Chapter 9

Question 1

Decision Making

Answer 1

The act of choosing one alternative from among a set of alternatives.

Question 2

Decision-Making Process

Answer 2

Recognizing and defining the decision situation.
Identifying alternatives.
Choosing the best alternatives.
Putting the alternative into practice.

Question 3

Types of Decisions

Answer 3

Programmed Decisions

Non programmed Decisions

Question 4

Programmed Decisions

Answer 4

A decision that is a fairly structured decision or recurs with some frequency or both.
Ex: Starting your car in the morning.

Question 5

Non Programmed Decisions

Answer 5

A decision that is relatively unstructured and occurs much less often than a programmed decision.
Ex. Choosing a vacation destination

Question 6

Decision Making Conditions

Answer 6

Certainty
Risk
Uncertainty

Question 7

Decision Making Under Certainty

Answer 7

A condition in which the decision maker know with reasonable certainty what the alternatives are and what conditions are associated with each alternative.

Question 8

Decision Making Under Risk

Answer 8

The availability of each alternative and its potential payoffs and costs are all associated with risks.

Question 9

Decision Making Under Uncertainty

Answer 9

A condition in which the decision maker does not know all the alternatives, the risks associated with each, or the consequences of each alternative.

Question 10

Factor that Prevent Rationality

Answer 10

Lack of Consensus
Unclear Means-end Relations
Noisy Environment

Question 11

Lack of consensus

Answer 11

There must be a general agreement of the definition of problems, decisions and decision-making goals at the beginning.

Question 12

Unclear Means-end Relations

Answer 12

It is impossible to generate an exhaustive list of alternatives then select the most promising.

Question 13

Noisy Environment

Answer 13

The link between outcome and actions is hard to predict.

Question 14

Behavioral Aspects of Decision Making

Answer 14

Bounded Rationality
Satisficing
Coalition
Intuition
Escalation of Commitment
Risk Propensity (risk tendency)
Ethics and Decision Making

Question 15

Bounded Rationality

Answer 15

The concept that decision makers are limited by their values and unconscious reflexes, skills, and habits.

Question 16

Satisficing

Answer 16

The tendency to search for alternatives only until one is found that meets some minimum standard of sufficiency to resolve the problem.

Question 17

Coalition

Answer 17

A political force in decision making which consists of an informal alliance of individuals or groups formed to achieve a goal.

Question 18

Intuition

Answer 18

An innate belief about something without conscious consideration

Question 19

Escalation of Commitment

Answer 19

A decision maker is staying with a decision even when it appears to be wrong.

Question 20

Risk Propensity (Risk Tendency)

Answer 20

The extent to which a decision maker is willing to gamble when making a decision.

Question 21

Ethics and Decision Making

Answer 21

Individual ethics combine with the organization's ethics to create managerial ethics.
Components of managerial ethics
-Relationships of the firms to employees
-Employees to firm
-Firm to other economic agents

Question 22

Forms of Group Decision Making

Answer 22

Interacting groups or teams
Delphi groups
Nominal groups

Question 23

Interacting Groups or teams

Answer 23

Are the most common form or decision-making which consists of an existing group or newly formed team interacting and then making a decision.

Question 24

Delphi Groups

Answer 24

Are sometimes used for developing a consensus or expert opinion from a panel of experts who individually contribute through a moderator.

Question 25

Nominal Groups

Answer 25

Area structured technique designed to generate creative and innovative ideas through the individual contributions of alternatives that are narrowed down through a series of rank-ordering of the alternatives to reach a decision.

Question 26

Ways managers can promote the effectiveness of group and team decision making

Answer 26

Being aware of the pros and cons of having a group or team make a decision. Setting deadlines for when decisions must be made. Avoid problems with dominance by managing group membership. Have each group member individually critically evaluate all alternatives. As a manager, do not make your position known too early. Appoint a group member to be a "devil's advocate." Hold a follow-up meeting to recheck the decision.