Management - Organizational Behavior Ch. 11

Organizational Behavior, Version 1.1

Bauer & Erdogan

FWK Test Item File

Chapter 11

TRUE/FALSE

1. All decisions have major consequences and require much thought.

(False)

2. Decision making requires action as a solution.

(False)

3. Programmed decisions are unique, creative decisions.

(False)

4. A decision rule is an automated response to a problem or issue that occurs frequently.

(True)

5. An example of a nonprogrammed decision is deciding whether to merge with another firm.

(True)

6. Strategic decisions are usually made by middle level managers.

(False)

7. Tactical decisions are those concerned with how things get done.

(True)

8. The rational decision-making model limits the number of alternatives considered.

(False)

9. The first step of both the rational decision-making model and the creative decision-making process is to identify the problem.

(True)

10. The most difficult step of the rational decision-making process is to establish the decision criteria.

(False)

11. Analysis paralysis is when more and more time is spent on gathering information and thinking about it, but no decisions are made.

(True)

12. People are always interested in making an optimal decision.

(False)

13. To satisfice is to accept the first alternative that meets minimum criteria.

(True)

14. In the intuitive decision-making process, only one choice is considered at a time.

(True)

15. Innovation and creativity are the same thing.

(False)

16. Immersion is to conscious thought as incubation is to unconscious thought.

(True)

17. The three factors that evaluate the level of creativity in the decision-making process are fluency, flexibility, and originality.

(True)

18. Creativity is the interaction between personality traits, attributes, and serendipity.

(False)

19. While setting high idea quotas appears to logically maximize the effectiveness of brainstorming, in reality it has just the opposite effect.

(False)

20. Wildstorming is a process where the group focuses on ideas that are impossible and then tries to imagine what would need to happen to make them possible.

(True)

21. The intuitive decision-making model is best used when the decision maker has experience with the problem and there is time pressure.

(True)

22. The rational decision-making process is best used when the decision is important and you are trying to maximize outcomes.

(True)

23. Hindsight bias is the opposite of framing bias.

(False)

24. Given research on anchoring bias, individuals are more likely to focus on “60% of all people taking the test pass”, rather than “40% of all people taking the test fail.”

(False)

25. Escalation of commitment is also known as “sunken cost fallacy.”

(True)

26. One way to avoid escalation of commitment is to have identifiable turning back points.

(True)

27. Group decisions tend to be more creative than individual ones, but they are often not more effective than those made by individuals.

(False)

28. Groupthink is one of the reasons cited for the tragedy of the Challenger space shuttle.

(True)

29. Group decisions regularly outperform the decision of the group’s best member.

(False)

30. Individual decision making produces a greater commitment to the ultimate decision than does group decision making.

(False)

31. Groupthink is characterized by symptoms like questioning the morality of the group.

(False)

32. Having a devil’s advocate in meetings is a technique that can help avoid groupthink.

(True)

33. The nominal group technique involves using written responses to a series of questionnaires instead of physically bringing individuals together to make a decision.

(False)

34. Research shows that consensus decision making is less accurate and can even make group members feel less satisfied with a decision.

(False)

35. Group decision support systems could make employees more reluctant to share information due to lack of control.

(True)

36. Decision trees are helpful in avoiding errors such as overconfidence bias.

(False)

37. Unethical decisions in bank lending is likely one of the causes of the current economic crisis in the United States.

(True)

38. One basic question to ask to ascertain the ethics of a decision is:  “How would I feel if this decision was broadcast on the news?”

(True)

39. American managers tend to value quick decision making while Chinese managers favor more reflective decision making.

(True)

40. Ingar Skaug, CEO of Wilhelmsen Lines, empowered his employees to make their own decisions when he assumed his position at the global maritime company.

(True)

MULTIPLE CHOICE

Opening Section:  Decision Making Culture: The Case of Google

41. Google is known for having _________.

a. conformity.

b. encourages risk taking and innovation.

c. emotional decision making.

d. making decisions by consensus.

(b) Easy/Comprehension

Section I: Understanding Decision Making

42. Making choices among alternative courses of action, including inaction, is

a. decision making.

b. programmed decisions.

c. satisficing.

d. consensus

(a) Easy/Knowledge

43. Programmed decisions are

a. unique, nonroutine, and important, requiring conscious thinking, information gathering and careful consideration of alternatives.

b. decisions that are made to set the course of an organization.

c. a set of parameters against which all of the potential options in decision making will be evaluated.

d. ones which occur frequently enough that an automated response is developed for them.

(d) Easy/Knowledge

44. Mark works as the frozen food manager in a major grocery store chain. When his stock of two-pound bags of frozen shrimp gets down to two cases, he e-mails his warehouse to send ten cases to restock.

The type of decision Mark is making about restocking shrimp is a

a. strategic decision.

b. nonprogrammed decision.

c. programmed decision.

d. tactical decision.

(c) Medium/Application

45. The “automated” ordering of ten cases when supply gets to two cases in the store is called a(n)

a. consensus decision.

b. decision rule.

c. alternative.

d. anchor.

(b) Medium/Application

46. A unique, nonroutine, important decision requiring conscious thinking, information gathering, and careful consideration of alternatives is a(n)

a. programmed decision.

b. operational decision.

c. nonprogrammed decision.

d. decision rule.

(c) Easy/Knowledge

47. In 2003, six people died from Hepatitis A and 660 were sickened after eating at Chi Chi’s, a popular Mexican restaurant in suburban Pittsburgh, Pennsylvania. In the days following the first death, the CEO of the Chi Chi’s chain made a decision to have all restaurant workers and the restaurant itself tested to determine what established the dangerous conditions. (Eventually the hepatitis outbreak was traced to the green onions in the firm’s salsa.) The decision to order such testing in the crisis situation is an example of

a. a programmed decision.

b. a nonprogrammed decision.

c. a decision rule.

d. a tactical decision.

(b) Medium/Application

48. Strategic decisions

a. refer to those that make the organization run on a daily basis.

b. refer to how things get done.

c. refer to those setting the course of the organization.

d. refer to those that occur frequently enough to have an automated response to them.

(c) Easy/Knowledge

49. Who is most responsible for making strategic decisions?

a. managers

b. engineers

c. low-level employees

d. CEOs.

(d) Medium/Knowledge

50. An example of a strategic decision is

a. How often should I communicate with my new coworkers?

b. How should we market the new product line?

c. Should we downsize our organization?

d. What should I say to customers about our new product?

(c) Medium/Comprehension

51. A decision which centers on how things get done is a(n)

a. tactical decision.

b. strategic decision.

c. operational decision.

d. programmed decision.

(a) Easy/Comprehension

52. Tactical decisions are generally made by

a. CEOs.

b. engineers.

c. managers.

d. Boards of Directors.

(c) Medium/Knowledge

53. Which of the following questions is an example of a tactical decision?

a. Should we takeover our competitor?

b. How should we market the new product line?

c. What should I say to the customers about our return policy?

d. How will I balance my master’s degree workload with my work assignments?

(b) Medium/Comprehension

54. Operational decisions

a. refer to those things that employees do each day to make the organization run.

b. refer to things that might happen in the future.

c. refer to those that set the course of the organization.

d. refer to those that occur frequently enough to develop an automated response to them.

(a) Medium/Knowledge

55. Operational decisions are made by

a. managers.

b. top management teams.

c. employees throughout the organization.

d. CEOs.

(c) Medium/Comprehension

56. An example of an operational decision is

a. Should we consider a merger with our biggest competitor?

b. How often do I go back to the stockroom to get additional products for display?

c. Should we develop a new corporate structure?

d. Which advertising firm should we choose for our fall advertising campaign?

(b) Medium/Analysis

57. Antonio, Alpha Company’s marketing manager, will be listening to the advertising pitches from the final four firms today as he chooses the television ad campaign for his product for the fall season. Antonio is making a(n)

a. programmed decision.

b. strategic decision.

c. tactical decision.

d. operational decision.

(c) Difficult/Application

58. Doris and Lydia are members of the Board of Directors at Beta Corporation.  They are giving very serious consideration to voting to merge their company with Zeta Company for enhanced efficiency, effectiveness and competitive advantage. Doris and Lydia are making a(n)

a. strategic decision.

b. tactical decision.

c. operational decision.

d. programmed decision.

(a) Medium/Application

59. Claudia is a salesperson with a major department store chain that is currently running a “secret coupon sale.” The program allows the salesperson to randomly award a savings coupon to any shopper of the salesperson’s choice. Who the salesperson chooses to award the coupon to is a(n)

a. strategic decision.

b. tactical decision.

c. operational decision.

d. programmed decision.

(c) Medium/Application

60. A series of steps that decision makers should consider if their goal is to maximize their outcome and make the best choice describes

a. the bounded rationality model.

b. the rational decision-making model.

c. the intuitive decision-making model.

d. the creative decision-making model.

(b) Easy/Comprehension

61. If the goal of your decision making is to make the optimum decision or make the best choice, you should utilize

a. the bounded rationality model of decision making.

b. the intuitive decision-making model.

c. the creative decision-making model.

d. the rational decision making model.

(d) Medium/Comprehension

62. When the goal of the decision making exercise is to make a satisfactory decision because you are limited in some way such as time, you should utilize

a. the rational decision-making model.

b. the intuitive decision-making model.

c. the bounded rationality decision-making model.

d. the creative decision-making model.

(c) Medium/Comprehension

63. The bounded rationality decision-making model

a. describes a series of steps that decision makers should consider if their goal is to maximize their outcome and make the best choice.

b. recognizes the limitations of decision making processes by having individuals knowingly limit their options to a manageable set and choose the best alternative without conducting an exhaustive search of alternatives.

c. refers to arriving at decisions without conscious reasoning, arguing that experts make decisions by scanning the environment for cues to recognize patterns.

d. refers to arriving at decisions after first gathering information about the problem and then setting the problem consciously aside until an insightful solution to the problem arises.

(b) Medium/Knowledge

64. The creative decision-making process

a. describes a series of steps that decision makers should consider if their goal is to maximize their outcome and make the best choice.

b. recognizes the limitations of decision making processes by having individuals knowingly limit their options to a manageable set and choose the best alternative without conducting an exhaustive search of alternatives.

c. refers to arriving at decisions without conscious reasoning, arguing that experts make decisions by scanning the environment for cues to recognize patterns.

d. refers to arriving at decisions after first gathering information about the problem and then setting the problem consciously aside until an insightful solution to the problem arises.

(d) Medium/Knowledge

65. The decision-making process where decisions are arrived at without conscious reasoning, arguing that experts make decisions by scanning the environment for cues to recognize patterns is

a. the creative decision-making model.

b. the bounded rationality model.

c. the intuitive decision-making model.

d. the rational decision-making model.

(c) Medium/Comprehension

66. Jennifer has to decide which of two job offers she is going to choose. She begins her process by listing the key criteria she is looking for in a job including salary level, location, promotional opportunities, and so on. She then takes each job offer letter and carefully goes through each line assessing the offer in relationship to the criteria she has established. Jennifer is using which of decision-making model to choose her job?

a. the rational decision-making model

b. the creative decision-making model

c. the intuitive decision-making model

d. the programmed decision-making model

(a) Medium/Application

67. Which is the first step in the rational decision-making model?

a. Establish decision criteria.

b. Identify the problem.

c. Weigh decision criteria.

d. Generate alternatives.

(b) Easy/Comprehension

68. What is the most challenging or difficult step in the rational decision-making process?

a. Identify the problem.

b. Establish decision criteria.

c. Generate alternatives.

d. Evaluate alternatives.

(c) Medium/Comprehension

69. Which of the following statements regarding the rational decision-making model is INCORRECT?

a. The decision maker should generate alternatives before establishing criteria.

b. The decision maker should make certain to clearly identify the problem before undertaking any other step.

c. Successful managers tend to be clear on what they want at the outset of the decision making process.

d. One research study indicated that no alternative generation occurred in 85% of the decisions examined.

(a) Medium/Evaluation

70. Which of the following is NOT an unrealistic assumption made in the rational decision making model?

a. People completely understand the decision to be made.

b. People know all their available choices.

c. People want to make optimal decisions.

d. People have perceptual biases.

(d) Medium/Analysis

71. The availability of too much information leading to more and more time being spent on gathering information and thinking about it, resulting in no decisions being made is

a. satisficing.

b. analysis paralysis.

c. wildstorming.

d. anchoring.

(b) Easy/Knowledge

72. To satisfice is to

a. generate new ideas that are original, fluent and flexible.

b. set parameters against which all of the potential options can be evaluated.

c. accept the first alternative that meets your general criteria.

d. be influenced by the way in which problems are framed.

(c) Easy/Knowledge

73. Anita finishes her college semester on April 15. She will be home from April 15 until May 20 when she is scheduled to have her wisdom teeth removed. She will be going on a family vacation during the third week in July and will be returning to school on August 10 for majorette camp. Anita is looking for a job for the summer. She figures she will take the first job that pays minimum wage and will allow her flexibility for her dental appointment and vacation. Anita is making a decision using the

a. rational decision-making model.

b. bounded rationality decision-making model.

c. intuitive decision-making model.

d. creative decision-making model.

(b) Medium/Application

74. Susan is a paramedic for the county ambulance service. Yesterday there was a terrible accident on the interstate when a bus carrying senior citizens to an Atlantic City casino was struck by a small dump truck as the truck tried to change lanes. Fifteen of the bus riders were killed and 25 injured. As Susan arrived on the scene to perform triage on the accident victims, she quickly made decisions as to which victims needed immediate care and who could wait. Susan was using what decision-making model in making these stressful decisions?

a. bounded rationality model of decision making

b. creative decision-making model

c. intuitive decision-making model

d. rational decision-making model

(c) Difficult/Evaluation

75. Experts make decisions in the intuitive decision-making models based on all the following but

a. climate.

b. training.

c. experience.

d. knowledge.

(a) Medium/Comprehension

76. The incubation step in the creative decision-making process is

a. the step where the decision maker consciously thinks about the problem.

b. the step where the decision maker sets the problem aside and does not consciously think of it.

c. the step where the decision maker gains insight into the problem and has a “eureka” moment.

d. the step where the decision maker verifies the feasibility of the solution and implements the decision.

(b) Medium/Knowledge

77. Which of the following statements about the creative decision-making model is INCORRECT?

a. Creativity is the generation of new, imaginative ideas.

b. The dynamic nature of today’s organizations, including structural changes and cost cutting, have driven creativity in the business.

c. Problem identification is the first step in the creative decision making model.

d. Innovation and creativity are the same process.

(d) Medium/Analysis

78. Which of the following is the correct order of the phases in the creative decision-making model?

a. Problem identification, incubation, immersion, illumination, verification and application.

b. Problem identification, immersion, incubation, illumination, verification and application.

c. Problem identification, illumination, immersion, incubation, verification and application.

d. Problem identification, illumination, incubation, immersion, verification and application.

(b) Medium/Comprehension

79. All of the following are factors that researchers focus on to evaluate the level of creativity in the decision making process EXCEPT

a. fluency.

b. flexibility.

c. rationality.

d. originality.

(c) Easy/Knowledge

80. The creativity level evaluation factor of fluency is

a. how different the ideas are from one another.

b. the number of ideas a person is able to generate.

c. how unique a person’s ideas are.

d. the set number of ideas a group must reach.

(b) Easy/Knowledge

81. Experts propose that creativity occurs as a result of the interaction between all of the following factors EXCEPT

a. situational context (like physical structure).

b. personality traits (like risk-taking).

c. serendipity or luck.

d. attributes (like expertise).

(c) Medium/Comprehension

82. To enhance organizational creativity, a manager should consider focusing on all the following areas EXCEPT

a. team composition.

b. employee pay.

c. culture.

d. leadership.

(b) Medium/Comprehension

83. Which of the following is NOT a way to enhance organizational creativity?

a. Promote brainstorming as a way to generate ideas.

b. Make teams more homogeneous so as to reduce the possibility of conflict

c. Build a physical space conducive to creativity.

d. Role model creative behavior.

(b) Medium/Analysis

84. Which of the following would NOT be good piece of advice to offer a company that is trying to enhance organizational creativity?

a. Ensure team stability by keeping team membership intact for extended periods of time.

b. Use the nominal group technique to avoid the pitfalls of the common group process.

c. Diversify your team.

d. Incorporate creative behavior into the performance appraisal process.

(a) Medium/Analysis

85. Which decision-making model would you use when your goals are unclear, there is time pressure, and you have experience with the problem?

a. the rational decision making model

b. bounded rational model

c. intuitive decision making model

d. creative decision making model

(c) Medium/Evaluation

86. The bounded rationality model should be used to make decisions when

a. the minimum criteria are clear.

b. the decision is important.

c. there is time pressure.

d. new solutions need to be generated.

(a) Medium/Evaluation

87. If you do not have relevant expertise in the issues to make a decision, you should NOT use which decision making model?

a. bounded rationality decision-making

b. rational decision-making model

c. creative decision-making

d. intuitive decision-making

(d) Medium/Evaluation

Section II:  Faulty Decision Making

88. Individuals are influenced in their decision making by all of the following EXCEPT

a. escalation of commitment.

b. foresight bias.

c. anchoring.

d. framing bias.

(b) Easy/Knowledge

89. Overconfidence bias

a. is the tendency of decision makers to be influenced by the way that problems are framed.

b. occurs when looking backward in time where mistakes seem obvious after they have already occurred.

c. refers to the tendency for individuals to rely too heavily on a single piece of information.

d. occurs when individuals overestimate their ability to predict future events.

(d) Easy/Knowledge

90. Sara’s laptop started causing her problems. It was taking a long time to boot up, and froze unexpectedly a number of times. Now the laptop has shut down completely and she cannot get it started up again. One of the group members on her project said to Sara, “You should have gone for help when it started acting up, now you’ve affected all of us.” This scenario is an example of what type of decision-making trap?

a. framing bias

b. anchoring

c. overconfidence bias

d. hindsight bias

(d) Difficult/Application

91. A movie called the “Money Pit” starring Tom Hanks and Shelley Long focused on the couple buying a house and continually having to spend money repairing one part of it after another. A number of times they should have sold the house, but they kept thinking that if they did just one more thing, the house would be great.  This is situation is an example of what decision-making trap?

a. anchoring

b. escalation of commitment

c. framing bias

d. overconfidence bias

(b) Medium/Application

92. The tendency for decision makers to be influenced by the way that a situation or problem is presented is

a. escalation of commitment.

b. anchoring.

c. overconfidence bias.

d. framing bias.

(d) Easy/Knowledge

93. Escalation of commitment occurs because

a. decision makers do not want to admit they were wrong.

b. strict “turn back” points have been established.

c. persistence pays off.

d. decision makers lack personal pride.

(a) Medium/Evaluation

Section III:  Decision Making in Groups

94. The advantages of group decision making over individual decision making include all of the following EXCEPT

a. the decision is more creative.

b. the decision-making process is more enjoyable.

c. the decision-making process is more efficient.

d. the implementation of the decision is easier.

(c) Medium/Analysis

95. The tendency to avoid a critical evaluation of ideas that the group favors is called

a. anchoring.

b. groupthink.

c. analysis paralysis.

d. wildstorming.

(b) Easy/Knowledge

96. Which of the following is true for group decision making?

a. Group decision making is faster than individual decision making.

b. Groups often perform lower than the best individual in the group.

c. Groups make it easier to achieve accountability for decisions.

d. Groups generate fewer ideas than individuals.

(b) Medium/Evaluation

97. Which of the following is NOT a symptom of groupthink?

a. collective rationalizations

b. illusion of vulnerability

c. direct pressure

d. illusions of unanimity

(b) Difficult/Analysis

98. The decision-making technique designed to help with group decision making by ensuring that all members participate fully is

a. majority rule.

b. consensus.

c. the Delphi technique.

d. the nominal group technique.

(d) Easy/Knowledge

99. Which of the following statements regarding techniques for making better decisions is INCORRECT?

a. The nominal group technique is a technique used routinely at most meetings.

b. Consensus requires more time to carry out, but it works well when support is needed for a plan.

c. The Delphi technique is a group process using written responses to a series of questionnaires so individuals are not physically brought together to make a decision.

d. Majority rule is simple, speedy and easy to use.

(a) Difficult/Synthesis

100. Which of the following statements regarding group decision support systems (GDSS) is INCORRECT?

a. GDSS could make employees reluctant to share information.

b. GDSS could become too complex.

c. GDSS improves the output of group collaborative work through higher information sharing.

d. GDSS avoids all possibilities of information overload.

(d) Difficult/Analysis

Section IV:  The Role of Ethics and Culture in Decision Making

101. Which of the following is a guideline in determining whether a decision is ethical?

a. Will I feel better or worse about myself after I make this decision?

b. Does the decision break any organizational rules?

c. Is the decision fair?

d. All of the above

(d) Medium/Evaluation

102. Which of the following statements regarding decision-making styles in other cultures is correct?

a. Chinese managers value quicker decision making more than their American counterparts.

b. Though they use consensus group decision making, the Japanese make much faster decisions than Dutch decision makers.

c. Dutch managers tend to complete consensus decision making much more than their Japanese counterparts.

d. Japanese managers using consensus decision making implement those decisions much faster than other cultures.

(d) Medium/Evaluation

Closing Section:  Empowered Decision Making:  The Case of Ingar Skaug

103. Ingar Skaug, CEO of Wilhelmsen Lines, changed the decision-making style of his firm to one that

a. gave him all the decision-making authority in his firm.

b. empowered employees to make their own decisions.

c. led his employees to think that he wanted their input but made the decisions himself.

d. made decisions by consensus.

(b) Medium/Analysis

FILL IN THE BLANK

104. _________ _________ is making choices among alternative courses of action including inaction.

(Decision making)

105. __________ decisions occur frequently and have automated responses developed for them, while ___________ decisions are unique and require conscious thinking, information gathering and careful alternative generation.

(Programmed, nonprogrammed)

106. Automated responses that we use to make decisions are called _______ _________.

(decision rules)

107. ___________ decisions set the course for an organization and are made by CEOs, while ______________ decisions are those that make the organization run and are made daily by employees.

(Strategic, operational)

108. “How should we market the new product line?” is an example of a ____________ decision made by managers.

(tactical)

109. When a decision is important and outcomes need to be maximized, use the __________ ___________ __________ __________ to make your decision.

(rational decision-making model)

110. The __________ _____________ __________ recognizes the limitations of the decision-making process and thus the tendency of individuals to satisfice in their decisions.

(bounded rationality model)

111. When time pressures arise, as when a life or death situation occurs, and an individual has expertise in the area, the _________ ________ ____________ __________ is often used to make decisions.

(intuitive decision-making model)

112. The generation of new, imaginative ideas is ___________.

(creativity)

113. The phase of the creative decision-making process where the individual sets the problem aside and does not consciously think about it for a while is the ________________ phase.

(incubation)

114. The insightful or “eureka” moment in the creative decision-making process is the ___________ phase.

(illumination)

115. In assessing the level of creativity in the decision-making process, ______ is the number of ideas a person is able to generate.

(fluency)

116. _________________ is how different ideas generate in the creative decision-making process are from one another.

(Flexibility)

117. The uniqueness of ideas generated during the creative decision-making process is _______________.

(originality)

118. Some experts suggest that creativity is the interaction among the three factors of _______________, ________________, and ________________.

(personality traits, attributes, situational context)

119. Ideas for enhancing organizational creativity focus on team composition, team process, ________ and ____________.

(leadership, culture)

120. The group process of generating ideas that follow a set of guidelines including no criticism of ideas during the process, the notion that no idea is too crazy, and that builds on other ideas is _______________.

(brainstorming)

121. Since research suggests that the quantity of ideas leads to better quality ideas in the end, setting ________ ___________ ________ where the group must reach a set number of ideas before they are done brainstorming is a recommended practice.

(high idea quotas)

122. _______________ is a variation on brainstorming where the group focuses on ideas that are impossible and then imagines what would need to happen to make them possible.

(Wildstorming)

123. A decision-making trap where people overestimate their ability to predict future events is called _______________.__________.

(overconfidence bias)

124. When you say, “I know I should have taken this car in for service when I first heard the noises, and now it’s just quit on me,” you are exhibiting the decision-making trap, _________ ________.

(hindsight bias)

125. Maria relied on knowing what an outstanding worker Gordon was to hire Gordon’s sister for the entry-level position. Gordon’s sister is very unreliable. Maria fell into the decision-making trap of _______________ in making her hiring decision.

(anchoring)

126. The tendency for people to focus on television ads that say, “Medicine X is 60% effective in reducing symptoms” does not look at the fact that that statement means that “Medicine X fails to reduce those symptoms 40% of the time.” This tendency is called ____________ ____________.

(framing bias)

127. The old adage, “Don’t throw good money after bad” is another way to describe the decision-making trap of ____________ _______ ____________ also known as the “sunken costs fallacy.”

(escalation of commitment)

128. Research suggests that _____________ decision making offers fewer ideas than ________ decision making.

(individual, group)

129. ___________ is the group pressure phenomenon that increases the risk of the group making flawed decisions by leading to a reduction in mental efficiency, reality testing, and moral judgment.

(Groupthink)

130. One of the symptoms of ________ is the illusion of invulnerability that is shared by all group members and creates excessive optimism and encourages them to take extreme risks.

(groupthink)

131. The ________ _________ ____________ is a tool designed to help group decision making by ensuring that all members participate fully.

(nominal group technique)

132. The __________ ________ is a group process using written responses to a series of questionnaires instead of physically bringing individuals together to make a decision.

(Delphi technique)

133. When the goal is to gain support for a particular idea or plan of action, the _______ form of decision should be used as it is inclusive, participatory, cooperative and democratic in nature.

(consensus)

134. An interactive computer-based system that combines communication and decision technologies to help groups make better decisions is a _________ _____________ __________ _____________.

(group decision support system)

135. A ___________ ____________ is a diagram where answers to yes or no questions lead decision makers to address additional questions until they reach the end of the tree.

(decision tree)

136. In Japan, nemawashi refers to building _______________ within a group before a decision is made.

(consensus)

SHORT ANSWERS

137. What is the difference between a programmed and an unprogrammed decision?  Given an example of each.

A programmed decision is a decision that occurs frequently enough that an automated response is developed for it. An unprogrammed decision is one that is unique and requires conscious thinking, information gathering and careful consideration of alternatives.

An example of a programmed decision is when a restaurant automatically re-orders napkins and placemats for use in the restaurant when the stock of those items gets to, for example, two cases in the stockroom. A nonprogrammed decision might be when a firm faces a crisis situation as when Procter and Gamble was faced with allegations that its corporate logo was supportive of the devil and had to address such charges.

138. Give an example of a strategic decision and indicate who usually makes it.

A strategic decision sets the course for the organization. An example of a strategic decision is to decide whether you should acquire another company or not.  Strategic decisions are made by CEOs, boards of directors, or other top level teams.

139. Give an example of a tactical decision and indicate who makes it.

A tactical decision is focused on how things get done. An example is how to market a new product. Tactical decisions are made by managers.

140. Give an example of an operational decision and indicate who makes it.

An operational decision is made by employees throughout the organization and refers to decisions that employees make each day to make the organization run.  An example is when an employee is expected to visit the stockroom in a retail establishment.

141. Compare the rational decision-making and the bounded rationality model.

The rational decision-making model is a series of steps that decision makers consider if their goal is to maximize the quality of their outcomes. The optimal outcome desired creates a need to thoroughly examine alternatives. The bounded rationality model recognizes the limitations of searching for alternatives and suggests that decision makers often satisfice, accepting the first alternative that meets minimum criteria because an exhaustive search is not possible.

142. Differentiate between the intuitive and creative decision-making processes.

The intuitive decision-making process is one where experts scan the environment for cues and once a pattern is discerned, choose a course of action based upon their experience. The creative decision-making process is one where problem identification is followed by immersion, incubation and then illumination and finally verified and applied. The creative process is characterized by the incubation period where the problem is set aside for a time period and illumination is the “eureka” moment when the decision is made.

143. What are the three factors that are used to evaluate the level of creativity in the decision-making process?

The three factors are: fluency or the number of ideas a person is able to generate; flexibility or how different the ideas are from one another; and originality or how unique a person’s ideas are.

144. Describe two decision-making traps and how to avoid them.

There are five decision-making traps:

Overconfidence bias is when individuals overestimate their ability to predict future events. To avoid this trap, stop and be realistic in your judgments.

Hindsight bias is the opposite of overconfidence bias as it looks backward in time where mistakes seem obvious after they have occurred. It is important that decision makers remember this bias when judging other people’s actions.

Anchoring is the tendency for individuals to rely too heavily on a single piece of information. To avoid this bias, the individual needs to gather sufficient data for assessment.

Framing bias is the tendency for decision makers to be influenced by the way a situation or problem is presented. Avoidance of this bias occurs through simple awareness of the problem and a close monitoring of actions to discern when it occurs.

Escalation of commitment is when individuals continue on a failing course of action after information reveals it may be a poor path to follow. The approach to dealing with this is to assess the scenario and make a clear decision recognizing that sometimes the best choice is to admit you failed.

145. Do groups make better decisions than individuals?

It depends on the specifics of the situation. What research does tell us however, is that groups, particularly those that are diverse, often make better decisions than individuals because more options are considered. When groups make decisions, they are often implemented much more easily because those involved in the process have already “bought into” the decision. What must be guarded against is the group becoming too cohesive and not evaluating alternatives critically but simply accepting them because the group supports them.

146. What are two symptoms of groupthink?

There are eight symptoms of groupthink: illusion of invulnerability; collective rationalization; unquestioned belief in the group’s inherent morality; stereotyped views of outgroups; direct pressure; self-censorship; illusions of unanimity and the emergence of self appointed mindguards.

147. Describe the steps in the nominal group technique.

The nominal group technique was developed to ensure all members in a group participate fully. The first step is when each member of the group silently and independently writes down ideas. Step two is going around the room in order gathering all the ideas that were generated. The third step is a discussion that focuses on each of the ideas generated and finally, the group votes on their favorite ideas.

148. What is the difference between majority rule and consensus?

Majority rule is when each individual within a group gets a vote and whatever alternative received the most votes, wins. It is considered effective and is simple, speedy, easy to use and fair.

Consensus is a decision-making rule that groups use when the goal is to gain support for an idea or plan of action. This process requires more time and focuses on the aspect of plan support.

149. Explain how group decision support systems can become counterproductive.

Individuals can only process so many ideas and so much information at one time.  As virtual meetings grow larger, it is reasonable to figure that information overload can occur and good ideas will fall through the cracks, recreating the problem that the group decision support system was designed to prevent. Also, the system could also just get too complicated.

150. What are two basic questions that can be asked to assess the ethics of a decision?

Is this decision fair?

Will I feel better or worse about myself after I make the decision?

Does this decision break any organizational rules?

Does this decision break any laws?

How would I feel if this decision was broadcast on the news?

151. Briefly describe how decision making differs around the globe.

Decision-making styles and approaches differ depending on the culture.  Research, for example, shows that Japanese and Dutch decision makers are consensus-oriented while American decision makers value quick decisions.

ESSAY

152. Using the rational decision-making model as a template, discuss a recent decision you made.

Step one:  Identify the problem.

Choosing a college to attend.

Step two:  Establish decision criteria.

Offers specific major, cost parameters, distance from home.

Step three:  Weigh decision criteria.

Prioritize each of the criteria, say the cost is the most important

  factor.

Step four:  Generate alternatives.

List the schools you are considering

Step five:  Evaluate alternatives.

What is the positive and negative of each school?

Step six:  Choose the best alternative.

Pick a school.

Step seven:  Implement the decision.

Apply to the school and gain admission.

Step eight:  Evaluate the decision.

After a semester, do you still like it?

153. Darlene is a new manager at XYZ Corporation. She is most interested in enhancing the creativity of her department. What recommendations would you suggest to her?

Four areas can be the focus of creativity enhancement efforts. They are team composition, team process, leadership and culture.

Team composition might be enhanced if you diversify the team, change group membership or use leaderless teams to allow teams freedom to create without trying to please anyone up front.

Team process can be enhanced by engaging in brainstorming, using the nominal group technique, or using analogies to envision problems and solutions.

Leadership: Challenge teams so they are engaged, not overwhelmed; let people decide how to achieve goals, support and celebrate creativity, and role model creative behavior.

Culture: institute organizational memory; build a physical space conducive to creativity; and incorporate creative behavior into the performance appraisal process.

154. You work for a company that was a sub-contractor for the Challenger space shuttle. Cognizant of the groupthink that made the fateful launch decision, you want to ensure that such a condition does not exist in your firm. The company executives have decided that a seminar is necessary to define groupthink, its causes, and provide recommendations do avoid it in the future. You are in charge of that seminar.

Groupthink is a group pressure phenomenon that increases the risk of the group’s making flawed decisions leading to a reduction in mental efficiency, reality testing, and moral judgment. The eight symptoms of groupthink are:  

illusion of invulnerability; collective rationalization; unquestioned belief in the group’s inherent morality; stereotyped views of outgroups; direct pressure; self-censorship; illusions of unanimity and the emergence of self-appointed mindguards.

To avoid groupthink, groups should: discuss the symptoms of groupthink, assign a rotating devil’s advocate, invite experts who are not part of core decision making; encourage a culture of difference; and debate the ethical implications of the decisions.

Individuals should: monitor personal behavior for signs of groupthink, check for self-censorship; carefully avoid mindguard behavior; avoid putting pressure on other group members to conform; and remind members of the ground rules for avoiding groupthink.

Finally, group leaders should break the group into subgroups from time to time; have more than one group work on the same problem; remain impartial and refrain from stating preferences at the outset of decisions; set a tone of encouraging critical evaluations throughout deliberations; and create an anonymous feedback channel through which all group members can contribute if desired.

155. Ron is the owner of a small business. He is deciding whether to expand his operation to a second location or remain only at his original site. He decides to perform a “premortem” on the project and has asked your assistance in making sure he covers all appropriate steps in the process. What recommendations would you provide him?

A premortem is designed to imagine what could go wrong and avoid it before spending any money or having to change course.

The six steps to be followed are:  

A planning team creates a plan outline for the issue.

Either the existing group or a unique group imagines the issue at its worst. The group writes down all the reasons they can imagine that led to this failure.

The list of ideas is reviewed for additional ideas.

The issues are sorted into categories in a search for themes.

The plan should be revised to account for the flaws detected.