Managerial Decision Making — Medium-Difficulty Exam

Identifying a problem or opportunity and taking action to resolve or exploit it

Selecting the only available alternative without investigating the situation

Collecting information and reporting it to senior managers

Carrying out a policy that has already been approved

Managerial choices strongly influence organizational performance, growth, and survival

It eliminates the need for managerial leadership and communication

It ensures that every decision is entirely free of uncertainty

It replaces the need to evaluate results after implementation

A choice made from a set of available alternatives

Any information a manager receives about an organization

A rule designed for situations that recur frequently

The result obtained after a plan has been implemented

Processing the company's recurring payroll according to an established procedure

Choosing a long-term strategy for entry into an unfamiliar country

Responding to a sudden crisis that has no established operating procedure

Creating an innovation policy when the organization's goals remain unclear

Selecting a supplier from an approved list under the standard purchasing policy

Reordering standard materials when inventory reaches the established reorder point

Determining how to respond to an unprecedented product-safety crisis

Developing a new market-entry strategy when reliable competitor information is unavailable

The information needed to evaluate the alternatives is available

The manager knows the goal but cannot identify any feasible alternative

Future results depend on events that management cannot control

Stakeholders interpret the organization's purpose in conflicting ways

The future outcome is subject to chance even though the manager has relevant information

All information needed for the decision is completely available

The organization's goals are disputed by several stakeholder groups

The manager lacks information about future events and cannot forecast their outcomes

Certainty

Ambiguity based mainly on conflicting organizational goals

Uncertainty

A programmed decision with no need for analysis

A manager has complete cost data for three equipment options

A team knows the operational cause of a production delay

Departments disagree about the objective that a new project should pursue

Managers cannot agree on what the problem is or which organizational objective should guide the choice

To compare alternatives more effectively and reduce uncertainty

To avoid responsibility for implementing the eventual choice

To guarantee that every possible future event can be predicted

To turn a nonprogrammed decision into a programmed one

Programmed decision

Nonprogrammed decision

Political model decision

Uncertain administrative decision

Programmed because management can use the organization's decision-making process

Nonprogrammed because the situation is unique and poorly structured

Certain because managers have observed the regulation for many years

Purely administrative because the change follows a legal process

Certainty means relevant information is available; uncertainty means relevant information is incomplete

Certainty means goals are disputed; uncertainty means goals are agreed upon

Certainty means outcomes are controlled; uncertainty means outcomes cannot occur

Certainty means decisions are repeated; uncertainty means decisions are unique

Risk involves outcomes subject to chance; uncertainty involves incomplete information about future events

Risk means all information is missing; uncertainty means all information is available

Risk means the goals are unclear; uncertainty means the alternatives are clear

Risk means the problem recurs; uncertainty means the problem is unique

The situation recurs regularly and an established rule can be applied

The problem has never occurred before and no alternatives can be identified

Stakeholders cannot agree on the organization's goals

The manager lacks information about every possible future outcome

Their situations are unique or unstructured, so standard courses of action may not apply

They can only be made by senior executives

They never involve implementation or feedback

They require a single objectively correct solution

A logically rational manager evaluates known alternatives under known criteria to maximize organizational goals

A manager accepts the first workable solution because information and time are limited

Coalition members negotiate goals because their interests are incompatible

A manager relies on immediate experience without consciously comparing alternatives

The decision maker's goals are clearly established and broadly accepted

Stakeholder groups bargain until they force a political compromise

The manager must choose the first alternative that meets minimum requirements

The manager can examine every possible alternative without resource constraints

The manager can strive for certainty and calculate the consequences of alternatives

The manager must accept incomplete information without attempting to improve it

The organization has only one interest group with no competing goals

The final choice will be determined primarily through political negotiation

They are identified and known before the alternatives are compared

They emerge only after a coalition has negotiated a compromise

They consist solely of whatever information happens to be available

They are intentionally kept vague to preserve managerial flexibility

The maximum possible outcome for the organization's goals

The first alternative that satisfies minimum criteria

The option favored by the largest informal coalition

The alternative requiring the least managerial effort

It describes how managers actually decide when facing human and environmental limitations

It prescribes the ideal procedure that every rational manager should always follow

It explains decisions solely through negotiation among competing interest groups

It assumes that managers possess complete information and unlimited time

Managers have limited information, time, cognitive capacity, and other resources

Managers are prohibited from using logic or quantitative analysis

Managers are permitted to consider only one alternative

Managers must accept any outcome regardless of whether it meets objectives

Satisficing

Maximizing

Bargaining

Certainty

Managers face constraints involving information, time, cognitive ability, and organizational resources

Managers are forbidden from considering new approaches

Every organization has already evaluated all possible solutions

Managers always prefer political negotiation to analysis

A rapid grasp of a decision situation based on experience without conscious analysis

A detailed calculation of every alternative's expected monetary value

A compromise reached after extended negotiation with stakeholders

A rule automatically applied to a recurring organizational problem

Goals are often vague and lack broad consensus

Goals are always clear, measurable, and universally accepted

Goals are determined only by external government regulators

Goals do not influence the choice among alternatives

Nonprogrammed decisions involving complex or disputed issues

Routine decisions governed entirely by a fixed policy

Decisions in which all facts and outcomes are completely known

Only personnel decisions involving a single employee

Organizations contain participants with diverse and sometimes conflicting interests

Every participant has exactly the same objective and information

Managers can identify and evaluate every relevant dimension of a problem

Decisions are made without discussion or negotiation

As ambiguous, incomplete, and interpreted differently by interested parties

As complete, objective, and sufficient for calculating the optimum

As irrelevant because decisions are made entirely through intuition

As available only after the final alternative has been implemented

They generally lack the resources needed to identify and analyze every dimension

They can identify every dimension if they use the rational model

They need not understand the problem because goals are always imposed externally

They always understand every problem but disagree only over implementation details

Through debate, bargaining, and negotiation among coalition members

By applying a fixed rule without discussion

By choosing the first alternative that meets a minimum threshold

By mathematically calculating the only optimum under complete information

The classical model seeks the optimum, whereas the administrative model often settles for a satisfactory solution

The classical model assumes vague goals, whereas the administrative model assumes complete agreement

The classical model relies on coalition bargaining, whereas the administrative model requires full information

Both models assume that the manager has unlimited time and information

The administrative model emphasizes constrained satisficing, whereas the political model emphasizes bargaining among competing interests

The administrative model assumes full information, whereas the political model assumes complete certainty

The administrative model requires maximizing, whereas the political model permits only programmed decisions

The administrative model ignores organizational factors, whereas the political model ignores conflict

Classical model

Administrative model

Political model

Programmed decision model

Classical model

Administrative model

Political model

Certainty model

Administrative model

Classical model

Political model

Programmed decision

Rational choice aims for the maximum outcome under ideal assumptions, while administrative choice seeks an acceptable outcome under practical constraints

Rational choice uses intuition, while administrative choice uses only statistical analysis

Rational choice is descriptive of actual managers, while administrative choice describes an ideal decision

Rational choice ignores organizational goals, while administrative choice accepts any outcome

It assumes clarity, calculability, rationality, and goal consensus that managers do not always possess

It contains no logical sequence for comparing alternatives

It applies only to decisions made by lower-level employees

It assumes that managers never communicate before deciding

It recognizes diverse interests, incomplete information, resource constraints, and negotiation

It assumes that all decisions can be calculated with perfect certainty

It assumes that every problem has one objectively superior solution

It removes the need for managerial persuasion during implementation

Recognizing that a decision is required

Evaluating the results of the previous alternative

Implementing the selected course of action

Diagnosing the causes of an established problem

When organizational performance falls below an established goal

When the organization discovers a way to exceed its current goals

Whenever several feasible alternatives exist

After a selected alternative has been implemented

Current sales are 10 percent below the annual target

A new technology could enable the organization to exceed its present output goal

A customer complaint indicates that a promised service was not delivered

A product line is generating losses despite meeting its original sales target

To understand the current situation and analyze the causes of the problem

To persuade employees to accept the solution selected by management

To choose the alternative with the greatest expected benefit

To communicate the results of a completed project

What is the disequilibrium, when and where did it occur, how did it occur, and how urgent and interconnected is it?

Which solution has the highest expected monetary value?

Who should be appointed to lead the project after the decision is made?

Did the chosen alternative meet last year's performance standard?

Diagnosis and analysis of causes

Development of alternatives

Implementation

Evaluation and feedback

Generating a set of possible solutions to the diagnosed problem

Determining why the problem first occurred

Assigning resources to the solution already selected

Measuring whether the solution met the objective

Established procedures already specify how recurring situations should be handled

Programmed decisions never face performance problems

Managers are prohibited from using creative approaches

All possible future outcomes are known with certainty

Creating new courses of action because existing procedures are inadequate

Applying the same solution that was used during the previous occurrence

Rejecting all alternatives that differ from the current procedure

Avoiding discussion with people who understand the problem

The manager chooses the most promising course of action from the alternatives

The manager first recognizes that a problem or opportunity exists

The manager assigns people and resources to carry out the decision

The manager determines whether the results met expectations

Its fit with the organization's goals and objectives

Its ability to avoid all managerial discussion

The personal preference of the manager regardless of organizational goals

The fact that it requires no monitoring after implementation

Creates the greatest expected benefit with the least risk and uncertainty

Requires the most resources regardless of its expected results

Eliminates the possibility of any negative outcome

Is selected before any feasible alternatives are identified

Turning the selected course of action into coordinated organizational action

Generating additional alternatives without choosing one

Determining whether the organization met its established goals

Establishing that a decision requirement exists

Managerial, administrative, and persuasive abilities

Only financial calculation abilities

Only legal research abilities

No managerial abilities, because implementation is automatic

Communication, motivation, and leadership

Certainty, ambiguity, and conflict

Diagnosis, development, and selection

Anchoring, framing, and overconfidence

To determine how well the alternative was implemented and whether it succeeded

To avoid using the chosen alternative again

To create the original set of alternatives

To decide which goals the organization should pursue before any action

Managers must keep monitoring results and use information to improve action

Managers must continuously reopen the original decision without any evaluation

Feedback occurs only after every future alternative has been implemented

Continuous feedback replaces the need for implementation

Sequential implementation allows the organization to learn from each attempt before proceeding

It eliminates the need to diagnose the underlying problem

It guarantees that each alternative will improve performance

It is required for all programmed decisions

Recognition notices that a decision is needed; diagnosis investigates the nature and causes of the situation

Recognition identifies causes; diagnosis selects the best alternative

Recognition implements a decision; diagnosis evaluates its results

Recognition and diagnosis are identical activities

Development creates possible courses of action; selection chooses among them

Development evaluates results; selection diagnoses causes

Development assigns resources; selection communicates the decision

Development occurs only after evaluation; selection occurs only after recognition

Selection determines the preferred alternative; implementation carries it out

Selection generates new options; implementation ranks them

Selection determines causes; implementation assigns resources

Selection assesses final performance; implementation creates alternatives

Implementation executes the decision; evaluation judges the execution and its results

Implementation selects an alternative; evaluation generates alternatives

Implementation diagnoses causes; evaluation recognizes the problem

Implementation and evaluation are the same activity

Feedback from evaluating one decision can reveal new problems and opportunities

Every organization repeats exactly the same decision without changes

The six steps occur simultaneously and have no sequence

Implementation must always return directly to development without evaluation

Recognition of a decision requirement

Development of alternatives

Selection of the desired alternative

Evaluation and feedback

Diagnosis and analysis of causes

Selection of the desired alternative

Implementation of the chosen alternative

Evaluation and feedback

Development of alternatives

Diagnosis and analysis of causes

Evaluation and feedback

Recognition of a decision requirement

Selection of the desired alternative

Recognition of a decision requirement

Diagnosis and analysis of causes

Evaluation and feedback

Implementation

Diagnosis

Development of alternatives

Evaluation and feedback

Evaluation and feedback

Recognition of a decision requirement

Development of alternatives

Selection of the desired alternative

Evaluation and feedback feeding into further implementation

Development of alternatives without any prior implementation

Programmed decision making based on a recurring rule

Political negotiation among coalition members

Anchoring bias

Status quo bias

Overconfidence bias

Satisficing

Escalation of commitment

Confirmation bias

Framing bias

Bounded rationality

Confirmation bias

Anchoring bias

Status quo bias

Programmed decision making

Status quo bias

Overconfidence bias

Anchoring bias

Political model

Choosing differently depending on whether the identical issue is presented as a gain or a loss

Accepting the first proposal that meets minimum criteria

Using an existing policy for a recurring procedure

Consulting colleagues before making a complex choice

A manager predicts a project will succeed with virtually no possibility of delay

A manager accepts a solution because it meets the minimum acceptance standard

A manager continues using a procedure because it has always worked in the past

A manager seeks a second estimate before accepting a consultant's forecast

Anchoring bias

Status quo bias

Framing bias

Certainty

Escalation of commitment

Confirmation bias

Bounded rationality

Programmed decision

Confirmation bias

Anchoring bias

Problem framing

Administrative satisficing

Status quo bias

Anchoring bias

Overconfidence bias

Political negotiation

Problem-framing bias

Status quo bias

Anchoring bias

Escalation of commitment

Overconfidence bias

Confirmation bias

Anchoring bias

Satisficing

Ask people to make independent estimates before hearing others' initial figures

Let the first speaker set the range of acceptable answers

Ask only for reasons that support the initial estimate

Avoid discussing estimates altogether

Actively seek credible evidence that could disprove the favored conclusion

Review only evidence that supports the preferred conclusion

Repeat the original conclusion more often to increase familiarity

Avoid asking colleagues who disagree with the favored view

Require teams to compare the current process with realistic alternatives before choosing

Give the current process automatic priority because it is already operating

Focus discussion on the disadvantages of changing the process

Treat the current process as the benchmark without questioning it

Restate the proposal in neutral language and in both gain and loss frames, then compare reactions

Use only the frame that produces the preferred answer

Attach greater importance to the first numerical estimate presented

Preserve the same frame so stakeholders remain consistent

Use ranges, alternative scenarios, and outside perspectives when forecasting outcomes

Present the most optimistic forecast without qualification

Rely only on the manager's personal experience

Remove all alternative forecasts from the analysis

To help managers understand and improve their habitual decision-making style

To prescribe one universally superior decision style for every situation

To eliminate intuition from managerial decisions

To replace feedback with a permanent personal label

Intuition relies on rapid experience-based judgment, while analysis uses deliberate reasoning and organized comparison

Intuition requires extended data collection, while analysis ignores information

Intuition and analysis are identical because both are purely emotional

Intuition applies only to programmed decisions, while analysis applies only to nonprogrammed decisions

A complex, high-stakes investment decision with sufficient time and reliable data

A familiar, low-risk routine with an experienced manager

A recurring scheduling choice governed by a clear policy

An immediate reaction requiring no time for reflection

A familiar, repetitive, low-risk situation in which the manager has relevant experience

A highly complex investment with many unknown variables

A strategic choice with sharply conflicting stakeholder goals

A decision with abundant reliable data and ample time for analysis

Adapt the approach by using more analysis, intuition, consultation, or other methods as needed

Continue using the preferred style regardless of the circumstances

Reject all decision-making frameworks as irrelevant

Delegate every complex decision to colleagues

It helps managers anticipate habitual errors and choose a method suited to the situation

It guarantees that every decision will produce positive results

It eliminates the need for managerial judgment

It proves that managers using the same style will make identical decisions

Brainstorming

Devil's advocacy

Delphi technique

Nominal group technique

Devil's advocacy

Brainstorming

Dialectical inquiry

Delphi technique

Members first generate ideas independently and then discuss and rank them in a structured way

The most senior member speaks first and controls the final decision

Experts exchange anonymous questionnaires over several rounds

One person is assigned to criticize every proposal

Delphi technique

Brainstorming

Nominal group technique

Programmed decision making

Dialectical inquiry

Delphi technique

Nominal group technique

Programmed decision

Nominal group technique

Unstructured brainstorming with no rules

Managerial intuition alone

A programmed purchasing rule

A nonprogrammed decision, a political model, and the full six-step process through feedback

A programmed decision, a classical model, and selection without implementation

A programmed decision, an administrative model, and diagnosis without alternatives

A nonprogrammed decision, a certainty model, and evaluation without goal recognition