decision making

Question 1

Decision Making

Answer 1

The process by which managers respond to opportunities
and threats that confront them by analyzing options and
making determinations about specific organizational goals
and courses of action

Question 2

A decision is needed because

Answer 2

there is a discrepancy between an existing and a desired state of affairs.

Question 3

A systematic, step-by-step process for making decisions

Answer 3

Identify and Verify the problem
Develop an understanding of the problem
Generate alternatives
Evaluate alternatives
Choose an alternative
Implement the plan
Control: measure and adjust

Question 4

Programmed Decision

Answer 4

One that recurs often enough for a decision rule to be developed

Question 5

Decision Rule

Answer 5

A statement that tells a decision-maker which alternative to choose based on the characteristics of the decision situation

Question 6

Non-programmed Decision

Answer 6

One that recurs infrequently and for which there is no previously established decision rule

Question 7

Problem Solving

Answer 7

A special form of non-programmed decision-making in which the issue is unique—it requires developing and evaluating alternatives

Question 8

types of decisions

Answer 8

programmed decision
problem solving
programmed decision
decision rule

Question 9

Rational Model for Nonprogrammed Decision Making

Answer 9

A prescriptive model of decision making that assumes the decision maker can identify and evaluate all possible alternatives and their consequences and rationally choose the most appropriate course of action.

Question 10

Administrative Model

Answer 10

A descriptive model approach to decision making that explains why decision making is inherently uncertain and risky and why managers can rarely make decisions in the manner prescribed by the classical model

Question 11

Ambiguous information

Answer 11

Information whose meaning is not clear allowing it to be interpreted in multiple or conflicting ways

Question 12

Condition of Certainty

Answer 12

Outcomes of each alternative are known

Question 13

information condition types

Answer 13

Condition of Certainty
Condition of Risk
Condition of Uncertainty
Condition of Ambiguity

Question 14

Condition of Risk

Answer 14

Certainty of an outcome is unknown but there is only enough
information to estimate probabilities of various outcomes

Question 15

Condition of Uncertainty

Answer 15

There is insufficient information to estimate the probability
of possible outcomes

Question 16

Condition of Ambiguity

Answer 16

Neither the problem nor the alternatives are clear.

Question 17

Reason for Decision:

Answer 17

Survival
Necessity
Standard Requirement
Comfort or Cosmetic
Perceived Duty

Question 18

Decision Strategies types

Answer 18

prospector, analyzer, defender, reactor

Question 19

Prospector

Answer 19

pioneer, risk taker, first mover, leader

Question 20

Analyzer

Answer 20

observes prospectors and moves when they
feel the decision has been shown to be correct and
the time is right

Question 21

Defender

Answer 21

Decisions are made only in defense

Question 22

Reactor

Answer 22

Decisions are a last option process that occurs
due to some other event

Question 23

Hybrid Approach

Answer 23

Managers use a combination of the Rational and
Administrative approaches to make decisions

Question 24

Creativity

Answer 24

The ability to generate new ideas or to conceive of new perspectives on existing ideas

Question 25

Entrepreneurs

Answer 25

Individuals who notice opportunities and take the responsibility for mobilizing the resources necessary to produce new and improved goods and services.

Question 26

Intrapreneurs

Answer 26

Individuals (managers, scientists, or researchers) who work inside an existing organization and notice an opportunity for product improvements and are responsible for managing the product development process.

Question 27

Intuition

Answer 27

feelings, beliefs, and hunches that come readily to mind

Question 28

Reasoned judgment

Answer 28

decisions that take time and effort to make and result from careful information gathering, generation of alternatives, and evaluation of alternatives

Question 29

Sub-Optimizing

Answer 29

Knowingly accepting less than the best possible outcome to avoid unintended negative effects on other aspects of the organization

Question 30

Satisficing

Answer 30

Is examining alternatives only until a solution that meets minimal requirements is found

Question 31

Escalating Commitment

Answer 31

Committing considerable resources to a project and then committing more, even if evidence shows the project is failing

Question 32

Prior Hypothesis Bias

Answer 32

Allowing strong prior beliefs about a relationship between variables to influence decisions based on these beliefs even when evidence shows they are wrong

Question 33

Representativeness

Answer 33

The decision maker incorrectly generalizes a decision from a small sample or a single episode

Question 34

Illusion of Control

Answer 34

The tendency to overestimate one’s own ability to control activities and events

Question 35

Prospect Theory

Answer 35

Argues that when people make decisions under a condition of risk they are more motivated to avoid losses than they are to seek gains

Question 36

Agency Theory

Answer 36

Occurs when one person or entity (agent) is able to make decisions on behalf of, or that impact, another person or entity (principal)

Question 37

Social Identity Theory

Answer 37

This theory states that a person’s sense of who they are is based on their group membership(s). Therefore, their decisions are based on the expectations, norms, values and standard operating procedures of the group.

Question 38

Individual Participation

Answer 38

The degree to which employees should be involved in the decision making process

Question 39

Benefits of Participation

Answer 39

Incorporates more diverse knowledge, experience, perspectives and skill sets

Question 40

Delphi Nominal Group Technique

Answer 40

Written approach to creative problem solving. Group leader writes a statement of the problem to which managers respond Questionnaire is sent to managers to generate solutions Team of managers summarizes the responses and results are sent back to the participants Process is repeated until a consensus is reached