Chapter 9

Question 1

decision

Answer 1

The choice made from two or more alternatives.

Question 2

problem

Answer 2

A discrepancy between some current state of affairs and some desired state.

Question 3

opportunity

Answer 3

An occasion that gives rise to thoughts about new ways of proceeding.

Question 4

rational

Answer 4

Refers to choices that are consistent and value-maximizing within specified constraints.

Question 5

rational decision-making model

Answer 5

A six-step decision-making model that describes how individuals should behave in order to maximize some outcome.

Question 6

bounded rationality

Answer 6

Limitations on a person’s ability to interpret, process, and act on information.

Question 7

satisfice

Answer 7

To provide a solution that is both satisfactory and sufficient.

Question 8

intuitive decision making

Answer 8

A nonconscious decision-making process created out of a person’s many experiences.

Question 9

overconfidence bias

Answer 9

Error in judgement that arises from being far too optimistic about own’s own performance.

Question 10

anchoring bias

Answer 10

A tendency to fixate on initial information and fail to adequately adjust for subsequent information.

Question 11

confirmation bias

Answer 11

The tendency to seek out information that reaffirms past choices and to discount information that contradicts past judgments.

Question 12

availability bias

Answer 12

The tendency for people to base their judgements on information that is readily available to them rather than on complete data.

Question 13

escalation of commitment

Answer 13

An increased commitment to a previous decision despite clear evidence suggesting that decision may have been incorrect.

Question 14

randomness error

Answer 14

The tendency of individuals to believe that they can predict the outcome of random events.

Question 15

risk aversion

Answer 15

The tendency to prefer a sure gain of a moderate amount over a riskier outcome, event if the riskier outcome might have a higher expected payoff.

Question 16

hindsight bias

Answer 16

The tendency to believe falsely, after the outcome of an event is actually known, that one could have accurately predicted that outcome.

Question 17

groupthink

Answer 17

A phenomenon in which group pressures for conformity prevent the group from critically appraising unusual, minority, or unpopular views.

Question 18

groupshift

Answer 18

A phenomenon in which the initial positions of individual group members become exaggerated because of the interactions of the group.

Question 19

interacting groups

Answer 19

Typical groups, in which members interact with each other face to face.

Question 20

brainstorming

Answer 20

An idea-generation process that specifically encourages any and all alternatives while withholding any criticism of those alternatives.

Question 21

nominal group technique

Answer 21

A group decision-making method in which individual members meet face to face to pool their judgments in a systematic but independent fashion.

Question 22

electronic meeting

Answer 22

A meeting in which members interact on computers, allowing for anonymity of comments and aggregation of votes.

Question 23

creativity

Answer 23

The ability to produce novel and useful ideas.

Question 24

three-component model of creativity

Answer 24

The proposition that individual creativity requires expertise, creative-thinking skills, and intrinsic task motivation.

Question 25

ethics

Answer 25

the study of moral values or principles that guide our behaviour and inform us whether actions are right or wrong.

Question 26

utilitarianism

Answer 26

A decision focused on outcomes or consequences that emphasizes the greatest good for the greatest number.

Question 27

whistle-blowers

Answer 27

Individuals who report unethical practices by their employers to outsiders.

Question 28

stages of moral development

Answer 28

The developmental stages that explain a person’s capacity to judge what is morally right.

Question 29

corporate social responsibility

Answer 29

An organization’s responsibility to consider the impact of its decisions on society.