Question 1

Mario wants to replace his bathroom. He called the contractor who did his kitchen five years ago and hired him. Mario used
A) decision framing.
B) satisficing.
C) escalation of commitment.
D) innovation.
E) bounded rationality.

Accepted Answer

Mario did not search for alternative options and settled for the contractor he had used before. This is an example of satisficing, which is the act of accepting an available option as satisfactory without looking for the optimal solution.

Question 2

Entrepreneurs often have a hard time psychologically if they decide to sell the business because it feels like a child they created and helped grow. This is an example of
A) optimization.
B) bounded rationality.
C) satisficing.
D) synergy.
E) escalation of commitment.

Accepted Answer

The answer of Entrepreneurs often have a hard time psychologically...

Question 3

Which of the following statements BEST describes bounded rationality?
A) Decision makers are limited by having incomplete information as well as by their values, unconscious reflexes, skills, and habits.
B) Decision makers have complete information regarding the situation and all possible alternatives.
C) Decision makers will be able to fully anticipate the consequences of each available alternative because these consequences define the boundary.
D) People tend to be rational decision makers, and this fact bounds the creativeness and effectiveness of decisions.
E) Alternative permutations make it imperative for rational decision makers to create a bounded number of evoked alternatives.

Accepted Answer

Bounded rationality refers to the idea that decision makers are limited by a variety of factors, including incomplete information, their own values and biases, and cognitive limitations. They are only able to make choices within the bounds of these limitations. Option A is the only one that accurately reflects this concept. Option B suggests that decision makers have complete information, which is not realistic, while Option C suggests that decision makers can fully anticipate the consequences of each alternative, which is unlikely due to uncertainty and complexity in most situations. Option D is a false statement that contradicts the concept of bounded rationality. Option E is a confusing statement that does not accurately reflect the concept of bounded rationality.

Question 4

____ is the selection of the first minimally acceptable alternative.
A) Optimization
B) Intuitive decision making
C) Bounded rationality
D) Escalation of commitment
E) Satisficing

Accepted Answer

Satisficing is the selection of the first minimally acceptable alternative. It means finding a solution that is "good enough" instead of spending more time and resources on finding the optimal solution.

Question 5

The decision that the manager makes using the behavioral model of decision making
A) is made with imperfect information.
B) has an incomplete set of alternatives.
C) uses bounded rationality.
D) requires the manager to engage in satisficing.
E) All of these choices

Accepted Answer

The behavioral model of decision making acknowledges that managers make decisions in situations of bounded rationality and with imperfect information. The model also suggests that managers have a limited set of alternatives and must engage in satisficing, or selecting the first alternative that meets their minimum requirements rather than pursuing the optimal solution. Therefore, all the choices are correct.

Question 6

____ may explain why publishers are more likely to publish a children's book by a recognizable celebrity like Katie Couric than to consider a beautifully illustrated and written book by an unknown author.
A) A need to optimize
B) A need to control the market
C) Synergy
D) Bounded rationality
E) Equifinality

Accepted Answer

Bounded rationality is the cognitive limitation of decision-makers to fully analyze and comprehend all available information due to factors such as time constraints and information overload. In the case of publishers, they may be more likely to choose a book by a recognizable celebrity because it requires less effort to evaluate the potential success of the book compared to evaluating an unknown author's work. This decision-making shortcut can lead to missed opportunities for lesser-known authors with great potential.

Question 7

When a manager makes a decision in spite of having imperfect information, this is known as
A) satisficing.
B) using the rational model of decision making.
C) using the behavioral model of decision making.
D) decision specialization.
E) bounded rationality.

Accepted Answer

The answer of When a manager makes a decision in...

Question 8

Donald Davis has to decide what pickup trucks to buy for his extermination company employees to drive. There are eight different manufacturers and countless models from which to choose. He stops at a Dodge dealership and selects the full-sized model because he does not have much time to spend shopping and because this truck will do the job. What term Herbert Simon use to describe Davis' decision-making actions?
A) Decision framing
B) Satisficing
C) Escalation of commitment
D) Innovation
E) Bounded rationality

Accepted Answer

Davis is using the satisficing strategy, which is a decision-making approach that involves choosing the first option that is good enough rather than spending extensive time and effort to find the absolute best option. This is often used when there are too many alternatives or limited time to make a decision. Therefore, the best answer is B, satisficing.

Question 9

The CEO of a company decided to leave Connecticut because the taxes were some of the highest in the country.  He limited the search for a new location to Georgia, South Carolina, and North Carolina because taxes are much better there and the cost of living is about 20 percent cheaper.  Some employees felt there were more factors to consider.  The CEO engaged in
A) satisficing.
B) equifinality.
C) bounded efficiency.
D) optimization.
E) nominal decision making.

Accepted Answer

The CEO is only considering a limited number of options based on one factor (taxes and cost of living), rather than thoroughly examining all potential locations and weighing multiple factors such as access to talent, proximity to clients, transportation infrastructure, and quality of life. This is an example of satisficing, where a decision maker selects the first option that meets a minimum threshold of acceptability rather than aiming to find the best possible solution.

Question 10

Which of the following is NOT a behavioral force that influences decision making?
A) Intuition
B) Coalitions
C) Risk propensity
D) Ethics
E) Optimization

Accepted Answer

Optimization is not a behavioral force that influences decision making. Instead, it is a rational and analytical approach to decision making that involves weighing different options and selecting the best one based on a set of predefined criteria. The other options (intuition, coalitions, risk propensity, and ethics) are all behavioral forces that can significantly impact decision making.

Question 11

Activist investors often try to influence a board to sell off a business unit if it does not have a lot of synergy with other business units.  To gain enough influence with the board, these investors usually require
A) a coalition.
B) intuition.
C) bounded rationality.
D) interacting group behavior.
E) an escalation of commitment.

Accepted Answer

Activist investors usually need to form a coalition to gain enough influence with the board. This coalition can consist of shareholders who collectively own a significant portion of the company's stock and can vote together to push for changes they desire. By forming a coalition, these investors can share resources, expertise, and ideas to put pressure on the board to sell off the business unit. A coalition also provides more credibility and legitimacy to their cause, improving their chances of success. The other options listed are not applicable or relevant to this scenario.

Question 12

Olga is house hunting in a "hot" market. Some homes sell within hours of listing. Olga finds one that meets her minimum criteria and immediately makes an offer. This is an example of
A) satisficing.
B) equifinality.
C) bounded efficiency.
D) optimization.
E) nominal decision making.

Accepted Answer

Olga quickly made a decision that met her minimum criteria without seeking to find the absolute best option. This is known as satisficing, which is a common approach taken in environments with time pressure or large amounts of uncertainty, such as a hot housing market.

Question 13

A(n) ____ is an informal group allied together for a common purpose.
A) action committee
B) coalition
C) board of directors
D) interacting group
E) department

Accepted Answer

A coalition is a group formed by different organizations, persons or groups for a common goal or to work together to achieve a common objective. A coalition is usually formed by political parties, advocacy groups, or special interest groups who come together to achieve a common goal, and is typically an informal group rather than a formal organization with defined leadership and formal membership.

Question 14

Hailey finds that her company is over billing the government for services. She tells her boss, who says he will take care of it, but he does nothing. Hailey tells her government contact. What model of decision making does Hailey's behavior represent?
A) Classical
B) Nominal
C) Hierarchical
D) Administrative
E) Scientific

Accepted Answer

Hailey is using the Administrative model of decision making as she is taking action to solve the problem rather than relying on her boss to handle it. She has identified the issue and taken initiative to notify the appropriate parties, despite her boss's lack of action.

Question 15

Herbert Simon noted that managers generally fail to make rational decisions because they are limited by their own values, skills, habits, and unconscious reflexes as well as by incomplete information. What name did Simon give this phenomenon?
A) Decision framing
B) Satisficing
C) Escalation of commitment
D) Innovation
E) Bounded rationality

Accepted Answer

Herbert Simon gave this phenomenon the name bounded rationality, which refers to the limitations of human cognition that prevent individuals from being fully rational in their decision-making. This includes cognitive biases, limited attention and processing capacity, and incomplete information.

Question 16

The CEO is retiring. Two candidates for the job remain. Three division heads support Alex. The other four division heads support Pat. These alliances can be called
A) organizational grapevines.
B) coalitions.
C) focus groups.
D) nominal groups.
E) boards of directors.

Accepted Answer

The alliances formed by the division heads can be called coalitions, which are temporary alliances that are formed by individuals or groups to achieve a specific purpose. In this case, the purpose is to support a particular candidate for the CEO position.

Question 17

Bounded rationality is assumed in
A) the rational model.
B) the behavioral model.
C) decision making under certainty.
D) escalation of commitment.
E) the nonlinear model.

Accepted Answer

Bounded rationality is a key assumption in the behavioral model of decision making, which suggests that individuals make decisions based on cognitive limitations, biases, and heuristics rather than perfect rationality. The other options do not necessarily involve this assumption.

Question 18

____ occurs when the decision maker is constrained by his or her own values, experiences, skills, and reflexes. He or she also has less than complete knowledge and information.
A) Optimization
B) Intuitive decision making
C) Bounded rationality
D) Escalation of commitment
E) Satisficing

Accepted Answer

Bounded rationality occurs when a decision maker is limited by their own personal constraints such as values, experiences, and knowledge, preventing them from making a completely rational decision. This leads to satisficing or settling for a satisfactory solution instead of trying to optimize the decision-making process.

Question 19

When a manager evaluates alternatives until she comes to one that meets some minimum standard of sufficiency, selects it, and then goes on to other problems without considering the remaining rational alternatives, she has engaged in
A) means-end inversion.
B) equifinality.
C) satisficing.
D) bounded rationality.
E) classical decision making.

Accepted Answer

The scenario described is an example of satisficing, which means selecting the first alternative that meets the minimum standard of sufficiency, rather than evaluating all possible alternatives.

Question 20

A(n) ____ decision-making model describes how decisions are made rather than prescribing how they should be made.
A) classical
B) nominal
C) hierarchical
D) administrative
E) scientific

Accepted Answer

An administrative decision-making model describes the process of decision-making in organizations as it actually occurs, rather than prescribing an idealized process that should be followed. This approach acknowledges the limitations and bounded rationality that decision-makers face.

Quiz 8: Managing Decision Making and Problem Solving

Mario wants to replace his bathroom. He called the contractor who did his kitchen five years ago and hired him. Mario used

Entrepreneurs often have a hard time psychologically if they decide to sell the business because it feels like a child they created and helped grow. This is an example of

Which of the following statements BEST describes bounded rationality?

____ is the selection of the first minimally acceptable alternative.

The decision that the manager makes using the behavioral model of decision making

____ may explain why publishers are more likely to publish a children's book by a recognizable celebrity like Katie Couric than to consider a beautifully illustrated and written book by an unknown author.

When a manager makes a decision in spite of having imperfect information, this is known as

Which of the following is NOT a behavioral force that influences decision making?

Activist investors often try to influence a board to sell off a business unit if it does not have a lot of synergy with other business units. To gain enough influence with the board, these investors usually require

Olga is house hunting in a "hot" market. Some homes sell within hours of listing. Olga finds one that meets her minimum criteria and immediately makes an offer. This is an example of

A(n) ____ is an informal group allied together for a common purpose.

Hailey finds that her company is over billing the government for services. She tells her boss, who says he will take care of it, but he does nothing. Hailey tells her government contact. What model of decision making does Hailey's behavior represent?

Herbert Simon noted that managers generally fail to make rational decisions because they are limited by their own values, skills, habits, and unconscious reflexes as well as by incomplete information. What name did Simon give this phenomenon?

The CEO is retiring. Two candidates for the job remain. Three division heads support Alex. The other four division heads support Pat. These alliances can be called

Bounded rationality is assumed in

____ occurs when the decision maker is constrained by his or her own values, experiences, skills, and reflexes. He or she also has less than complete knowledge and information.

When a manager evaluates alternatives until she comes to one that meets some minimum standard of sufficiency, selects it, and then goes on to other problems without considering the remaining rational alternatives, she has engaged in

A(n) ____ decision-making model describes how decisions are made rather than prescribing how they should be made.