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1. Is decision-making a function of management?

No it a part of all functions of management. It is most closely associated with planning though.

2. Why do we make decisions as managers?

To accomplish organizational goals efficiently

3. What's the difference between programmed and non-programmed decisions?

Programmed- a set decision that has been developed for routine repetitive problems
Normally associated with a standing company policy Non-Programmed- specific solution made for a problem that is novel, unique, Complex, or unstructured

4. Do managers make more programmed or non-programmed decisions, in general?

Managers make more programmed decisions, but as you go up the management Ladder, top-level makes more non-programmed

5. What is decision-making under conditions of certainty?

They know all available alternatives and outcomes associated with each. The outcomes of each alternative are known with absolute certainty.

6. What is decision-making under conditions of risk?

Involves a risk of complete certainty regarding the outcomes of various alternatives, But an awareness of the probabilities

7. What is decision-making under conditions of uncertainty?

When managers don't know the alternatives, their potential outcomes or the
Probabilities of the outcomes occurrences

8. Which decision-making condition is most common? Least common? Most difficult?

Most common- Risk
Least common- certainty
Most difficult- uncertainty

9. What is the key to making good decisions under risk?

Accurately determining the probabilities associated with each alternative, always
a risk.

10. How do programmed/non-programmed decisions and the different decision-making conditions relate?

Certainty and risk-programmed
Uncertainty and risk- non-programmed

11. What does the traditional economic model assume about decision-makers? (2 assumptions)

Managers seek to maximize benefits, managers are completely rational

12. Under what decision-making condition do decisions get made in the traditional economic model?


13. What does the behavioral model assume about decision-makers?

The behavioral model assumes that managerial decisions are bounded by the limited Mental capacity and emotions of the manager, as well as environmental forces she Cannot control

14. What is bounded rationality? What three things bound one's rationality?

Managers are unable to grasp the full complexity of managerial decisions due to
Emotions, uncertainty of future events, and limited mental capacity

15. What is satisficing? How does it differ from maximizing? Is it irrational?

Managers don't maximize their benefits, they select the 1st alternative that meets a minimally acceptable standard, rather than going though and evaluating all the alternatives and selecting the best one. This is not necessarily an irrational.

16. What is a heuristic? What are the advantages of and disadvantages of heuristics?

A heuristic is a labor saving device or a rule of thumb that managers use because of
their limited information processing capabilities.
Advantages- Time saving, produces more good decisions than bad
Disadvantages- we use them without realizing, we over rely on them, can lead towards errors due to biases

17. What is the availability heuristic? What factors cause you to overestimate the frequency of an event? Underestimate the frequency of an event?

When the manager asses the frequency of an event based on how easy it is to recall. You would overestimate if the memory is recent, vivid, or emotional. You would underestimate if the event is distant bland, and unemotional.

18. What is the representativeness heuristic? What's the problem with this heuristic?

The tendency of a manager to asses the likelihood of an occurrence by matching it with a preexisting category or stereotypes. This can lead to prejudice or discrimination on non-job related factors and missed opportunities.

19. Under what decision-making conditions do decisions get made in the behavioral model?

Decisions are made under conditions of incomplete information such as risk and uncertainty

20. What does the irrational/implicit favorite model of decision-making say about decision-making?

The decision maker selects a favorite early on in the evaluation of alternatives. Once
the favorite is chosen, all other alternatives are evaluated against it. Can lead the decision maker to distort information.

21. What types of decisions are made irrationally?


22. What is the basic purpose of a brainstorming session?

Generate ideas, not evaluate them. Seven to Nine people are presented with a problem and are asked to identify as many potential solutions as possible

23. What are the four rules in brainstorming?

Criticism is prohibited, freewheeling is welcome, quantity not quality, combinational and improvement is sought.

24. Can inhibitions be totally eliminated in brainstorming sessions?

No it is very difficult

25. What two creativity techniques does synectics use in helping the group to generate better ideas?

Fantasy and analogy

26. What is the superhero technique?

It is a way to stimulate creativity by getting rid of barriers. As a superhero there are no rules therefore nothing can hold you back from solving the problem.

27. In synectics, what is the job of the facilitator? Technical expert?

The facilitator's job is to structure the problem and help lead the discussion away from traditional ways of thinking, and generate ideas. The technical expert helps the group evaluate the feasibility of ideas

28. What's the problem with synectics?

Feasibility of ideas, time consuming, and costly.

29. What research is NGT based on?

The Nominal Group Theory is based on research that discovered more and better ideas are discovered by several persons working separately than by the same persons working in an interactive group.

30. How is NGT different from brainstorming and synectics?

NGT is a structured process and doesn't rely on free association of ideas. It also
Purposely restricts verbal interaction

31. What in NGT does one try to eliminate to improve the decision-making process?

NGT tries to eliminate the inhibiting effects of group interaction

32. What are the steps in NGT?

a. 7-9 members of varying backgrounds and training are brought
b. Members work silently and alone to prepare a list of responses to the problem
c. Members share their ideas in a round-robin manner
d. Structured Interaction (members discuss and evaluate each idea)
e. Members vote privately on each idea (ranked in order of importance) briefly discuss the vote's outcome, and a final secret ballot is conducted

33. What are the defining characteristics of the Delphi technique?

No face to face interaction, experts are not brought together to discuss their ideas, experts remain anonymous

34. What is the reasoning behind the Delphi technique?

Keep experts initial judgment ideas from being influenced by social pressure or other psychological aspects of group behavior

35. What are some problems that can be encountered when using the Delphi technique?

a. The design of the questionnaire can limit the results obtained
b. Time consuming
c. Member interest and motivation may decrease if too much time passes between steps

36. What is the stepladder technique?

It is a technique used during teleconferences when the group cannot be face to face

37. What is the stepladder technique designed to prevent? Promote?

It is designed to promote the decision-making and interaction of group decision making by compensating for the obstacles of non-visual communication.

38. What are operations research techniques? What are they designed to do? What kind of data do they usually require? Are they an aid or substitute for managerial decision-making? What do managers need to think critically about when they use these techniques? Are they applicable to all decisions that managers make?

Operations research helps to evaluate alternatives using statistics. They require quantitative data, which is not applicable for all decisions. It is meant as an aid not a substitute. They are greatest use when making decisions under risk. A more detailed answer is provided on page 19 in the course pack, but I think this is all you will probably need to know.

39. What is meant by the term "confirmatory bias" in decision-making?

We look for information that confirms we made a good decision

40. What is the gambler's fallacy?

After a series of unfortunate events the next event must be better (or chance corrects itself) If I hire 4 bad employees surely the fifth one will be good

41. In making decisions, do people pay more attention to descriptive, qualitative information or statistical, quantitative information?

Descriptive and qualitative

42. In making decisions, people often violate the law of large numbers. What does that mean? Why does it occur?

A large sample size is more accurate and reliable, people often try to substitute their Own limited number of experiences for established guidance. The example Kerry Is how he used to think his own opinions were better than his parents, but he Realizes his parents have had more life experiences or a larger sample size

43. How does the framing of a decision affect decision-making? Positive framing? Negative framing?

When we gain we take less risk, when we are afraid we are going to loose we take more risk to try and recoup the loss

44. What is group decision making a function of?

Individual efforts + assembly effects - process losses

45. What is an assembly effect? Process loss?

Assembly - positive effects for in a group
Process loss- the negative effects

46. What is the optimal size for a decision making group?

5 or 7 (odd to break a tie) allows for better group dynamics and more participation

47. What are the advantages of group decision making?

a. greater pooled resources
b. superior evaluation
c. better understanding of the decision made
d. personal growthe.
e. individuals learn new skills
f. sets up "fairness image"
g. reduces stress

48. What are the disadvantages of group decision making?

a. time consuming
b. indecisiveness
c. domination by a few members
d. leveling effect
e. free riders
f. disagreement over important matters
g. escalation of demands
h. social motives can prevail

49. What is the leveling effect?

Group decision-making causes compromising which kind of bring the decision down to the lowest common denominator. A decision made by the strongest group member is probably better than the decision made by the entire group

50. When does a manager (under what conditions) use individual decision making rather than group decision making?

a. little time to make the decision
b. subordinate acceptance of an issue is not a concern
c. subordinates of a group do not get along well
d. subordinates of the group don't share the organizations goals

51. Rank the following in terms of decision making accuracy: group, average individual in the group, and best member in the group?

1- best member 2- group 3- best member

52. Which is more efficient: group or individual decision making? (consider both short term and long term efficiency)

Group-long run individual-short run

53. Where do you have greater creativity: five individuals generating ideas alone or those same five individuals generating ideas as a group?


54. Which leads to greater acceptance of the decision and better implementation of the decision: individual or group decision making?


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