Question 1

Bateman & Snell (2004) and Huber (1980) identify four steps in the decision-making process model, although they include the evaluation of the solution.

Accepted Answer

Bateman & Snell and Huber do discuss decision-making processes, but the specific models and the number of steps they propose can vary. The traditional decision-making process often includes more than four steps (e.g., identifying the problem, generating alternatives, evaluating alternatives, choosing an alternative, implementing the solution, and evaluating the decision). The inclusion of evaluating the solution is common across various models, but the exact steps and their descriptions can differ among authors and models.

Question 2

In decision making, the condition in which a chosen action could lead to losses, rather than the intended result, is called uncertainty.

Accepted Answer

The condition described is known as "risk," not "uncertainty." Uncertainty refers to situations where the probabilities of outcomes are unknown, while risk involves known probabilities of potential losses.

Question 3

The four general activities in the generate alternative solutions step in an effective decision-making process are restrict criticism of alternatives, offer as many ideas as possible, remain ethical and combine and improve on ideas.

Accepted Answer

The four general activities in generating alternative solutions are: defer judgment, encourage wild ideas, build on the ideas of others, and go for quantity. Remaining ethical is important but not specifically one of the four activities.

Question 4

When a solution is difficult to reverse, only one solution remains with the organisation - to do more careful planning in future.

Accepted Answer

There are often multiple strategies an organization can adopt to address a difficult situation, including but not limited to careful planning, seeking external advice, innovation, restructuring, or learning from past mistakes to improve future decision-making processes.

Question 5

The tendency to be overly influenced by stereotypes, in making judgements about the likelihood of occurrences, is an example of a bias in information (representativeness).

Accepted Answer

This statement accurately describes the representativeness heuristic, where people judge the probability of an event by how much it resembles what they consider to be a typical example of that event, often leading to bias through the influence of stereotypes.

Question 6

The concept sunk costs is the equivalent to accelerated appreciation.

Accepted Answer

Sunk costs refer to money already spent and permanently lost, which cannot be recovered, while accelerated depreciation is an accounting method that allows for the faster depreciation of an asset's value over the first few years of its life.

Question 7

To cope with uncertainty, small organisations prefer not to hire permanent staff. Instead they hire temporary professional employees, although they cost more. The real option chosen for the situation is referred to as immediate exit.

Accepted Answer

Small organizations prefer to hire temporary professional employees instead of permanent staff to cope with uncertainty because it gives them the flexibility to exit the employment relationship quickly and easily, which is referred to as immediate exit.

Question 8

Decision making is important at which levels?

Accepted Answer

Decision making is important at all levels of an organization, from frontline employees making day-to-day decisions to senior executives making strategic decisions.

Question 9

Managerial decision making typically centres on three types of problems. The type of problem in which there is a potential for significant organisational gain to be made, if appropriate action is taken is called:

Accepted Answer

An opportunity in managerial decision-making refers to a situation where there is potential for significant organizational gain if appropriate actions are taken. This contrasts with problems or crises that require immediate attention to prevent loss or damage.

Question 10

Decisions used for routine situations, where pre-determined answers for immediate actions are important, are called:

Accepted Answer

Programmed decisions are those used in routine situations, where the responses are almost automatic because the situations are familiar and the solutions have already been established.

Question 11

Most of the decisions made by top-level managers are:

Accepted Answer

Top-level managers often face unique, complex, and unstructured situations requiring non-programmed decisions, which are tailored to address these specific, novel challenges.

Question 12

In decision making, the condition in which the decision maker must choose a course of action, without complete knowledge of the consequences that will follow implementation of the decision is called:

Accepted Answer

Uncertainty in decision making refers to situations where the decision maker cannot predict the outcomes of their choices due to insufficient information or understanding of future events.

Question 13

Which of the major classifications or models, regarding how managers make decisions, is based on the notion that managers understand all the possible alternatives, outcomes and ramifications of their decisions?

Accepted Answer

The rational model of decision-making assumes that managers have access to and understand all the necessary information to make a decision, including all possible alternatives and outcomes. This model is based on the premise that managers will make logical and optimal decisions that aim to maximize the organization's benefits.

Question 14

There are three non-rational models of managerial decision making: satisficing, incremental and:

Accepted Answer

The three non-rational models of managerial decision making are satisficing, incremental, and rubbish-bin. These models suggest that decision-making in organizations often deviates from purely rational processes due to various constraints and complexities.

Question 15

Bounded rationality suggests:

Accepted Answer

Bounded rationality suggests that the ability of individuals to make rational decisions is limited by various constraints, including time constraints, which can prevent a thorough analysis of all possible options and outcomes.

Question 16

A manager using the satisficing model of decision making is most likely to:

Accepted Answer

The satisficing model of decision making involves selecting the first option that meets a set of minimum criteria or is "good enough," rather than searching extensively for the best possible solution. This approach is chosen to save time and resources.

Question 17

The model of decision making that is typified by (1) an apparent random pattern of decision-making behaviour by managers, (2) an apparent lack of goal preferences and (3) a favourite solution looking for a problem to solve is the:

Accepted Answer

The rubbish-bin model of decision-making, also known as the garbage can model, is characterized by a seemingly random pattern of decision-making behavior, a lack of clear goal preferences, and solutions that search for problems rather than the other way around. This model suggests that decisions in organizations are often made in a chaotic or nonsystematic manner, especially in contexts of high uncertainty or complexity.

Question 18

A manager who quickly assesses whether an investment could produce results:

Accepted Answer

The intuitive model of decision-making involves relying on one's gut feeling or intuition to make quick decisions without extensive analysis. This approach is often used in situations where time is limited or when comprehensive data analysis is not feasible.

Question 19

The first step in the normative decision-making model presented by the text is to:

Accepted Answer

The first step in any decision-making process, including the normative decision-making model, is to identify the problem. This step is crucial because it sets the direction for all subsequent steps in the decision-making process.

Question 20

Once the problem has been identified and an alternative solution has been decided on, what activity should follow within the effective decision-making process?

Accepted Answer

Being sensitive to the decision's effects on others is crucial after identifying a problem and deciding on an alternative solution. This step ensures that the decision-maker considers the impact of their decision on stakeholders, which is essential for effective and ethical decision-making.

Quiz 5: Managerial Decision Making