Chapter 2

Which of the following tasks must be completed first as you begin the decision-making process?

Identifying decision criteria

Identifying the problem
Evaluating decision effectiveness
Analyzing alternatives
Implementing the alternative

This first step in the process allows the manager to identify any discrepancies between an existing and a
desired condition.

You have decided it's time for a new car and make a list of what you want in a new car, such as
fuelefficiency, seating capacity, and cargo area. Which step of the decision-making process are
you in?

Selecting an alternative
Identifying decision criteria
Developing alternatives
Identifying the problem
Allocating weights to the criteria

Once you have identified a problem (i.e., you want/need a new car), you must identify the decision criteria
(such as fuel efficiency, cargo capacity, etc.) as important or relevant to resolving the problem.

You aren't looking for the "sharpest needle in the haystack"; you only want one that is sharp
enough to sew with. This is an example of ________.

escalation of commitment
design thinking
maximizing
satisficing
evidence-based management (EBMgt)

Satisficing involves accepting a solution that is "good enough" rather than seeking the alternative that
maximizes value.

A manager who is fully informed, completely logical, and makes choices that are intended to
maximize value is utilizing ________.

intuitive decision making

rational decision making
bounded rationality
evidence-based management (EBMgt)
a nonlinear thinking style

A manager using rational decision making would be fully informed, completely logical, and make
decisions rationally to select the alternative that maximizes value.

Structured problems are ________.

unfamiliar and require a unique solution for each problem

the result of inconsistently applied rules
the result of a programmed decision
straightforward, familiar, and easily defined
situations that conflict with formal organizational policies

A structured problem is one that is straightforward, familiar, and easily defined. The solution is usually
self-evident or at least reduced to a few alternatives that are familiar and have proved successful in the
past.

A clerk at a department store cannot issue a refund for a customer unless the customer produces
a store receipt. The customer informs the clerk that he never received a receipt in the first place.
The clerk escalates the issue to a manager for resolution. The manager's resolution is an example
of a ________.

nonprogrammed decision
structured problem
programmed decision
procedure
policy

Although the store has a rule that refunds cannot be issued without receipts, this particular situation is
unique because the customer didn't receive a receipt to begin with. To resolve this unstructured problem,
the manager must develop a unique solution by making a nonprogrammed decision.

When Nikki passes the first management quiz with flying colors, she credits her dedication and
intellect. When she fails the first test, she blames it on a poorly worded test. This is an example of
the ________ bias.

self-serving
selective perception
immediate gratification
representation
availability

The self-serving bias is exhibited by those who are quick to take credit for their successes and blame
failure on outside factors.

Bob does not think he can complete the current project he's working on with the resources he has
available. The product may also become obsolete by the time it is released due to scheduling
delays. However, he presses forward because his department has already spent $100,000 and 6
months working on the project. This is an example of the ________.

framing bias
confirmation bias
randomness bias
anchoring effect
sunk costs error

the sunk costs error occurs when decision-makers incorrectly fixate on past expenditures of time, money,
or effort (also known as sunk costs) instead of evaluating future implications of their actions.

When an employee examines the rational aspects of a situation as well as the emotional, and uses
observation and inquiry skills, which approach to decision making is being used?

Machine learning
Design thinking
Deep learning
Big data
Artificial intelligence

Design thinking involves broadening one's perspective beyond rational analysis, using observation and
inquiry skills, and examining emotional aspects of the situation.

Finding meaningful patterns in a data set of potential candidates with the use of mathematics,
predictive modeling, and machine learning to identify the best hires for the organization is
________.

design thinking
rational decision making
analytics
deep learning
artificial intelligence

Analytics is the use of mathematics, statistics, predictive modeling, and machine learning to find
meaningful patterns in a data set.

The authors of the text and the CH2MHill representative all comment on the availability of massive
amounts of data in the current business environment. How would you best summarize their feelings
concerning data and decision making?
The availability of big data helps decision making, but must be used with caution.

The representative of CH2MHill mentions that in many cases making a decision based on a balance of
intuition and data analysis is best. What does this statement most likely illustrate?
Design Thinking

When the CH2MHill representative discussed the problem and his suggested solution with his
colleagues, he received negative feedback. This process was part of which decision-making step?

Analyzing Alternatives

CH2MHill ended up with a compromise; it scaled back on the targeted Regional section and added
more global information on the homepage. What does this type of decision most likely indicate?
Bounded Rationality

The CH2MHill representative says that he noticed that there were only 200 visitors to the China
Regional page, and that there seemed to be little value to that page. This is an example of ________.

identifying the problem

The gap between an existing state and a desired state is referred to as ________.

A problem
Andrew must buy a new office copier. He lists the features the copier must have, such as a built-in
scanner, color copying, and an automatic document feeder, along with how much he can spend.
Which step of the decision-making process does this represent?

Identifying decision criteria

Andrew goes to the office supply store and talks to a sales representative, who shows him several
copiers that can meet his needs. Which step of the decision-making process does this represent?

Developing alternatives

What is the first step in the decision-making process?

Identify a problem

Factors that are important or relevant to resolving a problem are referred to as ________.

Decision Criteria

After looking at several copiers, Andrew decides to buy one. He knows other models might be
available elsewhere, but he doesn't have time to keep looking, and the one he is buying seems to
meet his needs. This is an example of ________.

Satisficing

Some firms, such as Amazon, make extensive use of data and available information to improve
management practices. This method is known as ________.

evidence-based management

__________ refers to the concept that many managers lack the time and the ability to process all
of the alternatives to solve a problem.

Bounded rationality

The approach to decision making that involves soliciting input from a network of people outside
of the organization is called ________.

Crowdsourcing

Alicia is convinced that she can tell more about a job applicant in a 5-minute interview than
through pre-employment tests or reference checks and insists that her gut instincts are never
wrong. Alicia is using ________.

intuitive decision making

The data-driven, systematic use of the best available facts and information to improve
management practice is referred to as ________.

evidence-based management (EBMgt)

The office manager has to place another order for copy paper, so he checks the office supply
company's website to see if either of his preferred brands is on sale before placing the order.
This is an example of a(n) ________.
programmed decision

Brandi's Bakery has received its first major commercial order, and the owner needs to determine
if she can fill this order on her own or if she needs to hire an employee. This is an example of
________.

an unstructured problem

A sign in the college bookstore states that students can return a textbook only if it is still shrink-
wrapped and returned within the first 10 days of the semester. This is an example of a(n)
________.

rule

Cashiers at the supermarket are allowed to adjust the price of an item up to a maximum of $5.0
without getting the manager's approval. This would best be described as a(n) ________.

policy

In order to make exchanges or returns at a clothing retailer, customer service representatives

must follow an established series of steps, such as checking the receipt, inspecting the item for
damage, and issuing a store credit. This is an example of a(n) ________.

procedure

A manager can make the most accurate decision under a situation of ________ because the
outcome of every alternative is known.

certainty

Whenever Gabriela needs to book a hotel room in an unfamiliar city, she always stays at a
Marriott, because she's familiar with the brand. This is an example of ________.

a heuristic

Which decision-making bias refers to a decision maker's tendency to assess how likely
something is to happen or how closely it resembles other events or sets of events?

Representation bias

Alberto is a manager who tends to think he knows more than he does. He is most likely exhibiting
________.

the overconfidence bias

More people will buy ground beef advertised as "80% lean" instead of "20% fat," even though the
meaning is the same. Which decision-making bias does this reflect?

Framing bias

Managers who weigh their first impression of an applicant more heavily than information received
later in the interview are experiencing ________.

the anchoring effect

Artificial intelligence relies on the availability of ________ to create algorithms that mimic the
reasoning ability of the human mind.

big data

Instead of identifying and evaluating alternatives with logic and deductive reasoning, a manager
using ________ would try to envision and entertain new and innovative solutions to a problem.

design thinking

Which of the following managers is using big data in decision making?

A large retailer uses software to adjust prices in real time for more than 70 million items based on
demand and inventory.