 9--Managerial Decision Making

Student: ___________________________________________________________________________

1. Making a choice is the most significant part of the decision-making process.

True False

2. A decision is a choice made from available alternatives.

True False

3. Programmed decisions are decisions that are made for situations that have occurred often in the past
and allow decision rules to be developed to guide future decisions.

True False

4. Two employees in Stacey's department quit which is normal for her department. She is faced with the
decision to fill these positions. This would be considered a nonprogrammed decision.

True False

5. Gerald's Groceries and Marty's Market decided to merge their operations, something neither company
has tried before. This would be considered a nonprogrammed decision.

True False

6. In the real world, few decisions are certain.

True False

7. The main difference between risk and uncertainty is that with risk you know the probabilities of the
outcomes.

True False

8. Uncertainty means that a decision has clear-cut goals, and that good information is available, but the
future outcomes associated with each alternative are subject to chance.

True False

9. .A situation where the goals to be achieved or the problem to be solved is unclear, alternatives are
difficult to define, and information about outcomes is unavailable refers to ambiguity.

True False

10 The classical decision making model assumes that the decision-maker is rational, and makes the
. optimal decision each time.

True False

1
11 The approach that managers use to make decisions usually falls into one of three types – the classical
. model, the administrative model, and the political model.

True False

12 The growth of quantitative decision techniques that use computers has reduced the use of the classical
. approach.

True False

13 The administrative model of decision making describes how managers actually make decisions in
. difficult situations.

True False

14 Normative decision theory recognizes that managers have only limited time and cognitive ability and
. therefore their decisions are characterized by bounded rationality.

True False

15 The classical model of decision-making works best in organizations that are made up of groups with
. diverse interests, goals, and values.

True False

16 According to the classical model of decision making, managers’ searches for alternatives are limited
. because of human, information, and resource constraints.

True False

17 According to the administrative model of decision making, managers' searches for alternatives are
. limited because of human, information, and resource constraints.

True False

18 Satisficing behavior occurs when we choose the first solution alternative that satisfies minimal
. decision criteria regardless of whether better solutions are expected to exist.

True False

19 Intuition is a quick apprehension of a decision situation based on past experience but without
. conscious thought.

True False

20 According to both research and managerial experience, intuitive decisions are best and always work
. out.

True False

21 The process of forming alliances among managers is called coalition building.

.
True False
2
22 The political model consists of vague problems and goals, limited information about alternatives and
. their outcomes, and a satisficing choice for resolving problems using intuition.

True False

23 Good intuitive decision making is based on an ability to recognize patterns at lightning speed.
.
True False

24 Administrative and political decision making procedures and intuition have been associated with high
. performance in unstable environments in which decisions must be made rapidly and under more
difficult conditions.

True False

25 Managers confront a decision requirement in the form of either a problem or an opportunity.

.
True False

26 Nonprogrammed decisions require six steps, however, programmed decisions being structured and
. well understood require only one step.

True False

27 Step one in the managerial decision-making process is recognition of decision requirement.

.
True False

For a non-programmed decision, feasible alternatives are hard to identify and in fact are already
available within the organization's rules and procedures.

True False

The best alternative is the one in which the solution best fits the overall goals and values of the
organization and achieves the desired results using the fewest resources.

True False

The formulation stage involves the use of managerial, administrative, and persuasive abilities to ensure
that the chosen alternative is carried out.

True False

Risk propensity refers to the willingness to undertake risk with the opportunity of gaining an increased
payoff.

True False

In the implementation stage, decision makers gather information that tells them how well the decision
was implemented and whether it was effective in achieving its goals.

True False

3
Feedback is the part of monitoring that assesses whether a new decision needs to made.

True False

People who prefer simple, clear-cut solutions to problems use the directive style.

True False

Managers with an analytical decision style like to consider complex solutions based on as much data as
they can gather.

True False

The behavioral style is often adopted by managers who like to consider complex solutions based on as
much data as they can gather.

True False

Individuals with a conceptual decision-making style are more socially oriented than those with an
analytical style.

True False

The most effective managers are consistent in using their own decision style rather than shifting among
styles.

True False

Most bad decisions are errors in judgment that originate in the human mind's limited capacity and in
the natural biases of the manager.

True False

Justifying past decisions is a common bias of managers.

True False

Managers will frequently look for new information that contradicts thier instincts or original point of
view..

True False

Most people underestimate their ability to predict uncertain outcomes.

True False

Brainstorming uses a face-to-face interactive group to spontaneously suggest a wide range of

alternatives for decision making.

True False

4
Brainwriting refers to the tendency of people in groups to suppress contrary opinions.

True False

Groupthink refers to the tendency of people in groups to suppress contrary opinions.

True False

Devil's advocate technique is similar to brainstorming in that both techniques prevent individuals from
challenging other group member's assumptions.

True False

Point-counterpoint is a decision-making technique in which people are assigned to express competing

points of view.

True False

Managers are often referred to as:

A. decision
makers.
B peace makers.
.
C conflict
. creators.
Dan unnecessary
layer of
employees.
E profit
. suppressor.

_____ is a vital part of good management because

decisions determine how the organization solves its
problems, allocates resources, and accomplishes its
goals.

A. Orga
nizin
g
B Competiti
ve
visioning
C Proper
. alignment

DGood
decision
making
E Leadersh
. ip

5
Which of the following is a choice made from
available alternatives?

A. De
cisi
on
B. Plan
C. Goal
D Tacti
. c
E Strate
. gy

Mark, a production manager at Kaylie's Kookware,

recently chose to schedule his workers to work
overtime. His alternative was to hire more workers.
He is now monitoring the consequences of his
choice. This is an example of _____.

A. pla
nni
ng
B decisi
on-
makin
g
C organ
. izing

D contr
. olling

E leadi
. ng

6
_____ refers to the process of identifying problems
and then resolving them.

A. Or
gan
izin
g
B Contro
. lling

C Decisio
n-
making
D Planni
. ng
E Leadi
. ng

_____ decisions are associated with decision rules.

A. N
on
pr
og
ra
m
m
ed
B Uni
. que
C Progr
amm
ed
D Ill-
struct
ured
E Nov
. el

7
Programmed decisions are made in response to
_____ organizational problems.

A. un
us
ual
B recur
. ring

C signif
. icant

D min
. or
E uniq
. ue

Bierderlack has a policy that states that more than

three absences in a six-month period shall result in a
suspension. Colleen, the manager, has just decided
to suspend one of her shift employees for violating
this policy. This is an example of:

A. a
progra
mmed
decisio
n.
Ba
. nonprogramme
d decision.
C an insignificant
. decision.

D poor
. management.
E personal
. grudge.

8
Nordstrom Department store's "No questions asked -
Return's Policy" is an example of a(n):

A. programm
ed
decision.
B nonprogrammed
. decision.
C. novel decision.
D poor management.
.
E unstructured
. decision.

If your instructor has an attendance policy, she/he is

using a(n):

A. progra
mmed
decisi
on.
B unique
. approach.
C condition of
. ambiguity.

D nonprogram
med
decision.
E none of
. these.

Nonprogrammed decisions are made in response to

situations that are:

A. unique.
B. unstructured.
C. important to the organization.
D. all of these
E unique and important to the
. organization.

9
Examples of nonprogrammed decisions would
include the decision to:

A. reorde
r
suppli
es.
Bdevelop a
new product
or service.
perform
routine
maintenance
on one of the
machines in
manufacturing
.
terminate an
employee for
violation of
company
rules.
E fill a
. position.

Good examples of _____ decisions are strategic

decisions.

A. non
prog
ram
med
B program
. med
C insignifi
. cant
D recurri
. ng
E structur
. ed

10
When a small community hospital decides to add a
radiation therapy unit, it is considered a:

A. program
med
decision
.
B structured
. decision.
C nonprogrammed
. decision.

D poor
. management
decision.
E certainty
. decision.

Two area banks, Bank A and Bank B, decided to

merge their operations. This is an example of a:

A. programme
d decision.
B nonprogrammed
. decision.
C. decision rule.
D structured decision.
.
E bad community
. decision.

At the start of every shift, Carl, a delivery truck

driver, plans out his route based on the addresses
that he will be visiting to drop off packages. This
can best be described as what kind of decision?

A. Pro
gra
mm
ed
B Nonpro
gramm
ed
C Wick
. ed
D Admini
. strative

E Intuiti
. ve

11
Associated with the condition of _____ is the lowest
possibility of failure.

A. ambi
guity
B uncertai
. nty
C certaint
. y
D. risk
E all of
. these

Which of the following means that all the

information the decision-maker needs is fully
available?

A. Certai
nty
B. Risk
C Uncertaint
. y
D Ambiguity
.
E None of
. these

Bobby, a product manager, wants to increase the

market share of his product. He is unsure about how
to go about it, not knowing for sure how costs, price,
the competition, and the quality of his product will
interact to influence market share. Bobby is
operating under a condition of _____.

A. risk
B ambiguity
.
C. certainty
D uncertainty
.
E brainstormi
. ng

12
Under conditions of _____, statistical analyses are
useful.

A. cer
tai
nty
B ambig
. uity

C. risk
D uncert
. ainty

E confli
. ct

Which of the following means that a decision has

clear-cut goals and that good information is
available, but the future outcomes associated with
each alternative are subject to chance?

A. Certai
nty
B. Risk
C Uncertainty
.
D Ambiguity
.
E Brainstormi
. ng

_____ means that managers know which goals they

wish to achieve, but information about alternatives
and future events is incomplete.

A. Cert
aint
y
B. Risk
C Uncerta
. inty
D Ambigu
. ity
E Advoca
. cy

13
When managers know which goals they wish to
achieve, but information about alternatives and
future events is incomplete, the condition of _____
exists.

A. risk
B uncertain
. ty
C ambiguit
. y
D certainty
.
E problemat
. ic

Which of the following has the highest possibility of

failure?

A. The
cond
ition
of
certa
inty
BThe
condition
of
ambiguity
CThe
condition
of
uncertainty
D The
condition
of risk
E All of
. these

14
The four positions on the possibility of failure scale
include certainty, risk, ambiguity, and _____.

A. unce
rtain
ty
B conflict
.
C necessit
. y
D indecisi
. on
E possibili
. ty

_____ is by far the most difficult situation for a

decision-maker.

A. Certai
nty
B. Risk
C Uncertainty
.
D Ambiguity
.
E Brainstormi
. ng

Which of the following means that the goals to be

achieved or the problem to be solved is unclear,
alternatives are difficult to define, and information
about outcomes is unavailable?

A. Certai
nty
B. Risk
C Uncertainty
.
D Ambiguity
.
E Brainstormi
. ng

15
The condition under which ambiguity occurs is
when:

A. alternatives
are difficult
to define.
B objectives are well
. defined.
C information about
outcomes is readily
available.
D all the alternatives are
. known.
E decisions are already
. made.

_____ decisions are associated with conflicts over

goals and decision alternatives, rapidly changing
circumstances, fuzzy information, and unclear links
among decision elements.

A. Non
pro
gra
mm
ed
B Progra
. mmed

C Wicke
. d
D Conven
. tional

E Irration
. al

16
During the fallout of the global financial crisis of the
late 2000s, finance companies had to make
important decisions in a highly ambiguous
environment. The decision to buyout failed banks
could best be described as what type of decision?

A. Bounde
d
B. Programmed
C Conventional
.
D Wicked decision
. problem

E Irrational
. decision

The classical model of decision making is based on

_____ assumptions.

A. philos
ophic
al
B. irrational
C economic
.
D uncertaint
. y
E technologic
. al

Riley is a manager at the Tinker Tools. She is

expected to make decisions that are in the
organization's best economic interests. Her decisions
should be based on which of the following models?

A. The administrative
model of decision
making
B The garbage can model of decision
. making
C The scientific management model of
. decision making

D The classical model of decision making

.
E The humanistic model of decision
. making

17
Which of these assumptions are included in the
classical model of decision making?

A. Problems are
unstructured
and ill defined.
B The decision-maker strives for
. conditions of certainty.

C Criteria for evaluating

. alternatives are unknown.

DThe decision-maker selects the

alternatives that will minimize
the economic return to the
organization.
E The situation is always
. uncertain.

Which approach defines how a decision-maker

should make decisions?

A. Nor
mati
ve
B Scientifi
. c
C Descripti
. ve
D Reflectiv
. e
E Humanist
. ic

_____ is the approach that defines how a decision

maker should make decisions and provides
guidelines for reaching an ideal outcome for the
organization.

A. Admi
nistrat
ive
B Descriptiv
. e
C Normative
.
D Bounded
. rationality

E None of
. these
18
All of the following are characteristics of the
classical decision making model except:

A. clear-cut problems and goals.

B. conditions of certainty.
C rational choice by individual for maximizing outcomes.
.
D limited information about alternatives and their outcomes.
.
E all of these are characteristics of classical decision making
. model.

The _____ model of decision making is most

valuable when applied to _____.

A. administrative;
programmed
decisions
B classical; nonprogrammed
. decisions
C classical; programmed decisions
.
D classical; ambiguous decisions
.
E administrative; structured
. decisions

_____ approach describes how managers actually

make decisions, where as _____ approach defines
how a decision-maker should make decisions.

A. Normative;
descriptive
B Normative; classical
.
C Descriptive; normative
.
D Descriptive;
. administrative
E Normative;
. administrative

19
Which model of decision making is associated with
satisficing, bounded rationality, and uncertainty?

A. Cla
ssic
al
Admin
istrativ
e
C Quanti
. tative

D Ratio
. nal
E Politi
. cal

The growth of quantitative decision techniques that

use computers has expanded the use of which
decision-making approach?

A. Admi
nistra
tive
B Classical
.
C. Intuitive
D. Political
E Bureaucrat
. ic

The _____ model of decision making describes how

managers actually makes decisions in situations
characterized by nonprogrammed decisions,
uncertainty, and ambiguity.

A. nor
mat
ive
B classic
. al
C adminis
. trative

Dscientifi
c
manage
ment
E objecti
. ve

20
The concept that people have the time and cognitive
ability to process only a limited amount of
information on which to base decisions is known as:

A. satisficin
g.
B bounded
. rationality.
C classical model of
decision making.
D normative
. approach.
E scientific
. approach.

Melissa is a manager at InStylez Clothing. Her job is

very complex and she feels that she does not have
enough time to identify and/or process all the
information she needs to make decisions. Melissa's
situation is most consistent with which of the
following concepts?

A. Bounded
rationality
B The classical model
of decision making
C. Satisficing
D. Brainstorming
E Scientific
. management

The essence of _____ is to choose the first solution

available.

A. bounded
rationality
B. creativity
C. decision maximization
D. satisficing
E the classical model of decision
. making

21
Rodney doesn’t always realize that within his role as
an air traffic controller, he must continuously
perceive and process information based on
knowledge and experience that he is not consciously
aware of. This describes what type of decision-
making?

A. Ad
min
istr
ativ
e
B Right-
. brained

C Satisfi
. cing
D Ratio
. nal
E Intuiti
. ve

Intuition is based on _____, but lacking in _____.

A. conscious
thought;
practicalit
y
B experience;
. applicability
C a solid analysis;
. applicability

D experience;
. conscious thought

E thought-process;
. guts

22
Most managers settle for a _____ rather than a
_____ solution.

A. minimizi
ng;
maximizi
ng
B satisficing;
. maximizing
C top-level;
. bottomline
D maximizing;
. satisficing
E challenging;
. simple

All of the following are characteristics of the

administrative decision making model except:

A. vague problem and goals.

B. conditions of certainty.
C limited information about alternatives and their outcomes.
.
D. satisfying choice.
E all of these are characteristics of administrative decision maki
. model.

Which of the following is the process of forming

alliances among managers during the decision
making process?

A. Networ
king
B. Socializing
C Coalition
. building
D. Satisficing
E Passing the
. buck

23
The _____ model of decision-making is useful for
making nonprogrammed decisions when conditions
are uncertain, information is limited, and there are
managerial conflicts about what goals to pursue or
what course of action to take.

A. classic
al
B functional
.
C bureaucrati
. c
D. political
E administrati
. ve

The _____ model closely resembles the real

environment in which most managers and decision-
makers operate.

A. nor
mat
ive
B admini
. strative

C descri
. ptive

D classi
. cal
E politic
. al

Jefferson Inc. is an information technology

consulting firm located in Washington D.C.
Decisions at Jefferson are complex and involve
many people, with a significant amount of
disagreement and conflict. Which decision-making
model fits best for this organization?

A. Politi
cal
B Functiona
. l
C Classical
.
D Administra
. tive
E Bureaucrat
. ic
24
All of these are basic assumptions of the political
model except:

A. organizations are made up

of groups with diverse
interests, goals, and values.
B. information is clear and complete.
C managers do not have the time, resources, or mental
capacity to identify all dimensions of the problem.
D managers engage in the push and pull of debate to
. decide goals and discuss alternatives.

E all of these are basic assumptions of the political

. model.

Shirley works in the human resource department at

Turtle Shells, Inc. She believes she is seeing an
increase in drinking problems among the workforce.
She thinks she needs to investigate further. She is at
what stage of the managerial decision making
process?

A. Diagnosis and
analysis of
causes
B Development of alternatives
.
C Recognition of decision
. requirement
D Evaluation and feedback
.
E Selection of desired
. alternatives

A(n) _____ occurs when the organizational

accomplishment is less than established goals.

A. stre
ngt
h
B threa
. t
C diagn
. osis
D opport
. unity

E proble
. m

25
_____ is the step in the decision-making process in
which managers analyze underlying causal factors
associated with the decision situation.

A. Analy
sis
B Diagnosis
.
C Recognitio
. n
D Judgment
.
E Identificati
. on

Which of the following is the first step in the

managerial decision making process?

A. Evaluation and
feedback
B Development of alternatives
.
C Recognition of decision
. requirement
D Diagnosis and analysis of
. causes
E Selection of desired
. alternatives

_____ is the last step in the decision making

process.

A. Evaluation and
feedback
B Development of alternatives
.
C Implementation of chosen
. alternative
D Selection of desired requirement
.
E Recognition of decision
. requirement

26
The recognition of the decision requirement step in
the managerial decision making process requires
managers to:

A. develop
alternative
solutions.
B integrate information in
. novel ways.
C use the classical model of
. decision making.

D focus on generating ideas.

.
E select undesirable
. alternatives.

"When did it occur" and "how did it occur" are

questions associated with which step of the decision
making process?

A. Diagn
osis
and
analys
is of
causes
BRecognition
of decision
requirement
C Development
of
alternatives
DSelection of
desired
alternative
E None of
. these

27
When managers ask questions such as “What is the
state of disequilibrium affecting us?”, they are in
which stage of the managerial decision-making
process?

A. Selection of
a desired
alternative
B Development of
. alternatives
C Diagnosis and analysis
. of causes

D Recognition of
. decision requirement

E Evaluation and
. feedback

When quality control measures at the local tire plant

were found to be inadequate, managers were asking
themselves, “How did this occur?” and “What is the
result?” The company is in which stage of the
managerial decision-making process?

A. Selection of
a desired
alternative
B Development of
. alternatives
C Diagnosis and analysis
. of causes

D Recognition of
. decision requirement

E Evaluation and
. feedback

28
The decision-maker must _____ once the problem
has been recognized and analyzed.

A. evaluate
and
provide
feedback
B choose among
. alternatives
C generate
. alternatives
D prioritize the
. alternatives
E reanalyze the
. problem

For a programmed decision:

A. alternatives
are usually
difficult to
identify.
B alternatives are usually
. easy to identify.

C there are usually few

. alternatives.

Dthere are usually few

alternatives and they are
difficult to identify.
E there are no
. alternatives.

29
Ryan is a manager at Dream Catchers. Dream
Catchers is currently operating in an environment of
high uncertainty. As a result, Ryan will:

A. most likely be
making
programmed
decisions.
B probably have an easy time generating
. alternatives.

C probably have a difficult time

. generating alternatives.

D most likely rely on the classical model

. of decision making.

E wait until environment becomes

. certain.

Once the desired alternative is developed, it should

be _____.

A. anal
yze
d
B evaluat
. ed
C selecte
. d
D recogni
. zed
E identifi
. ed

Which of the following refers to the willingness to

undertake risk with the opportunity to increase one's
return?

A. Tunnel vision
B. Risk propensity
C. Risk averse
D. Thrill seeking
E Ineffective investment
. philosophy

30
The _____ step in the decision making process
involves using managerial, administrative, and
persuasive abilities to translate the chosen
alternative into action.

A. rec
ogn
itio
n
B analys
. is
C evaluat
. ion
D implem
. entation

E feedba
. ck

31
Feedback is important because:

A. decis
ion
maki
ng is
a
conti
nuou
s
proc
ess.
it provides
decision-
makers
with new
information
.
it helps
determine if
a new
decision
needs to be
made.
it provides
decision-
makers with
new
information
and it helps
determine if
a new
decision
needs to be
made.
E all of
. these.

32
Genna is collecting data on how well the
organization has done since their new strategy was
implemented. She is in what stage of the managerial
decision making process?

A. The generation
of alternatives
B Implementation of the chosen
. alternative

C Evaluation and feedback

.
D Recognition of the decision
. requirement

E Selection of desired
. alternative

Which style is used by people who prefer simple,

clear-cut solutions to problems?

A. Beh
avi
oral
B Concep
. tual
C Directi
. ve
D Analyt
. ical
E Classic
. al

Personal _____ style refers to differences among

people with respect to how they perceives problems
and make decisions.

A. ris
k
tak
ing
B behav
. ior
C decisi
. on
D strate
. gic
E analy
. sis

33
Research has identified four major decision styles.
These include all of the following except _____.

A. beh
avi
oral
B concep
. tual
C analyti
. cal
D authori
. tative

E directi
. ve

Managers are considered to have a(n) _____ style

when they prefer to consider complex solutions
based on as much data as they can gather.

A. beh
avi
oral
B concep
. tual
C directi
. ve
D analyti
. cal
E classic
. al

Which of these styles is adopted by managers who

have a deep concern for others as individuals?

A. Beha
viora
l
B Classica
. l
C Analytic
.
D Logical
.
E Conceptu
. al

34
People with a(n) _____ style usually are concerned
with the personal development of others and may
make decisions that help others achieve their goals.

A. class
ical
B analytic
.
C. logical
D behavior
. al
E concept
. ual

Finance managers at Big Bend Inc. made a financial

blunder when they solely looked at the previous
year’s sales to estimate sales for the coming year. Of
which management bias is this an example?

A. Being influenced
by emotions
B. Perpetuating the status quo
C. Seeing what you want to see
D. Justifying past actions
E Being influenced by initial
. impressions

All of the following are cognitive biases that can

affect manager's judgment except:

A. being
influen
ced by
initial
impres
sions.
B justifying past
. decisions.

Cseeing what
you don't want
to see.
D perpetuating
the status quo.
E overconfiden
. ce.

35
When managers base decisions on what has worked
in the past and fail to explore new options, they are:

A. perpetuating
the status
quo.
B being influenced by
. emotions.
C. being overconfident.
D justifying past actions.
.
E seeing what they want to
. see.

The ability to make _____ decisions is a critical skill

in today's fast-moving organizations.

A. fast
B widely
. supported

C high-
. quality
D frequen
. t
E all of
. these

As a top manager, Joanna works with others within

her team every day in making important corporate
decisions. Her preferred decision-making approach
is to generate as many alternatives to problems as
possible in a short amount of time. This approach is
referred to as _____.

A. groupt
hink
B devil’s
. advocacy
C point-
. counterpoint

D escalating
. commitment

E brainstormi
. ng

36
Which of the following defines a technique that uses
a face-to-face group to spontaneously suggest a
broad range of alternatives for decision making?

A. Brainst
orming
B. Groupthink
C Point-
. counterpoint
D Brainwriting
.
E Devil's
. advocate

The _____ is the individual who is assigned the role

of challenging assumptions made by the group.

A. group
gadfly
B multiple
. advocate
C devil's
. advocate
D brainstormer
.
E inferior
. member

Which of the following is a decision-making

technique in which people are assigned to express
competing points of view?

A. Point
-
count
erpoi
nt
B Devil's
. advocate

C. Debate
D Groupthin
. k
E Brainwriti
. ng

37
_____ refers to the tendency of people in groups to
suppress contrary opinions.

A. Point-
counte
rpoint
B Groupthink
.
C Devil’s
. advocacy
D Escalating
. commitment

E Brainstormi
. ng

The tendency of organizations to invest time and

money in a solution despite strong evidence that is
not appropriate is referred to as:

A. technologi
cal
decisions.
B collective intuition.
.
C decision learning.
.
D. team delay.
E escalating
. commitment.

38
Scenario - Vaughn Bately

Vaughn Bately manages a group of eight electrical

engineers at Defiance Designs. His team is highly
trained and well respected by experts both inside
and outside the company. Recently one of Vaughn's
engineers suggested a new technique for the
development and use of an argon laser. There
appeared to be rich potential for this technology, but
Vaughn wasn't certain that developing this
technology was the best use of his limited resources.
Vaughn was facing a significant decision.

If Vaughn uses the classical model of decision

making, which of these assumptions would he
reject?
a. The decision ma
and evaluating a
b. The desired decision will maximize attainment of organizational objectives.
c. The decision-maker strives for complete certainty, gathering complete informat
d. Problems are precisely formulated and defined.
e. All of these are accepted.

39
Scenario - Vaughn Bately

Vaughn Bately manages a group of eight electrical

engineers at Defiance Designs. His team is highly
trained and well respected by experts both inside
and outside the company. Recently one of Vaughn's
engineers suggested a new technique for the
development and use of an argon laser. There
appeared to be rich potential for this technology, but
Vaughn wasn't certain that developing this
technology was the best use of his limited resources.
Vaughn was facing a significant decision.

If Vaughn uses the administrative model of decision

making, which of these assumptions would he
reject?
a. Decision-maker
solution.
b. The search for alternatives is limited because of information, human and resour
c. Rational procedures will normally lead to the best solution in a complex organi
d. Decision objectives are often vague, conflicting, and lack consensus among ma
e. All of these are accepted.

40
 Scenario - Vaughn Bately

Vaughn Bately manages a group of eight electrical

engineers at Defiance Designs. His team is highly
trained and well respected by experts both inside
and outside the company. Recently one of Vaughn's
engineers suggested a new technique for the
development and use of an argon laser. There
appeared to be rich potential for this technology, but
Vaughn wasn't certain that developing this
technology was the best use of his limited resources.
Vaughn was facing a significant decision.

Which of the following steps would Vaughn not

take in making his decision?
a. Sense and recog
b. Implement the chosen alternative.
c. Create a set of alternatives
d. Diagnose and analyze problem causes.
e. All of these would be included.

A(n) _____ is a choice made from available alternatives.

________________________________________

_____ is the process of identifying problems and opportunities and then resolving them.

________________________________________

_____ decisions involve situations that have occurred often enough to enable decision rules to be
developed and applied in the future.

________________________________________

_____ decisions are made in response to situations that are unique, are poorly defined and largely
unstructured, and have important consequences for the organization.

________________________________________

_____ means that all the information the decision-maker needs is fully available.

________________________________________

41
_____ means that a decision has clear-cut goals and that good information is available, but the future
outcomes associated with each alternative are subject to chance.

________________________________________

Under conditions of _____, managers know what goal they wish to achieve, but information about
alternatives and future events is incomplete.

________________________________________

_____ means that the goals to be achieved or the problem to be solved is unclear, alternatives are
difficult to define, and information about outcomes is unavailable.

________________________________________

The _____ model of decision making is based on economic assumptions.

________________________________________

A normative decision making model defines how a manager _____ make decisions.

________________________________________

In many respects, the _____ model represents an "ideal" model decision-making and can't usually be
attained by real people in real organizations.

________________________________________

The _____ model of decision making describes how managers actually make decisions in difficult
situations, such as those characterized by nonprogrammed decision, uncertainty, and ambiguity.

________________________________________

A(n) _____ approach describes how managers actually make decisions, not how they should.

________________________________________

The recognition that people have limits on how rational they can be is known as _____.

________________________________________

______ means that decision-makers choose the first solution alternative that satisfies minimal decision
criteria.

________________________________________

_____ represents a quick apprehension of a decision situation based on past experience but without
conscious thought.

________________________________________

42
_____ is the process of forming alliances among managers.

________________________________________

A(n) _____ occurs when organizational accomplishment is less than established goals.

________________________________________

_____ exists when managers see potential of enhancing performance beyond current levels.

________________________________________

The step in the decision making process in which managers analyze the underlying causal factors
associated with the situation is called _____.

________________________________________

_____ is the willingness to undertake risk with the opportunity of gaining an increased payoff.

________________________________________

The _____ stage involves the use of managerial, administrative, and persuasive abilities to ensure that
the chosen alternative is carried out.

________________________________________

_____ is important because decision making is a continuous, never ending process.

________________________________________

Differences among people with respect to how they perceive problems and make decisions is called
_____.

________________________________________

The _____ style is often the style adopted by managers having a deep concern for others as
individuals.

________________________________________

People with a(n) _____ style usually are concerned with the personal development of others and may
make decisions that help others achieve their goals.

________________________________________

A(n) _____ is assigned the role of challenging the assumptions and assertions made by the group.

________________________________________

43
List four of the eight questions Kepner and Tregoe recommend that managers ask when diagnosing and
analyzing causes.

List the three guidelines of innovative group decision-making in today's businesses.

Explain the difference between programmed and nonprogrammed decisions and give an example of
each.

Compare decision conditions of certainty, risk, uncertainty, and ambiguity.

44
Briefly describe the assumptions underlying the classical model of decision making.

Explain the four underlying assumptions of the administrative model.

List and describe the four basic assumptions of the political model.

What are the six steps in the managerial decision making process?

Explain how a manager selects the desired decision in the managerial decision making process.

45
Briefly describe the four major personal decision styles.

46
 Chapter 9--Managerial Decision Making Key
1. FALSE

2. TRUE

3. TRUE

4. FALSE

5. TRUE

6. TRUE

7. TRUE

8. FALSE

9. TRUE

10. TRUE

11. TRUE

12. FALSE

13. TRUE

14. FALSE

15. FALSE

16. FALSE

17. TRUE

18. TRUE

19. TRUE

20. FALSE

21. TRUE

22. FALSE

23. TRUE

24. TRUE

25. TRUE

26. FALSE

27. TRUE

FALSE

TRUE

FALSE

47
TRUE

FALSE

TRUE

TRUE

TRUE

FALSE

TRUE

FALSE

TRUE

TRUE

FALSE

FALSE

TRUE

FALSE

TRUE

FALSE

TRUE

48
A

49
A

50
E

decision

Decision making

Programmed

Nonprogrammed

Certainty

Risk

uncertainty

Ambiguity

classical

should

classical

administrative

descriptive

bounded rationality

Satisficing

Intuition

Coalition building

problem

Opportunity

diagnosis

Risk propensity

implementation

Feedback

decision style

behavioral

behavioral

devil's advocate

Students can answer with any four of the following questions: (1) What is the state of disequilibrium affecting us? (2) When did it occur? (3) Where
did it occur? (4) How did it occur? (5) To whom did it occur? (6) What is the urgency of the problem? (7) What is the interconnectedness of events?
(8) What result came from which activity?

Start with brainstorming, Know when to bail, Avoid groupthink, Engage in rigorous debate

51
 Programmed decisions involve situations that have occurred enough to enable decision rules to be developed and applied in the future. Examples
include job skills required to fill certain positions, the reorder point for manufacturing inventory, and selection of freight routes for product deliveries.

Nonprogrammed decisions are made in response to situations that are unique, are poorly defined and largely unstructured, and have important
consequences for the organization. Examples are decisions to build a new factory, develop a new product or service, and enter a new geographical
market.

Decisions made under the condition of certainty have a high possibility of success. All of the information that the decision-maker needs is available.
The decision-maker knows the alternatives, the objectives, and the outcomes. Risk is a situation where the decision-maker knows the alternatives and
the objectives. However, the outcomes are not known with certainty, but the probabilities of the outcomes are known. Under conditions of
uncertainty, the decision-maker does not know the probabilities of the outcomes, while she knows some of the alternatives and the objectives. With
ambiguity, the objectives are unclear, alternatives are difficult to define, and information about outcomes is incomplete or unavailable.

The classical model of decision making is based on four assumptions. First, the decision-maker attempts to accomplish goals that are known and
agreed upon. In addition, problems are specified and defined precisely. Second, the decision-maker attempts to gather complete information, going
for a condition of certainty. Third, the criteria for evaluating the alternatives are known and the decision-maker will select the alternative that
maximizes the economic return to the organization. Fourth, the decision-maker is rational and relies upon logic to make sense of the information
available.

(1) The decision maker operates to accomplish goals that are vague and conflicting. (2) All alternatives and the potential results are based on
simplistic views of organizational events. (3) Alternatives are limited based on human constraints. (4) Managers settle for satisficing.

(1) Organizations are made up of groups with diverse interests, goals, and values. Managers disagree about problem priorities and may not
understand or share the goals and interests of other managers. (2) Information is ambiguous and incomplete. The attempt to be rational is limited by
the complexity of many problems as well as personal and organizational constraints. (3) Managers do not have the time, resources, or mental capacity
to identify all dimensions of the problem and process all relevant information. Managers talk to each other and exchange viewpoints to gather
information and reduce ambiguity. (4) Managers engage in the push and pull of debate to decide goals and discuss alternatives. Decisions are the
result of bargaining and discussion among coalition members.

The six steps are (1) recognize the decision requirement; (2) diagnose and analyze the causes; (3) develop alternatives; (4) select the desired
alternative; (5) implement the chosen alternative; and (6) evaluate and determine feedback.

The manager tries to select the choice with the least amount of risk and uncertainty. Because some risk is inherent for most nonprogrammed
decisions, managers try to gauge prospects for success. Under conditions of uncertainty, they might have to rely on their intuition and experience to
estimate whether a given course of action is likely to succeed. Basing choices on overall goals and values can also effectively guide selection of
alternatives. Decision about how to cope should be selected by relying on the company's values and goals of treatment of employees and building
long-term relationships. Making choices depends on managers' personality factors and willingness to accept risk and uncertainty.

Directive, analytical, conceptual, and behavioral style.

52