Chapter 7

Question 1

A choice made from among available alternatives.

Answer 1

Decision

Question 2

The process of identifying and choosing alternative courses of action.

Answer 2

Decision Making

Question 3

Two Systems of Decision Making:

Answer 3

(1) System 1- Intuitive and Largely Unconscious

(2) System 2 - Analytical and Conscious

Question 4

Operates automatically and quickly

Answer 4

System 1- Intuitive and Largely Unconscious

Question 5

Slow, deliberate, analytical and consciously effortful mode of reasoning

Answer 5

System 2 - Analytical and Conscious

Question 6

People who design products are experts cursed by their knowledge , and they can’t imagine what it’s like to be as ignorant as the rest of us

Answer 6

Curse of Knowledge

Question 7

True or False: As our knowledge and expertise grow, we may be less and less able to see things from an outsider’s perspective.

Answer 7

True

Question 8

Explains how managers should make decisions; it assumes managers will make logical decisions that are the optimal means of furthering the organization’s best interests.

Answer 8

Rational Model of Decision Making / Classical Model

Question 9

Four Stages in Rational Decision Making:

Answer 9

(1) Identify the problem or opportunity
(2) Think up alternatives solutions
(3) Evaluate alternatives and select a solution
(4) Implement and evaluate the solution chosen

Question 10

Difficulties that inhibit the achievement of goals

Answer 10

Problems

Question 11

Situations that present possibilities for exceeding existing goals.

Answer 11

Opportunities

Question 12

How to change conditions from the present to the desirable

Answer 12

Improvements

Question 13

Analyzing the underlying causes

Answer 13

Diagnosis

Question 14

Three questions to ask during Stage 3:

Answer 14

(1) Is it ethical?
(2) Is it feasible?
(3) Is it ultimately effective?

Question 15

For successful implementation, you need:

Answer 15

(1) Plan carefully

(2) Be sensitive to those affected

Question 16

What should you do if the action is not working?:

Answer 16

(1) Give it more time
(2) Change it slightly
(3) Try another alternative
(4) Start over

Question 17

The rational model is __________, describing how managers ought to make decisions. It doesn’t describe how managers _____ make decisions.

Answer 17

(1) Prescriptive

(2) Actually

Question 18

Explain how managers make decisions; they assume that decision making is nearly always uncertain and risky, making it difficult for managers to make optimal decisions.

Answer 18

Non-rational model of decision making

Question 19

Two nonnational models are:

Answer 19

(1) Satisficing

(2) Intuition

Question 20

Proposed Bounded Rationality and Satisficing Model

Answer 20

Herbert Simon

Question 21

The concept suggests that the ability of decision makers to be rational is limited by numerous constraints

Answer 21

Bounded Rationality

Question 22

Managers seek alternatives until they find one that is not satisfactory, not optimal.

Answer 22

Satisficing Model

Question 23

Making a choice without the use of conscious thought or logical inference.

Answer 23

Intuition

Question 24

Intuition that stems from expertise. A person’s explicit and tacit knowledge about a person, a situation, an object, or a decision opportunity

Answer 24

Holistic Hunch

Question 25

Intuition based on feelings. The involuntary emotional response to those same matters.

Answer 25

Automated Experience

Question 26

Model for Making Decisions, Intuition has two benefits:

Answer 26

(1) Speed up decision making | (2) Helps managers when resources are limited

Question 27

Someone trained about matters of ethics in the workplace, particularly about resolving ethical dilemmas.

Answer 27

Ethics Officer

Question 28

A graph of decisions and their possible consequences; it is used to create a plan to reach a goal.

Answer 28

Decision Tree

Question 29

Ask the following questions when forming a decision tree:

Answer 29

(1) Is the proposed action legal? (2) If "Yes", is the proposed action ethical? (3) If "Yes", does the proposed action maximize shareholder value? (4) If "No", would it be ethical not to take proposed action?

Question 30

Eight Rules for Being a Better Manager:

Answer 30

(1) Be a good coach (2) Empower your team, don't micromanage (3) Express interest in team members success and personal well being (4) Be productive and result oriented (5) Be a good communicator and listen to your team (6) Help your employees with career development (7) Have a clear vision and strategy for the team (8) Have key technical skills so you can help advise the team

Question 31

"Too many companies and too many leaders are more interested in just copying others, doing what they've always done, and making decisions based on beliefs in what ought to work rather than what actually works."

Answer 31

Jeffrey Pfeffer and Robert Sutton

Question 32

Seven Implementation Principles:

Answer 32

(1) Treat your organization as an unfinished prototype (2) No brag, just facts (3) See yourself and your organization as outsiders do (4) Evidence based management is not just for senior executives (5) Like everything else, you still need to sell it (6) If all else fails, slow the spread of bad practices (7) The best diagnostic question: What happens when people fail?

Question 33

What makes it hard to be evidence based:

Answer 33

(1) Too much evidence (2) Not enough good evidence (3) Evidence does not apply (4) People are trying to mislead you (5) You are trying to mislead yourself (6) Side effects outweigh the cure (7) Stories are more persuasive

Question 34

Term used for sophisticated forms of business data analysis

Answer 34

Analytics

Question 35

Is a data mining technique used to predict future behavior and anticipate the consequences

Answer 35

Predictive Modeling

Question 36

Includes not only data in corporate databases, but also web browsing data trails, social network communications, sensor data, and surveillance data.

Answer 36

Big Data

Question 37

True or False: It is possible to measure everything with Big Data.

Answer 37

True

Question 38

The process of examining large amounts of data of a variety of types to uncover hidden patterns, unknown correlations, and other useful information.

Answer 38

Big Data Analytics

Question 39

Uses of Big Data Analytics:

Answer 39

(1) Analyzing consumer behavior and spurring sales (2) Improving hiring and human resource management (3) Tracking movie, music, TV, and reading data, (4) Advancing health and medicine (5) Aiding public policy

Question 40

Strategies that simplify the process of making decisions.

Answer 40

Heuristics

Question 41

Nine Common Decision Making Biases:

Answer 41

(1) Availability (2) Representativeness (3) Overconfidence (4) Confirmation (5) Sunk Cost (6) Anchoring and Adjustment (7) Hindsight (8) Framing (9) Escalation

Question 42

Use of information readily available from memory to make judgements

Answer 42

Availability Bias

Question 43

The tendency to generalize from a small sample or a single event

Answer 43

Representativeness Bias

Question 44

Occurs when people seek information to support their point of view and discount data that do not support it

Answer 44

Confirmation Bias

Question 45

Occurs when managers add up all the money already spent on a project and conclude it is too costly to simply abandon it

Answer 45

Sunk Cost Bias

Question 46

The tendency to make decisions based on initial fatigue.

Answer 46

Anchoring and Adjustment Bias

Question 47

The bias in which people's subjective confidence in their decision making is greater than their objective accuracy

Answer 47

Overconfidence Bias

Question 48

The tendency of people to view events as more predictable than they really are

Answer 48

Hindsight Bias

Question 49

Tendency of decision makers to be influenced by the way a situation or problem is presented to them

Answer 49

Framing Bias

Question 50

Whereby decision makers increase their commitment to a project despite negative information about it

Answer 50

Escalation of Commitment Bias

Question 51

Advantages of Group Decision Making:

Answer 51

(1) Greater pool of knowledge (2) Different Perspectives (3) Intellectual Stimulation (4) Better understanding of decision rationale (5) Deeper commitment to the decision

Question 52

Disadvantages of Group Decision Making:

Answer 52

(1) A few people dominate or intimidate (2) Groupthink (3) Satisficing (4) Goal displacement

Question 53

Occurs when group members strive to agree for the sake of unanimity and thus avoid accurately assessing the decision situation.

Answer 53

Groupthink

Question 54

Occurs when the primary goal is subsumed by a secondary goal.

Answer 54

Goal Displacement

Question 55

Symptoms of Groupthink:

Answer 55

(1) Sense of invulnerability (2) Rationalization (3) Illusion of unanimity and peer pressure (4) "Wisdom of Crowds"

Question 56

How to prevent Groupthink:

Answer 56

(1) Allow criticism | (2) Allow other perspectives

Question 57

Characteristics of Group Decision Making:

Answer 57

(1) Less efficient (2) Size affects decision quality (3) May be too confident (4) Knowledge counts

Question 58

When a group can help in decision making:

Answer 58

(1) When it can increase quality (2) When it can increase acceptance (3) When it can increase development

Question 59

Occurs when members are able to express their opinions and reach agreement to support the final decision

Answer 59

Consensus

Question 60

Do's for achieving consensus:

Answer 60

(1) Use active listening skills (2) Involve as many members as possible (3) Seek out the reasons behind arguments (4) Dig for facts

Question 61

Don'ts for achieving consensus:

Answer 61

(1) Avoid log rolling and horse trading (2) Avoid making an agreement simply to keep relations amicable and not rock the boat (3) Don't put questions to a vote

Question 62

Group Problem Solving Techniques:

Answer 62

(1) Brainstorming (2) Devil's Advocacy (3) The Dialectic Method (4) Project Post Mortems

Question 63

A technique used for help groups generate multiple ideas and alternatives for solving problems

Answer 63

Brainstorming

Question 64

Members of a group come together over a computer network to generate ideas and alternatives

Answer 64

Electronic Brainstorming

Question 65

Six Rules for Brainstorming:

Answer 65

(1) Defer judgement (2) Build on the ideas of others (3) Encourage wild ideas (4) Go for quantity over quality (5) Be visual (6) One conversation at a time

Question 66

Assigns someone the role of critic

Answer 66

Devil's Advocacy

Question 67

A review of recent decisions in order to identify possible future improvements

Answer 67

Project Post-Mortem