Management, 14e, Global Edition (Robbins/Coulter)

Chapter 2 Decision Making

1) A problem can best be described as ________.

A) a change from the past
B) something bad that has happened
C) a difference between current conditions and some desired state
D) a loss of something of value

2) Which of the following statements is true concerning problem identification?

A) Problems are generally obvious.
B) A symptom and a problem are one and the same.
C) Generally, what is a problem for one manager is a problem for all other managers.
D) Effectively identifying problems is not easy.

3) Sales of the high-end units have declined. The owners want Arnold, the CEO, to increase
revenues to previous levels. His first action should be ________.
A) to identify previous sales levels
B) to determine why sales are off
C) to compare costs for three new models under development
D) to immediately begin production on the lowest cost model

4) Ridership on the city's public transportation buses has fallen for three weeks in a row. This is
________.
A) a problem
B) a symptom
C) neither a problem nor a symptom
D) a condition, but we need more information to determine whether it is a problem or a
symptom.

5) After identifying a problem, the next step in the decision-making process is ________.
A) identifying decision criteria
B) allocating weights to decision criteria
C) analyzing alternatives
D) developing alternatives

6) To determine the ________, a manager must determine what is relevant or important to

resolving a problem.
A) bounded rationality of a decision
B) escalation of commitment
C) cost of implementation
D) decision criteria

7) Belinda wants to introduce a new model to the product line. Three models are being
developed. Belinda can choose only one. She has decided to focus on target market size,
production costs, and net profits. These are Belinda's ________.
A) alternatives
B) criterion weights
C) decision criteria
D) problems

8) Amanda, a single parent, is looking for a new job. Considering that she has two school-aged
children, she is particularly keen on finding an employer who can provide her with alternative
work arrangements such as flexible work hours and telecommuting. In terms of the decision-
making process, these represent Amanda's ________.
A) decision criteria
B) problems
C) alternatives
D) heuristics

9) Max is planning to go away to college next year and is currently trying to figure out to which
colleges he should apply. He would like to major in English Literature at an accredited liberal
arts college, but is also looking for a university that offers financial aid. In terms of the decision-
making process, these represent Max's ________.
A) problems
B) alternatives
C) decision criteria
D) heuristics

10) After identifying the decision criteria that are important or relevant to resolving a problem,
the next step in the decision-making process is ________.
A) allocating weights to the criteria
B) analyzing the alternatives to solving the problem
C) reducing the number of criteria through the process of elimination
D) implementing the alternative

11) Bryan must select a new supplier for lighting fixtures for his company's mobile homes. He
has decided quality is more important than price but price is more important than lead times.
Bryan will use these priorities to ________.
A) analyze alternatives
B) set his decision criteria
C) allocate weights to the criteria
D) develop alternatives

12) Creativity is most essential in which of the following steps of the decision-making process?
A) analyzing alternatives
B) allocating weights to the decision criteria
C) developing alternatives
D) identifying decision criteria

13) Carla is searching the Internet for sources of Himalayan salt to make bath salts. Carla is at
the ________ step in the decision making process.
A) identify-the-problem
B) identify-decision-criteria
C) allocate-weights
D) develop-alternatives
14) When the overhead cranes crashed into each other for the third time, Joe formed a team to
look into ways to avoid future crashes. After a brainstorming session, the team settled on three
ideas, any of which might work. The team has completed which step in the decision-making
process?
A) develop alternatives
B) analyze alternatives
C) select an alternative
D) implement an alternative

15) Carla has identified several possible sources for Himalayan salt to make her bath salts. Now
she is comparing their prices, quality, and delivery times. At what step is she in the decision-
making process?
A) develop alternatives
B) analyze alternatives
C) select an alternative
D) implement the alternative

16) Carla discovered that the supplier with the highest quality also had the longest lead time. The
supplier with the best lead time had the highest price. To help Carla make her decision, she
should ________.
A) order a small quantity from each supplier for comparison
B) rely on customer reviews to guide her decision
C) multiply her ratings for each criteria by the weight for the criteria then sum the scores
D) check with the Better Business Bureau for customer complaints

17) After Abby listened to the weather report this morning before work, she drove her car and
carried an umbrella instead of riding her motorcycle. Whether she realizes it or not, Abby
________.
A) analyzed criteria
B) implemented a decision
C) assigned weights to criteria
D) evaluated a decision

18) In the decision-making process, while ________, the decision maker puts the decision into
action by conveying it to those affected by it and getting their commitment to it.
A) selecting an alternative
B) evaluating a decision's effectiveness
C) implementing an alternative
D) analyzing alternatives

19) Which of the following is important in effectively implementing the chosen alternative in the
decision-making process?
A) evaluating each alternative by using the established criteria
B) being creative while implementing the alternatives
C) allowing those impacted by the outcome to participate in the process
D) ignoring criticism concerning your chosen alternative
20) Before actually putting the decision into action, the decision-maker may find it prudent to
________.
A) develop the method of evaluating whether the decision is a good one
B) notify upper management that change is coming so they won't be blindsided
C) alert external stakeholders that the problem has been solved
D) check to make sure the conditions that existed at the time of the decision still exist, and make
sure the decision is still the best one

21) The final step in the decision-making process is to ________.

A) determine the criteria for the next decision
B) analyze the process of allocating weights to the decision criteria
C) evaluate the outcome of the decision
D) implement the chosen alternative

22) Joe's team implemented one of the ideas to avoid crane crashes. It is important for the team
to evaluate the results because ________.
A) the team was not sure their idea would work
B) the team wants to impress the plant manager
C) results may vary from expectations
D) another crane crash could cost the team their jobs

23) Managers are assumed to use ________ if they make logical and consistent choices to
maximize value.
A) rational decision making
B) intuitive decision making
C) bounded rationality
D) evidence-based management

24) Dylan must choose among four candidates to fill his open accounting clerk position. If Dylan
uses rational decision making, he will ________.
A) disregard the fact the one of the candidates is the owner's nephew
B) rely on his initial impressions of the candidates to make this decision
C) base his decision on his extensive experience and accumulated judgment
D) involve others in the interviewing process

25) It is assumed that a rational decision maker ________.

A) faces unclear and ambiguous problems
B) is unlimited by his or her ability to process information
C) is unaware of all the possible alternatives and consequences
D) is fully objective and logical

26) When managers make decisions that are rational but limited by their ability to process the
information, they are following the concept of ________.
A) cognitive decision making
B) bounded rationality
C) escalation of commitment
D) intuitive decision making
27) Evelyn's Internet search for information about "vendor for machine screws" yielded more
than 100,000 items. Evelyn did not have time or resources to pursue each of these so she limited
her search to only vendors in her state. By doing this, Evelyn used ________.
A) perfect rationality
B) bounded rationality
C) satisficing
D) intuition

28) Managers cannot possibly analyze all information on all alternatives; they tend to ________,
rather than ________.
A) maximize; satisfice
B) neutralize; satisfice
C) satisfice; neutralize
D) satisfice; maximize

29) ________ results in a solution that is considered "good enough."

A) Escalating
B) Linear thinking
C) Intuition
D) Satisficing

30) Gilda has an idea that would streamline operations, reduce costs, and increase profits. Her
idea requires the cooperation of several departments, some of which have demonstrated a
resistance to change. By considering the context in which the changes must happen and the
people in her organization, Gilda is using ________.
A) evidence-based management
B) bounded rationality
C) intuition
D) positive employee relations

31) Abigail is shopping for a new copier for her company. She has set her price range between
$5,000 and $6,000. The copier must handle a minimum of 10,000 copies per month and have a
useful life expectancy of five years. If Abigail selects the first copier she finds that meets these
criteria, we would say she is ________.
A) using perfect rationality
B) using bounded rationality
C) using intuition
D) satisficing

32) Julie is keen on joining Columbia University to pursue a master's degree in economics.
However, after three months of applying and waiting for an acceptance letter, she finally decides
to attend NYU, which was one of her backup colleges. This is an example of ________.
A) maximizing
B) neutralizing
C) minimizing
D) satisficing
33) Edgar hired a graduate from his alma mater, thinking he would be a successful first line
supervisor. Unfortunately the new hire hasn't worked out as well as hoped. Edgar decided to
invest time and money in training for the new hire but saw little improvement. Next he assigned
a successful supervisor to mentor the young employee. The problems persisted. Edgar is
displaying ________.
A) bounded rationality
B) irrational behavior
C) poor judgment
D) escalation of commitment

34) Farrell has a knack for selecting candidates who become very successful workers. When
asked how he does it, he answered that he "listened to his gut." Farrell is really ________.
A) using his intuition
B) using bounded rationality
C) using perfect rationality
D) satisficing

35) Which of the following is an aspect of intuition?

A) experience-based decisions
B) quality-initiated decisions
C) science-based decisions
D) programmed decisions

36) Intuitive decision making ________.

A) is the systematic use of the best available evidence to improve decision making practice
B) generally results in poor decisions and hence managers should learn to ignore their gut
feelings
C) is the process of making decisions based on experience, feelings, and accumulated judgment
D) complements rational decision making but not bounded rational decision making

37) Farrah has called together her management team to review information about customer
satisfaction gathered by an external research company. Farrah is engaging in ________.
A) perfect rationality
B) bounded rationality
C) evidence-based management
D) relationship management

38) ________ are straightforward, familiar, and easily defined.

A) Programmed problems
B) Structured problems
C) Non-structured problems
D) Nonprogrammed problems

39) Garrett looked at the list of orders for the coming week and made out the production
schedule. He has done this so many times he could do it in his sleep. This situation represents
a(n) ________.
A) structured problem
B) unstructured problem
C) linear problem
D) programmed problem

40) Structured problems align well with which type of decisions?

A) programmed
B) analogous
C) organic
D) nonlinear

41) A(n) ________ decision is a repetitive decision that can be handled by a routine approach.
A) nonprogrammed
B) structured
C) unstructured
D) programmed

42) Harriet's machine has stopped working again. She consulted the operator's manual
troubleshooting guide to find a solution. Harriet used a ________.
A) programmed decision
B) non-programmed decision
C) structured decision
D) non-structured decision

43) When making a decision for a routine situation, which step in the decision making process
can be skipped?
A) identify the problem
B) evaluate decision effectiveness
C) develop alternatives
D) implement the alternative

44) A procedure is ________.

A) an explicit statement that tells a manager what can or cannot be done
B) a series of sequential steps a manager uses to respond to a structured problem
C) used mainly for unstructured, rather than structured, problems
D) subject to the interpretation of the decision maker

45) One of the workers in Henry's department submitted his two weeks' notice so Henry needs to
hire a replacement. The HR department issued a set of instructions Henry must follow to initiate
the search for candidates. In other words, there is a ________ Henry must follow.
A) policy
B) practice
C) procedure
D) program

46) A(n) ________ is an explicit statement that tells a manager what can or cannot be done.
A) agenda
B) objective
C) rule
D) solution
47) "All employees must be at their work stations and ready to work by the time the buzzer
sounds." This is an example of ________.
A) a policy
B) a procedure
C) a practice
D) a rule

48) "Smoking and the consumption of alcohol are strictly prohibited inside the work Premises."
This is most likely an example of a(n) ________.
A) rule
B) objective
C) procedure
D) policy

49) A policy ________.

A) typically serves as a guideline for decision making by setting general parameters
B) specifically states what should or should not be done
C) is a series of sequential steps a manager uses to respond to a structured problem
D) is used when dealing with unstructured problems and non-programmed decisions

50) "We expect to maintain the highest standards of quality in our workmanship." This is an
example of ________.
A) a procedure
B) a rule
C) a policy
D) a practice

51) A(n) ________ typically contains an ambiguous term that leaves interpretation up to the
decision maker.
A) rule
B) procedure
C) edict
D) policy

52) Unstructured problems ________.

A) refer to the usual problems faced by organizations
B) are generally solved using procedures, rules, and policies
C) are accompanied by ambiguous or incomplete information
D) do not require the decision maker to go through an involved decision process

53) After nearly 30 years of growth, sales at Ida's company have begun to decline. None of the
managers have been able to determine the cause. Some say the entire economy is in recession;
others blame a change in suppliers; still others say the work ethic among employees just isn't
what it used to be. This is an example of ________.
A) a structured problem
B) an unstructured problem
C) a programmed problem
D) a non-programmed problem
54) Nonprogrammed decisions ________.
A) involve standardized solutions
B) are usually made by lower-level managers
C) are associated with clear and specific goals
D) are unique and nonrecurring

55) When problems are ________, managers must rely on ________ in order to develop unique
solutions.
A) structured; nonprogrammed decision making
B) structured; pure intuition
C) unstructured; nonprogrammed decision making
D) unstructured; programmed decision making

56) What is the psychological orientation of a decision maker who makes a "maximin" choice?
A) optimist
B) realist
C) pessimist
D) idealist

57) Lower-level managers typically confront ________.

A) unstructured problems
B) new and unusual problems
C) programmed decisions
D) nonprogrammed decisions

58) Ian is a plant manager in a multi-site corporation. He frequently deals with situations
involving new customers and new products. These are often ________.
A) non-linear problems and risky decisions
B) structured problems and programmed decisions
C) uncertain problems and linear decisions
D) unstructured problems and nonprogrammed decisions

59) First-line managers tend to deal with problems that are ________ while upper-level
managers handle the ________ problems.
A) unstructured; structured
B) routine and repetitive; unusual and difficult
C) interpersonal; customer
D) machine-related; interpersonal

60) ________ is a situation in which a manager has the ability to make accurate decisions
because the outcome of every alternative is known.
A) Certainty
B) Risk
C) Bureaucracy
D) Contingency
61) It is time for Jane to order laminated plywood again. She typically orders from one of three
vendors. She knows the price, delivery time, and quality of each vendor. In this situation, Jane
has ________.
A) certainty
B) uncertainty
C) risk
D) structure

62) The manager of an apparel store estimates how much to order for the current spring season
based on last spring's sales figures. The store manager is operating under which of the following
decision-making conditions?
A) uncertainty
B) risk
C) structure
D) certainty

63) ________ is a situation in which a decision maker cannot make reasonable probability
estimates.
A) Necessity
B) Risk
C) Uncertainty
D) Certainty

64) In the late 1970s, Apple launched the Apple computer for individual use. It was a radical
concept; there was no precedent for this type of product. Under these circumstances, Apple faced
a situation of ________.
A) certainty
B) uncertainty
C) risk
D) necessity

65) Which of the following best describes the psychological orientation of an individual making
a "maximax" choice?
A) optimist
B) cynic
C) pessimist
D) defeatist

66) James has calculated the possible profits from three different scenarios for the expansion of
his restaurant, each for a different amount of advertising and promotion. He has chosen to
implement the scenario that offers the greatest profit. James has decided to ________.
A) maximax
B) maximin
C) minimax
D) minimin
67) Depending on the weather and the amount of advertising, Kyle has developed six scenarios
for his summer profits from his lawn care business. His business has failed to reach his
expectations in the past, so he fears the worst. Kyle will likely choose the option that ________.
A) maximizes the maximum possible payoff
B) maximizes the minimum possible payoff
C) minimizes the maximum regret
D) minimizes the minimum losses

68) Rules of thumb that managers use to simplify decision making are known as ________.
A) heuristics
B) folksonomies
C) algorithms
D) sophisms

69) "Red sky at night, sailor's delight; red sky at morning, sailor's warning" is an example of a
________.
A) proverb
B) heuristic
C) rule
D) practice

70) Lucas always seems to "know" exactly what to do in any given situation. At least that's what
he'll tell you. But his ideas don't always work and his overall performance as scored by his
supervisor isn't nearly as great as he thinks it is. Lucas is exhibiting the ________.
A) selective perception bias
B) the anchoring effect
C) self-serving bias
D) overconfidence bias

71) Many new car buyers choose to buy a car with little or no money down and payments for
many years because of the ________.
A) overconfidence bias
B) immediate gratification bias
C) framing bias
D) availability bias

72) The ________ describes how decision makers fixate on initial information as a starting point
and then, once set, fail to adequately adjust for subsequent information.
A) anchoring effect
B) selective perception effect
C) confirmation bias
D) framing bias
73) Sophie is in charge of recruitment at her company. During a particular interview, the first
thing Sophie noticed about the applicant was that he was improperly attired. Though the
candidate possessed the necessary qualifications and effectively answered all her questions,
Sophie rejected him. This is an example of the ________.
A) availability bias
B) self-serving bias
C) anchoring effect
D) confirmation bias

74) "There are no coincidences. If something bad has happened to you, you must have done
something to deserve it." This statement might be made by someone with the ________.
A) framing bias
B) self-serving bias
C) availability bias
D) randomness bias

75) Lila believes the global climate is changing. Every storm, every volcano eruption, every
earthquake is, in her mind, evidence of this climate change. Lila has fallen victim to ________
bias.
A) framing
B) selective perception
C) confirmation
D) representation

76) When decision makers seek out information that reaffirms their past choices and discount
information that contradicts past judgments, they are exhibiting the ________ bias.
A) hindsight
B) availability
C) representation
D) confirmation

77) Beth hired Tom, trained him, coached him, and expected he would be her eventual
replacement when she moved up in the company. She noted each of his accomplishments with
pride but wrote off as vicious gossip the comments from Tom's co-workers that he was making
too many mistakes. Beth is experiencing the ________.
A) selective perception bias
B) confirmation bias
C) framingbias
D) anchoring effect

78) Mildred was persuaded by a fast-talking salesperson to carry an expensive brand of yarns in
her retail needlecraft shop. Seldom does a customer buy this brand, but on those rare occasions
Mildred tells herself she made the right decision. The yarns have been sitting on the shelf for
several months and she has yet to profit from them. Mildred suffers from the ________.
A) immediate gratification bias
B) selective perception bias
C) confirmation bias
D) hindsight bias
79) The ________ occurs when decision makers select and highlight certain aspects of a
situation while excluding others.
A) framing bias
B) availability bias
C) representation bias
D) confirmation bias

80) The Prime Minister of Transylvania prefers darkened rooms, flinches in bright light, and has
unusually long incisors. Despite his long and successful career, his political opponents claim he
is a vampire. This is an example of the ________.
A) representation bias
B) confirmation bias
C) selective perception bias
D) randomness bias

81) It hasn't rained in several days; therefore it is unlikely to rain today. This is an example of the
________.
A) self-serving bias
B) availability bias
C) representation bias
D) randomness bias

82) The last time the Whigs took over Congress, stock prices rose dramatically and
unemployment fell to record lows. Once again, the Whigs are in power, so Jason expects his
stock portfolio to grow significantly. Jason's thinking may be influenced by the ________.
A) representation bias
B) selective perception bias
C) randomness bias
D) anchoring effect

83) The last time he flew Jet Value Air, Juan's plane developed a fuel leak and had to make an
emergency landing. The time before that, his plane was grounded because of an electrical
problem. Juan is sure his current trip will be fraught with problems and he will once again be
delayed. This is an example of the ________ bias
A) confirmation
B) selective perception
C) availability
D) randomness

84) "We can't stop now. We've already invested $100,000 in the project." This speaker is acting
on the ________.
A) anchoring effect
B) availability bias
C) representation bias
D) sunk costs error
85) Whenever anyone praises Mark for his good performance, he has the tendency to attribute
his success to his personal qualities such as his ability to thrive under pressure and his eye for
detail. However, any negative performance feedback is always met with excuses such as
unsupportive team members or insufficient time. This is an example of the ________.
A) self-serving bias
B) confirmation bias
C) representation bias
D) hindsight bias

86) Marty had arranged for a high-profile speaker to deliver the keynote address at her college's
annual function. However, due to unforeseen circumstances, the speaker was forced to drop out
at the last moment. Marty reacts to this news by saying, "I knew all along that this would
happen." This is an example of the ________.
A) anchoring effect
B) availability bias
C) self-serving bias
D) hindsight bias

87) The decisions many managers make in today's business world typically involve ________.
A) little risk, complete information, and long decision timelines
B) some risk, nearly complete information, and moderate timelines
C) no risk, certainty of the outcomes, and time pressure
D) risk, incomplete information, and time pressure

88) A few decades ago, Walmart opened stores in Germany. After a few years, it closed all of
them. The shopping habits of Europeans differed so much from that of Americans that the stores
could not become profitable. What was Walmart's mistake?
A) It did not understand cultural differences.
B) It did not create standards for good decision making.
C) It did not know when it was time to call it quits.
D) It did not use an effective decision-making process.

89) To make effective decisions in today's fast-moving world, managers need to ________.
A) build organizations that shun complexity
B) know when it is time to call it quits
C) ignore cultural differences
D) build organizations that rely on their past successes

90) After the city of Washington, D.C announced it was raising the minimum wage to $12.50 per
hour, WalMart halted construction of a supercenter there, despite having already invested years
in negotiations with the City and tens of thousands of dollars in construction. The top managers
at WalMart remembered the importance of ________.
A) knowing when to call it quits
B) understanding cultural differences
C) building relationships
D) creating standards for good decision-making
91) An effective decision-making process ________.
A) focuses on matters of importance
B) focuses on consistency more than logic
C) avoids subjective and intuitive thinking
D) is complex to use but reliable

92) Design thinking suggests that managers should look at problem identification collaboratively
and integratively with the goal of ________.
A) unveiling a rational approach to address the situation
B) analyzing the situation with deductive reasoning
C) developing solutions which somehow seem inevitable
D) gaining a deep understanding of the situation