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Management Test Chapter 3

Managers often ignore problems.
TRUE
Managers typically face ill-structured problems, leaving the decision maker uncertain about how to proceed.
TRUE
Jake Smith is the manager of a small auto repair shop and must decide how much money he owes his suppliers. This is an example of a non-programmed decision.
FALSE
Programmed decisions are useful when there is no predetermined structure on which to rely.
FALSE
Important, difficult decisions tend to be nonprogrammed, and they demand creative approaches.
TRUE
During and after Hurricane Katrina, which destroyed so much of the city of New Orleans, the decisions made by government officials were mostly programmed.
FALSE
Risk is a fact of life in nonprogrammed management decisions.
TRUE
Managers prefer uncertainty to certainty because it makes the job more challenging and interesting.
FALSE
Another way of referring to “risk” is “taking a risk.”
FALSE
Conflict exists when the manager must consider opposing pressures from different sources.
TRUE
Two opposing pressures that can lead to conflict include psychological and interpersonal.
TRUE
The first stage of decision making requires the decision maker to generate alternatives.
FALSE
The “problem” in decision making may actually be an opportunity that needs to be exploited.
TRUE
The first stage of decision making requires the decision maker to generate alternatives.
FALSE
The “problem” in decision making may actually be an opportunity that needs to be exploited.
TRUE
Choosing a ready-made alternative will likely take less time than designing a custom-made solution.
TRUE
Ready-made solutions are ideas that have been seen or tried before.
TRUE
Fundamental to choosing an alternative is to predict the consequences that will occur if the various options are put into effect.
TRUE
Contingency plans are best developed after the decision is made.
FALSE
FALSE
Satisficing is achieving the best possible outcome.
FALSE
FALSE
When you satisfice, you compare your choice against your goal, not against other options.
TRUE
TRUE
Optimizing means that you achieve the best possible balance among several goals.
TRUE
Decision makers should presume that things will go smoothly during implementation.
FALSE
FALSE
Evaluating the decision is useful whether the conclusion is positive or negative.
TRUE
TRUE
Vigilance means that the decision maker evaluates every decision he or she makes.
FALSE
FALSE
Following all six stages of the decision making process guarantees successful decisions.
FALSE
FALSE
Decisions are influenced by subjective psychological biases, time pressures, and social realities.
TRUE
TRUE
The illusion of control is a belief that one can influence events even when one has no control over what will happen.
TRUE
Framing effects refer to a decision bias influenced by the way in which a problem or decision alternative is phrased or presented.
TRUE
TRUE
Discounting the future is said to partly explain governmental budget deficits, environmental destruction, and decaying urban infrastructure.
TRUE
The most conscientiously made business decisions can become irrelevant and even disastrous if managers take too long to make them.
TRUE
Many organizational decisions are the result of intensive social interactions, bargaining, and politicking.
TRUE
Some experts advise that in today’s complex business environment, significant problems should always be tackled by groups.
TRUE
One advantage of using a group for decision making is that one person dominates.
FALSE
One potential advantage of a group for decision making is that people understand the decision.
TRUE
A condition that occurs when a decision-making group loses sight of its original goal and a new, less important goal emerges is called groupthink.
FALSE
Effectively managing group decision making requires an appropriate leadership style, the constructive use of disagreement and conflict, and the enhancement of creativity.
TRUE
The most constructive type of conflict is cognitive conflict.
TRUE
The job of a “devil’s advocate” is to create destructive conflict.
FALSE
Affective conflict is differences in perspectives or judgments about issues, whereas cognitive conflict is emotional and directed at other people.
FALSE
Creativity is more than just an option; it is essential to a firm’s survival.
TRUE
In brainstorming, group members generate as many ideas about a problem as they can.
TRUE
Brainstorming isn’t necessarily as effective as some people think.
TRUE
Incremental rationality is a less-than-perfect form of rationality in which decision makers cannot be perfectly rational because decisions are complex and complete information is unavailable or cannot be fully processed.
FALSE
Incremental decision making occurs when managers make small decisions and move cautiously toward a bigger solution.
TRUE
The confrontational model of decision making arises when people disagree on goals or compete with one another for resources.
FALSE
The garbage can model of decision making occurs when people aren’t sure of their goals, or disagree about the goals, and likewise are unsure of or in disagreement about what to do.
TRUE
Decision making under crisis conditions will inevitably result in poor decisions and negative publicity.
FALSE
Characteristics of managerial decisions include which of the following?
D. Lack of structure
Managers often ignore problems for which of the following reasons?
E. Managers cannot be sure how much time, energy, or trouble lie ahead once they start working on the problem.
__________ are those decisions encountered and made before, having objectively correct answers, and solvable by using simple rules, policies, or numerical computations.
E. Programmed decisions
Decisions encountered and made before, having objectively correct answers and solvable by using simple rules, policies or numerical computations are
B. programmed decisions.
New, novel, complex decisions having no proven answers are
A. nonprogrammed decisions.
The state that exists when decision makers have accurate and comprehensive information is
C. certainty.
The state that exists when decision makers have insufficient information is
A. uncertainty.
Sally, the owner of Learn English! educational salons is contemplating whether to open the company’s first international branch in Europe or in Asia. She is facing a _______ decision.
D. nonprogrammed
Quan works for a large contractor. Company policy requires that in hiring subcontractors, at least three bids must be received and that the lowest bid which meets specifications will be accepted. Quan’s decisions regarding the hiring of subcontractors would be classified as
B. programmed.
Uncertainty exists when the manager
D. has insufficient information to make the decision.
The state that exists when the probability of success is less than 100 percent and losses may occur is
E. risk.
Opposing pressures from different sources is called
A. conflict.
Jonathan has received two job offers. One is from a firm in New York City, where Jonathan would like to live but the other offer in Kansas City would pay more. Jonathan is having a difficult time making a decision due to experiencing
D. psychological conflict.
The initial step in the decision making process is to
E. identify the problem.
A manager may discover that a problem exists with current company performance by comparing it with
A. past performance.
B. the performance of other organizations.
C. future performance forecasts.
D. the business plan for the year.
E. all of the above.
Once a problem is identified and properly diagnosed, the next stage in the decision making process involves
E. generating alternative solutions.
When a solution is specifically designed for a particular problem or set of problems, it is called a
E. custom-made solution.
Custom-made decisions most often require
D. creativity.
Alternative courses of action that can be implemented based on how the future unfolds are called
E. shadow plans.
Making a decision by accepting the first option that meets your goal is referred to as
B. satisficing.
Managers who optimize their decisions will attempt to choose
E. an alternative that achieves the best possible balance among several goals.
To maximize is to
C. achieve the best possible outcome.
Implementing a decision must be planned carefully. Adequate planning most often requires which of the following steps?
B. Order the steps necessary to achieve a fully operational decision.
The final stage in the decision-making process is
E. evaluating the decision.
Negative feedback received during the final evaluation of the decision best indicates
D. the decision was a bad one.
Vigilance in decision making means
B. the manager has carefully and conscientiously completed all stages in the decision making process.
Managers’ faulty thought processes that can lead companies to failure include
D. I must weigh short-term costs and benefits more heavily than long-term costs and benefits.
Which of the following is an example of subjective bias that many corporate executives exhibit?
D. Framing effects
Psychological bias in decision making refers to
D. the inability to be objective when gathering, evaluating and applying information for decision making.
The psychological bias known as “illusion of control” refers to a
B. belief that you can influence events even when you have no control over what will happen.
Gambling is an example of which of the following psychological biases?
A. Illusion of control
Illusion of control, discounting the future and framing effects are all examples of
B. psychological biases.
The way in which the alternatives to a decision are stated or phrased may have an impact on which alternative is chosen. Varying alternatives can be presented in a more favorable or less favorable way, affecting the decision. This is referred to as
A. framing effects.
Discounting the future refers to
D. valuing short-term benefits and costs more heavily than longer-term benefits and costs.
Students who don’t study, dieters who sneak dessert and working people who take the afternoon off when they really need to work are all examples of which psychological bias?
C. Discounting the future
Tactics that are used to make decisions quickly while maintaining the high quality of such decisions include
A. taking a realistic view of the conflict.
B. involving people in the decision who are experts and can be trusted.
C. focusing on real-time information.
D. involving people more effectively and efficiently.
E. doing all of the above.
Real-time information is information that
A. is obtained with little or no delay.
The basic philosophy behind group decision making is that “two heads are better than one.” But does this statement hold true in an organizational setting?
B. Yes, potentially
Advantages in using a group for decision making include
A. intellectual stimulation
A potential disadvantage of group decisions include which of the following?
A. Goal displacement
Which of the following statements about group decision making improves the chances that the decision will be implemented successfully?
C. People who participate in a group discussion are more likely to understand why the decision was made.
Allowing one person to control a discussion or decision is referred to as
C. domination
A phenomenon that occurs in decision-making when group members avoid disagreement as they strive for consensus is
D. groupthink.
A condition that occurs when a decision-making group loses sight of its original goal and a new, possibly less important, goal emerges is
A. goal displacement.
Shannon left the meeting, frustrated as usual. The group really needed to make some decisions regarding next year’s marketing campaign. Tony rammed all his ideas through; they were good, but nobody else dared to speak up or contribute. This group experienced
B. domination.
When a group accepts an alternative that seems to please the members of the group, but the group has not taken the time or effort to explore many options, the group has
C. satisficed.
Groupthink is
A. avoiding disagreement while striving for consensus.
Groups that operate under a condition known as groupthink are most likely
D. concerned with maintaining a positive team spirit.
When new goals emerge in the process of a group making a decision and the original goal is forgotten or replaced, __________ has occurred.
B. goal displacement
Leaders of decision-making groups should
D. pay close attention to the group process.
Issue-based differences in perspectives or judgments are
E. dialectic conflicts.
Emotional disagreements directed toward other people are known as
B. affective conflicts.
Of the suggestions below, the most constructive type of conflict is ______________ conflict.
C. cognitive
In an effort to combat groupthink and an overall lack of creativity, the group leader assigned Tiffani to the task of criticizing ideas throughout the meeting. In this example, Tiffani was playing the role of
B. devil’s advocate.
Two of your employees consistently disagree with each other to the point of developing anger and bitterness, which impacts the work group. This situation is best described as
B. affective conflict.
Which of the following best describes the requirements of the dialectic method?
B. A debate between two conflicting courses of action is held.
In an attempt to make a conflict between two employees less personal and emotional, their manager assigns each of them to approach a problem from a different viewpoint than their original one. This is an example of using the ____________ approach.
A. cognitive conflict
Which of the following statements about encouraging creativity is true?
B. You are being creative if you join two previously unrelated things.
A process in which group members generate as many ideas about a problem as they can; and criticism is withheld until all ideas have been proposed is called
A. brainstorming.
In order to be creative, a brainstorming session must
A. be free of criticism.
____________ is the concept that decision makers cannot be truly rational because decisions are complex and complete information is unavailable.
A. Bounded rationality
The ______________ model of decision making arises when people disagree on goals or compete with one another for resources.
D. coalitional
The _______ model of decision making occurs when decision makers make small decisions and move in piece-meal fashion toward a bigger solution.
B. incremental
Which of the following statements about decision making in a crisis is true?
D. An effective plan for crisis management is essential for the management agenda.
Which of the following is an element of an effective plan for crisis management?
C. Psychological and cultural actions
The decisions in Scenario A can best be classified as either
B. programmed or nonprogrammed.
Decision 4 is an example of which type of decision?
B. Nonprogrammed
If, in decision 3, the manager takes the first candidate they see that meets the minimum requirements, without going through every candidate’s file to see if anyone else is better, they are
B. satisficing.
The owner’s belief that he should make every decision himself by diagnosing the problem as he sees it and then immediately implementing a solution is
B. a mistake that often leads to suboptimal decisions.
Suppose the owner tells you that the reason he makes every decision himself is because he believes that he can control what happens in the business. This unrealistic view is called
B. discounting the future.
The Vice President of Production tells the group that in his area of the company, many managers don’t even agree about what their goals are and certainly cannot agree on what action to take. His managers are using which model of decision making?
C. Garbage can model
The Vice President of Marketing declares that her people disagree on goals and have now formed groups to advocate for their own interests. Her managers are using
D. coalitional model

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