Essentials of Contemporary Management Gareth Jones 8e - Test Bank Instant Download - Complete Test Bank With Answers Sample Questions Are Posted Below Essentials of Contemporary Management, 8e (Jones) Chapter 5 Decision Making, Learning, Creativity, and Entrepreneurship 1) The classical decision-making model assumes that managers have all of the information …
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Essentials of Contemporary Management Gareth Jones 8e – Test Bank
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Sample Questions Are Posted Below
Essentials of Contemporary Management, 8e (Jones)
Chapter 5 Decision Making, Learning, Creativity, and Entrepreneurship
1) The classical decision-making model assumes that managers have all of the information they need in order to make the optimum decision.
Answer: TRUE
Explanation: The classical model assumes managers have access to all the information they need to make the optimum decision, which is the most appropriate decision possible in light of what they believe to be the most desirable consequences for the organization.
Difficulty: 1 Easy
Topic: Classical Decision-Making Model
Learning Objective: 05-01 Understand the nature of managerial decision making, differentiate between programmed and nonprogrammed decisions, and explain why nonprogrammed decision making is a complex, uncertain process.
Bloom’s: Remember
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
2) When a manager chooses an acceptable alternative instead of the optimum alternative, we say that a satisficing decision has occurred.
Answer: TRUE
Explanation: When managers satisfice, they search for and choose acceptable, or satisfactory, ways to respond to problems and opportunities rather than trying to make the optimal decision.
Difficulty: 1 Easy
Topic: Satisficing
Learning Objective: 05-01 Understand the nature of managerial decision making, differentiate between programmed and nonprogrammed decisions, and explain why nonprogrammed decision making is a complex, uncertain process.
Bloom’s: Remember
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
3) The first step in decision making that a manager needs to take is generate a set of feasible alternative courses of action in response to the opportunity or threat.
Answer: FALSE
Explanation: The first step in the decision-making process is to recognize the need for a decision.
Difficulty: 1 Easy
Topic: Non-Programmed Decisions
Learning Objective: 05-02 Describe the six steps managers should take to make the best decisions.
Bloom’s: Remember
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
4) While assessing the practicality of alternatives, managers must decide whether they have the capabilities and resources required to implement the alternative, and they must be sure that the alternative will not threaten the attainment of other organizational goals.
Answer: TRUE
Explanation: While assessing the practicality of alternatives, managers must decide whether they have the capabilities and resources required to implement the alternative, and they must be sure that the alternative will not threaten the attainment of other organizational goals.
Difficulty: 1 Easy
Topic: Non-Programmed Decisions
Learning Objective: 05-02 Describe the six steps managers should take to make the best decisions.
Bloom’s: Remember
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
5) In the decision-making process, to compare what actually happened to what was expected to happen as a result of the decision is a procedure of choosing among alternatives.
Answer: FALSE
Explanation: To compare what actually happened to what was expected to happen as a result of the decision is a procedure of learning from feedback.
Difficulty: 1 Easy
Topic: Non-Programmed Decisions
Learning Objective: 05-02 Describe the six steps managers should take to make the best decisions.
Bloom’s: Remember
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
6) Rationalization is a critical analysis of a preferred alternative to ascertain its strengths and weaknesses before it is implemented.
Answer: FALSE
Explanation: Devil’s advocacy is a critical analysis of a preferred alternative to ascertain its strengths and weaknesses before it is implemented.
Difficulty: 1 Easy
Topic: Devil’s Advocacy
Learning Objective: 05-03 Identify the advantages and disadvantages of group decision making, and describe techniques that can improve it.
Bloom’s: Remember
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
7) When a member of a group challenges the decision that is being made by the group in an attempt to make the group carefully consider the pros and cons of a particular alternative, this member is playing the role of the devil’s advocate.
Answer: TRUE
Explanation: Typically one member of the decision-making group plays the role of devil’s advocate. The devil’s advocate critiques and challenges the way the group evaluated alternatives and chose one over the others. The purpose of devil’s advocacy is to identify all the reasons that might make the preferred alternative unacceptable after all.
Difficulty: 1 Easy
Topic: Devil’s Advocacy
Learning Objective: 05-03 Identify the advantages and disadvantages of group decision making, and describe techniques that can improve it.
Bloom’s: Remember
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
8) The ability of a decision maker to discover novel ideas that lead to feasible alternatives in decision making is known as creativity.
Answer: TRUE
Explanation: The ability of a decision maker to discover novel ideas that lead to feasible alternatives in decision making is known as creativity.
Difficulty: 1 Easy
Topic: Creativity
Learning Objective: 05-04 Explain the role that organizational learning and creativity play in helping managers to improve their decisions.
Bloom’s: Remember
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
9) The nominal group technique is especially useful when an issue is not controversial and when different managers are expected to champion a similar course of action.
Answer: FALSE
Explanation: The nominal group technique is especially useful when an issue is controversial and when different managers might be expected to champion different courses of action.
Difficulty: 1 Easy
Topic: Learning Organization
Learning Objective: 05-04 Explain the role that organizational learning and creativity play in helping managers to improve their decisions.
Bloom’s: Remember
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
10) Individuals who believe that they are responsible for what happens to them and that their own actions determine important outcomes are said to have an external locus of control.
Answer: FALSE
Explanation: Entrepreneurs are likely to have an internal locus of control, believing that they are responsible for what happens to them and that their own actions determine important outcomes such as the success or failure of a new business.
Difficulty: 1 Easy
Topic: Entrepreneurship
Learning Objective: 05-05 Describe how managers can encourage and promote entrepreneurship to create a learning organization, and differentiate between entrepreneurs and intrapreneurs.
Bloom’s: Remember
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
11) Decisions that have been made many times in the past and for which managers have rules and guidelines about how to make similar decisions in the future are known as ________ decisions.
Answer: C
Explanation: Programmed decision making is a routine, virtually automatic process. Programmed decisions are decisions that have been made so many times in the past that managers have developed rules or guidelines to be applied when certain situations inevitably occur.
Difficulty: 1 Easy
Topic: Programmed Decisions
Learning Objective: 05-01 Understand the nature of managerial decision making, differentiate between programmed and nonprogrammed decisions, and explain why nonprogrammed decision making is a complex, uncertain process.
Bloom’s: Remember
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
12) When an organization’s accounting department decides to send out a bill to a new customer, this represents a(n) ________ decision.
Answer: A
Explanation: Programmed decision making is a routine, virtually automatic process. Programmed decisions are decisions that have been made so many times in the past that managers have developed rules or guidelines to be applied when certain situations inevitably occur.
Difficulty: 2 Medium
Topic: Programmed Decisions
Learning Objective: 05-01 Understand the nature of managerial decision making, differentiate between programmed and nonprogrammed decisions, and explain why nonprogrammed decision making is a complex, uncertain process.
Bloom’s: Understand
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
13) Regina, a manager, orders raw materials when the raw materials inventory reaches a certain point. This is an example of which type of decision?
Answer: D
Explanation: Programmed decision making is a routine, virtually automatic process. Programmed decisions are decisions that have been made so many times in the past that managers have developed rules or guidelines to be applied when certain situations inevitably occur.
Difficulty: 2 Medium
Topic: Programmed Decisions
Learning Objective: 05-01 Understand the nature of managerial decision making, differentiate between programmed and nonprogrammed decisions, and explain why nonprogrammed decision making is a complex, uncertain process.
Bloom’s: Understand
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
14) The manager of a charity asks the board of directors for permission to hire temporary help when the regular secretary goes on vacation. This is an example of which type of decision?
Answer: A
Explanation: Programmed decision making is a routine, virtually automatic process. Programmed decisions are decisions that have been made so many times in the past that managers have developed rules or guidelines to be applied when certain situations inevitably occur. This is a programmed decision because a rule has been established to be applied when a certain situation occurs.
Difficulty: 2 Medium
Topic: Programmed Decisions
Learning Objective: 05-01 Understand the nature of managerial decision making, differentiate between programmed and nonprogrammed decisions, and explain why nonprogrammed decision making is a complex, uncertain process.
Bloom’s: Understand
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
15) Martin, a plant foreman, hires an additional worker whenever overtime hours for the previous month increase by more than 25 percent. This is an example of which type of decision?
Answer: D
Explanation: Programmed decision making is a routine, virtually automatic process. Programmed decisions are decisions that have been made so many times in the past that managers have developed rules or guidelines to be applied when certain situations inevitably occur.
Difficulty: 2 Medium
Topic: Programmed Decisions
Learning Objective: 05-01 Understand the nature of managerial decision making, differentiate between programmed and nonprogrammed decisions, and explain why nonprogrammed decision making is a complex, uncertain process.
Bloom’s: Understand
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
16) Nikola, the accountant for a small firm, always pays the real estate taxes seven days before they are due. This represents which type of decision?
Answer: B
Explanation: Programmed decision making is a routine, virtually automatic process. Programmed decisions are decisions that have been made so many times in the past that managers have developed rules or guidelines to be applied when certain situations inevitably occur. This is a programmed decision because a rule has been established to be applied when a certain situation occurs.
Difficulty: 2 Medium
Topic: Programmed Decisions
Learning Objective: 05-01 Understand the nature of managerial decision making, differentiate between programmed and nonprogrammed decisions, and explain why nonprogrammed decision making is a complex, uncertain process.
Bloom’s: Understand
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
17) What do managers do to regulate routine activities?
Answer: B
Explanation: Managers develop rules and guidelines to regulate all routine organizational activities.
Difficulty: 1 Easy
Topic: Programmed Decisions
Learning Objective: 05-01 Understand the nature of managerial decision making, differentiate between programmed and nonprogrammed decisions, and explain why nonprogrammed decision making is a complex, uncertain process.
Bloom’s: Remember
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
18) An organization’s finance department decides to go to the company’s usual bank and take out a loan whenever the company’s revenues for the month are projected to be less than its expenses. What type of decision does this represent?
Answer: C
Explanation: Programmed decision making occurs when managers have the information they need to create rules that will guide decision making.
Difficulty: 2 Medium
Topic: Programmed Decisions
Learning Objective: 05-01 Understand the nature of managerial decision making, differentiate between programmed and nonprogrammed decisions, and explain why nonprogrammed decision making is a complex, uncertain process.
Bloom’s: Apply; Understand
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
19) You are a manager who wants to give some of your programmed decisions to your assistant to leave you more time to devote to nonprogrammed decisions. Considering this, which of the following actions would you delegate to your assistant?
Answer: D
Explanation: Examples of programmed decisions include deciding how much inventory to hold, when to pay bills, when to bill customers, and when to order materials and supplies. Therefore, you would delegate when to bill customers to your assistant. All the other distracters are examples of nonprogrammed decisions.
Difficulty: 2 Medium
Topic: Programmed Decisions
Learning Objective: 05-01 Understand the nature of managerial decision making, differentiate between programmed and nonprogrammed decisions, and explain why nonprogrammed decision making is a complex, uncertain process.
Bloom’s: Apply
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
20) Nonroutine decisions made in response to novel situations in business are known as ________ decisions.
Answer: D
Explanation: Nonprogrammed decisions are made in response to unusual or novel opportunities and threats. Nonprogrammed decision making occurs when there are no ready-made decision rules that managers can apply to a situation.
Difficulty: 1 Easy
Topic: Non-Programmed Decisions
Learning Objective: 05-01 Understand the nature of managerial decision making, differentiate between programmed and nonprogrammed decisions, and explain why nonprogrammed decision making is a complex, uncertain process.
Bloom’s: Remember
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
21) Apex, Ltd., is trying to decide whether or not to launch a new product nationally. This represents a(n) ________ decision.
Answer: D
Explanation: Nonprogrammed decisions are made in response to unusual or novel opportunities and threats. Examples of nonprogrammed decision making include decisions to invest in a new technology, develop a new kind of product, launch a new promotional campaign, enter a new market, expand internationally, or start a new business.
Difficulty: 2 Medium
Topic: Non-Programmed Decisions
Learning Objective: 05-01 Understand the nature of managerial decision making, differentiate between programmed and nonprogrammed decisions, and explain why nonprogrammed decision making is a complex, uncertain process.
Bloom’s: Understand
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
22) Star, Inc., is attempting to decide whether or not it should change its manufacturing process to a new type of technology. This represents a(n) ________ decision.
Answer: B
Explanation: Nonprogrammed decisions are made in response to unusual or novel opportunities and threats. Examples of nonprogrammed decision making include decisions to invest in a new technology, develop a new kind of product, launch a new promotional campaign, enter a new market, expand internationally, or start a new business.
Difficulty: 2 Medium
Topic: Non-Programmed Decisions
Learning Objective: 05-01 Understand the nature of managerial decision making, differentiate between programmed and nonprogrammed decisions, and explain why nonprogrammed decision making is a complex, uncertain process.
Bloom’s: Understand
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
23) Go-Getter, Co., is attempting to decide whether or not to launch a new $10 million advertising campaign for a product whose sales have been lagging well below its projected sales. This represents which type of decision for the organization?
Answer: C
Explanation: In nonprogrammed decision making, rules do not exist because the situation is unexpected or uncertain and managers lack the information they would need to develop rules to cover it. Examples of nonprogrammed decision making include decisions to invest in a new technology, develop a new kind of product, launch a new promotional campaign, enter a new market, expand internationally, or start a new business.
Difficulty: 2 Medium
Topic: Non-Programmed Decisions
Learning Objective: 05-01 Understand the nature of managerial decision making, differentiate between programmed and nonprogrammed decisions, and explain why nonprogrammed decision making is a complex, uncertain process.
Bloom’s: Understand
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
24) An organization that has been focusing on a target market located in the eastern part of the United States is attempting to decide whether to expand its sales to the West Coast of the United States. Which of the following types of decisions is being made by the organization?
Answer: B
Explanation: In nonprogrammed decision making, rules do not exist because the situation is unexpected or uncertain and managers lack the information they would need to develop rules to cover it. Examples of nonprogrammed decision making include decisions to invest in a new technology, develop a new kind of product, launch a new promotional campaign, enter a new market, expand internationally, or start a new business.
Difficulty: 2 Medium
Topic: Non-Programmed Decisions
Learning Objective: 05-01 Understand the nature of managerial decision making, differentiate between programmed and nonprogrammed decisions, and explain why nonprogrammed decision making is a complex, uncertain process.
Bloom’s: Understand
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
25) When fire chiefs manage firefighters battling hazardous, out-of-control fires, they frequently have to depend on their professional instincts to make on-the-spot decisions that will protect the lives of the firefighters, save the lives of others, control the fires, and preserve property—decisions made in emergency situations involving high ambiguity and rapidly changing conditions. This is an example of which of the following types of decision making?
Answer: D
Explanation: Managers may rely on their intuition—feelings, beliefs, and hunches that come readily to mind, require little effort and information gathering, and result in on-the-spot decisions. Intuitive decisions are made when managers have to make nonprogrammed decisions.
Difficulty: 2 Medium
Topic: Non-Programmed Decisions
Learning Objective: 05-01 Understand the nature of managerial decision making, differentiate between programmed and nonprogrammed decisions, and explain why nonprogrammed decision making is a complex, uncertain process.
Bloom’s: Understand
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
26) The classical model of decision making specifies how decisions should be made by managers; this is a way of saying that this model of decision making is
Answer: B
Explanation: The classical model is prescriptive, which means that it specifies how decisions should be made. Managers using the classical model make a series of simplifying assumptions about the nature of the decision-making process.
Difficulty: 1 Easy
Topic: Classical Decision-Making Model
Learning Objective: 05-01 Understand the nature of managerial decision making, differentiate between programmed and nonprogrammed decisions, and explain why nonprogrammed decision making is a complex, uncertain process.
Bloom’s: Remember
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
27) The classical model of decision making assumes that
Answer: C
Explanation: The classical model assumes managers have access to all the information they need to make the optimum decision, which is the most appropriate decision possible in light of what they believe to be the most desirable consequences for the organization.
Difficulty: 2 Medium
Topic: Classical Decision-Making Model
Learning Objective: 05-01 Understand the nature of managerial decision making, differentiate between programmed and nonprogrammed decisions, and explain why nonprogrammed decision making is a complex, uncertain process.
Bloom’s: Understand
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
28) The most appropriate decision in light of what managers believe to be the most desirable consequences for the organization is called the ________ decision.
Answer: B
Explanation: The classical model assumes managers have access to all the information they need to make the optimum decision, which is the most appropriate decision possible in light of what they believe to be the most desirable consequences for the organization.
Difficulty: 1 Easy
Topic: Classical Decision-Making Model
Learning Objective: 05-01 Understand the nature of managerial decision making, differentiate between programmed and nonprogrammed decisions, and explain why nonprogrammed decision making is a complex, uncertain process.
Bloom’s: Remember
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
29) Which of the following explains the reasons for the inherently uncertain and risky nature of decision making and the making of satisfactory rather than optimum decisions by managers?
Answer: B
Explanation: The administrative model is an approach to decision making that explains why decision making is inherently uncertain and risky and why managers usually make satisfactory rather than optimum decisions.
Difficulty: 1 Easy
Topic: Classical Decision-Making Model
Learning Objective: 05-01 Understand the nature of managerial decision making, differentiate between programmed and nonprogrammed decisions, and explain why nonprogrammed decision making is a complex, uncertain process.
Bloom’s: Remember
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
30) In the administrative model of decision making, when the number of possible alternatives to a decision is so large that the manager cannot possibly evaluate all of them before making a decision, which of the following has occurred?
Answer: B
Explanation: March and Simon coined the term “bounded rationality” to describe the situation in which the number of alternatives a manager must identify is so great and the amount of information so vast that it is difficult for the manager to even come close to evaluating it all before making a decision.
Difficulty: 1 Easy
Topic: Bounded Rationality
Learning Objective: 05-01 Understand the nature of managerial decision making, differentiate between programmed and nonprogrammed decisions, and explain why nonprogrammed decision making is a complex, uncertain process.
Bloom’s: Remember
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
31) Managers in the field of biotechnology know that new drugs have a 10 percent chance of passing advanced clinical trials and always assign probabilities to the results of clinical trials. This is an example of
Answer: A
Explanation: Risk is present when managers know the possible outcomes of a particular course of action and can assign probabilities to them.
Difficulty: 2 Medium
Topic: Classical Decision-Making Model
Learning Objective: 05-01 Understand the nature of managerial decision making, differentiate between programmed and nonprogrammed decisions, and explain why nonprogrammed decision making is a complex, uncertain process.
Bloom’s: Understand
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
32) When managers know the possible outcomes of a decision and can assign probabilities to each of these outcomes in terms of their likelihood of occurrence in the future, this is known as
Answer: C
Explanation: Risk is present when managers know the possible outcomes of a particular course of action and can assign probabilities to them.
Difficulty: 1 Easy
Topic: Classical Decision-Making Model
Learning Objective: 05-01 Understand the nature of managerial decision making, differentiate between programmed and nonprogrammed decisions, and explain why nonprogrammed decision making is a complex, uncertain process.
Bloom’s: Remember
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
33) A software firm is considering introducing a new product on the market. However, managers cannot estimate the probability of success for the new product. Which of the following best describes the situation?
Answer: B
Explanation: When uncertainty exists, the probabilities of alternative outcomes cannot be determined and future outcomes are unknown. Managers are working blind. Because the probability of a given outcome occurring is not known, managers have little information to use in making a decision.
Difficulty: 2 Medium
Topic: Classical Decision-Making Model
Learning Objective: 05-01 Understand the nature of managerial decision making, differentiate between programmed and nonprogrammed decisions, and explain why nonprogrammed decision making is a complex, uncertain process.
Bloom’s: Understand
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
34) When managers cannot assign probabilities of future occurrence to possible alternatives with a decision, this is known as
Answer: D
Explanation: When uncertainty exists, the probabilities of alternative outcomes cannot be determined and future outcomes are unknown. Managers are working blind. Because the probability of a given outcome occurring is not known, managers have little information to use in making a decision.
Difficulty: 1 Easy
Topic: Classical Decision-Making Model
Learning Objective: 05-01 Understand the nature of managerial decision making, differentiate between programmed and nonprogrammed decisions, and explain why nonprogrammed decision making is a complex, uncertain process.
Bloom’s: Remember
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
35) When the meaning of the information available to a manager is unclear and can be interpreted in several ways, the information is
Answer: B
Explanation: A reason as to why information is incomplete is that much of the information managers have at their disposal is ambiguous information. Its meaning is not clear; it can be interpreted in multiple and often conflicting ways. In a similar fashion, managers often interpret the same piece of information differently and make decisions based on their own interpretations.
Difficulty: 1 Easy
Topic: Classical Decision-Making Model
Learning Objective: 05-01 Understand the nature of managerial decision making, differentiate between programmed and nonprogrammed decisions, and explain why nonprogrammed decision making is a complex, uncertain process.
Bloom’s: Remember
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
36) A manager considers a limited sample of the potential alternative solutions for a problem and selects one that is acceptable instead of attempting to select the optimum solution. This type of decision is called
Answer: D
Explanation: Satisficing is exploring a limited sample of all potential alternatives. When managers satisfice, they search for and choose acceptable, or satisfactory, ways to respond to problems and opportunities rather than trying to make the optimal decision.
Difficulty: 2 Medium
Topic: Satisficing
Learning Objective: 05-01 Understand the nature of managerial decision making, differentiate between programmed and nonprogrammed decisions, and explain why nonprogrammed decision making is a complex, uncertain process.
Bloom’s: Understand
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
37) You are a manager in an organization that needs to advertise a product. To do this, you decide to use satisficing. Considering this, which of the following actions would you take?
Answer: C
Explanation: When managers satisfice, they consider only a limited number of alternatives, and make an acceptable choice among them, rather than considering every possible alternative. As a result, you would ask three advertising agencies to pitch a proposal instead of all the agencies in the area. When managers satisfice, they search for and choose acceptable, or satisfactory, ways to respond to problems and opportunities rather than trying to make the optimal decision.
Difficulty: 2 Medium
Topic: Satisficing
Learning Objective: 05-01 Understand the nature of managerial decision making, differentiate between programmed and nonprogrammed decisions, and explain why nonprogrammed decision making is a complex, uncertain process.
Bloom’s: Apply
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
38) Instead of calling a hundred possible windshield suppliers, the purchasing manager for Telsa Motor Co. decides to call three suppliers of automobile windshields for a bid on an order for 1,000 windshields for a new car. What type of decision does this represent?
Answer: C
Explanation: When managers satisfice, they consider only a limited number of alternatives, and make an acceptable choice among them, rather than considering every possible alternative. When managers satisfice, they search for and choose acceptable, or satisfactory, ways to respond to problems and opportunities rather than trying to make the optimal decision.
Difficulty: 2 Medium
Topic: Satisficing
Learning Objective: 05-01 Understand the nature of managerial decision making, differentiate between programmed and nonprogrammed decisions, and explain why nonprogrammed decision making is a complex, uncertain process.
Bloom’s: Understand
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
39) Marco is considering opening a theater in a mid-size city. However, before he does this, he wants to lower the risk of such an endeavor. Many theaters have opened before but have failed because of financial difficulties. Marco has some experience as an actor and as a stage manager, but this will be his first real foray into the business side of things. To best increase his chances of achieving his goal, Marco should
Answer: B
Explanation: Because Marco’s experience is limited, it is probably not a good idea for him to rely on his intuition. Instead, a reasoned judgment will give him the information he needs to make an informed decision. Reasoned judgments are decisions that require time and effort and result from careful information gathering, generation of alternatives, and evaluation of alternatives. By conducting a survey, evaluating other cities as options, and searching for a good location, Marco would be making a reasoned judgment.
Difficulty: 2 Medium
Topic: Decision Making Process
Learning Objective: 05-01 Understand the nature of managerial decision making, differentiate between programmed and nonprogrammed decisions, and explain why nonprogrammed decision making is a complex, uncertain process.
Bloom’s: Apply
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
40) To use a programmed decision in dealing with occasional company overspending, a manager would
Answer: C
Explanation: Programmed decision making is a routine, virtually automatic process. If a company occasionally overspends, establishes procedures to take when this happen would be a programmed decision.
Difficulty: 2 Medium
Topic: Programmed Decisions
Learning Objective: 05-01 Understand the nature of managerial decision making, differentiate between programmed and nonprogrammed decisions, and explain why nonprogrammed decision making is a complex, uncertain process.
Bloom’s: Apply
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
41) Based on the work of March and Simon’s administrative model of decision making, the first step in the managerial decision-making process is to
Answer: D
Explanation: The first step in the decision-making process is to recognize the need for a decision.
Difficulty: 1 Easy
Topic: Non-Programmed Decisions
Learning Objective: 05-02 Describe the six steps managers should take to make the best decisions.
Bloom’s: Remember
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
42) Which step of the decision-making process requires managers to be sure all the information available is brought to bear on the problem or issue at hand while ranking the alternatives?
Answer: C
Explanation: Choose among alternatives is the fourth step of the decision-making process. Once the set of alternative solutions has been carefully evaluated, the next task is to rank the various alternatives and make a decision. When ranking alternatives, managers must be sure all the information available is brought to bear on the problem or issue at hand.
Difficulty: 2 Medium
Topic: Non-Programmed Decisions
Learning Objective: 05-02 Describe the six steps managers should take to make the best decisions.
Bloom’s: Understand
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
43) Koki, a production manager, was engaged in the development of a core component of a machine. He realized that the component would not be ready for QC testing as per the fixed deadline and suggested allotting two more weeks for its complete development or sending only a part of it for testing in the first cycle. Which two decision-making steps does this represent?
Answer: C
Explanation: Having recognized the need to make a decision, a manager must generate a set of feasible alternative courses of action to take in response to the opportunity or threat.
Difficulty: 2 Medium
Topic: Non-Programmed Decisions
Learning Objective: 05-02 Describe the six steps managers should take to make the best decisions.
Bloom’s: Understand
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
44) Ayaru, a marketing manager, wants to budget the advertising for a new product launch. She is trying to determine the amount of money that her company can afford to spend on advertising this new product. In the context of decision-making, which of the following criteria of alternative courses of action is Ayaru implementing?
Answer: C
Explanation: Managers must decide whether the alternatives are economically feasible—that is, whether they can be accomplished given the organization’s performance goals.
Difficulty: 2 Medium
Topic: Non-Programmed Decisions
Learning Objective: 05-02 Describe the six steps managers should take to make the best decisions.
Bloom’s: Understand
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
45) When managers decide that they have the capabilities and resources required to implement an alternative, and they are sure that the alternative will not threaten the attainment of other organizational goals, they are focusing on which of the following criteria of alternative courses of action?
Answer: D
Explanation: Managers must decide whether they have the capabilities and resources required to implement the alternative, and they must be sure the alternative will not threaten the attainment of other organizational goals. At first glance an alternative might seem economically superior to other alternatives; but if managers realize it is likely to threaten other important projects, they might decide it is not practical after all.
Difficulty: 2 Medium
Topic: Non-Programmed Decisions
Learning Objective: 05-02 Describe the six steps managers should take to make the best decisions.
Bloom’s: Understand
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
46) Esteban, a manager, performs a financial analysis of several investment alternatives in order to determine which alternative is most likely to impact the organization’s profitability. Esteban is focusing on
Answer: C
Explanation: Managers must decide whether the alternatives are economically feasible—that is, whether they can be accomplished given the organization’s performance goals.
Difficulty: 2 Medium
Topic: Non-Programmed Decisions
Learning Objective: 05-02 Describe the six steps managers should take to make the best decisions.
Bloom’s: Understand
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
47) Briana, a manager, is attempting to determine whether she has both the capability and the resources to produce one of several possible new products. In the context of decision making, on which of the following criteria of alternative courses of action is Briana focusing?
Answer: A
Explanation: While focusing on practicality, managers must decide whether they have the capabilities and resources required to implement the alternative, and they must be sure that the alternative will not threaten the attainment of other organizational goals.
Difficulty: 2 Medium
Topic: Non-Programmed Decisions
Learning Objective: 05-02 Describe the six steps managers should take to make the best decisions.
Bloom’s: Understand
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
48) You are a manager assessing possible alternatives for the solution of a problem. To do this, you have to determine the net financial payoff of each alternative. Which of the following criteria of decision making do you have to implement to accomplish this?
Answer: A
Explanation: While focusing on economic feasibility, managers perform a cost-benefit analysis of the various alternatives to determine which one will have the best net financial payoff. Managers must decide whether the alternatives are economically feasible.
Difficulty: 2 Medium
Topic: Non-Programmed Decisions
Learning Objective: 05-02 Describe the six steps managers should take to make the best decisions.
Bloom’s: Apply
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
49) Stojan, a plant manager, wants to initiate a diversity training program in his plant. He is considering whether his department has enough extra people to cover for the time his employees will be engaged in the classes. Which of the following criteria of decision making is Stojan implementing?
Answer: B
Explanation: While focusing on practicality, managers must decide whether they have the capabilities and resources required to implement the alternative and they must be sure the alternative will not threaten the attainment of other organizational goals.
Difficulty: 2 Medium
Topic: Non-Programmed Decisions
Learning Objective: 05-02 Describe the six steps managers should take to make the best decisions.
Bloom’s: Apply
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
50) You are a manager assessing possible alternatives for the solution of a quality problem in his department. As part of this process, you want to determine if a possible alternative will threaten other company projects. To accomplish this, which of the following criteria of decision-making will you implement?
Answer: B
Explanation: While focusing on practicality, managers must decide whether they have the capabilities and resources required to implement the alternative, and they must be sure that the alternative will not threaten the attainment of other organizational goals.
Difficulty: 2 Medium
Topic: Non-Programmed Decisions
Learning Objective: 05-02 Describe the six steps managers should take to make the best decisions.
Bloom’s: Apply
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
51) The explosion of the space shuttle Challenger is an example of poor managerial decision making by the managers at NASA and Morton Thiokol, who considered and then downplayed the criterion of
Answer: A
Explanation: In this case, the desire of NASA and Morton Thiokol managers to demonstrate to the public the success of the U.S. space program in order to ensure future funding (economic feasibility) conflicted with the need to ensure the safety of the astronauts (ethicalness). Managers deemed the economic criterion more important and decided to launch the space shuttle even though there were unanswered questions about safety. Managers must ensure that a possible course of action is ethical and will not unnecessarily harm any stakeholder group.
Difficulty: 2 Medium
Topic: Non-Programmed Decisions
Learning Objective: 05-02 Describe the six steps managers should take to make the best decisions.
Bloom’s: Understand
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
52) KJ, Inc., has received a poor rating for one of its newly launched products from the customers. Joe, a top manager at KJ, Inc., wants to find out why this product performed poorly. To accomplish this, which of the following decision-making steps does Joe have to implement?
Answer: B
Explanation: The final step in the decision-making process is learning from feedback. Effective managers always conduct a retrospective analysis to see what they can learn from past successes or failures. To avoid the mistakes again, managers must establish a formal procedure with which they can learn from the results of past decisions.
Difficulty: 2 Medium
Topic: Non-Programmed Decisions
Learning Objective: 05-02 Describe the six steps managers should take to make the best decisions.
Bloom’s: Apply
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
53) With reference to the steps of decision-making process, which of the following is the last step in the managerial decision-making process?
Answer: B
Explanation: The final step in the decision-making process is learning from feedback. Managers who always strive to learn from past mistakes and successes are likely to continuously improve the decisions they make. A significant amount of learning can take place when the outcomes of decisions are evaluated, and this assessment can produce enormous benefits.
Difficulty: 1 Easy
Topic: Non-Programmed Decisions
Learning Objective: 05-02 Describe the six steps managers should take to make the best decisions.
Bloom’s: Remember
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
54) Kareem is the new owner of a major league baseball team. Over the last several years, the team has consistently had a losing record and, as a result, attendance is slumping. Kareem is currently evaluating potential solutions, including revamping the affiliated minor league team, moving the team to a new city, and hiring all new coaching staff. Kareem’s next step is to
Answer: B
Explanation: Once a decision has been made and an alternative has been selected, it must be implemented, and many subsequent and related decisions must be made. Revamping the minor league is implementing the chosen alternative.
Difficulty: 3 Hard
Topic: Non-Programmed Decisions
Learning Objective: 05-02 Describe the six steps managers should take to make the best decisions.
Bloom’s: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
55) To access the ethicalness of an alternative for a restaurant, the manager would
Answer: C
Explanation: When examining alternative courses of action, managers need to be clear about the potential effects of their decisions. Will the decision have an unethical effect in some way? Determining if a possible low-priced beef source used inhumane methods to slaughter livestock deals with the ethical issue of animal abuse.
Difficulty: 2 Medium
Topic: Non-Programmed Decisions
Learning Objective: 05-02 Describe the six steps managers should take to make the best decisions.
Bloom’s: Apply
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
56) The pattern of faulty and biased decision making that occurs in groups whose members strive for agreement at the expense of good decision making is called
Answer: B
Explanation: Groupthink is a pattern of faulty and biased decision making that occurs in groups whose members strive for agreement among themselves at the expense of accurately assessing information relevant to a decision.
Difficulty: 1 Easy
Topic: Groupthink
Learning Objective: 05-03 Identify the advantages and disadvantages of group decision making, and describe techniques that can improve it.
Bloom’s: Remember
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
57) The marketing managers of Compliant, Ltd., strive so hard to agree on an important decision to launch a product that they ignore information that a similar product already exists in the market and that the barriers to entry into the market are high. This refers to which of the following decision-making processes?
Answer: C
Explanation: Groupthink is a pattern of faulty and biased decision making that occurs in groups whose members strive for agreement among themselves at the expense of accurately assessing information relevant to a decision.
Difficulty: 2 Medium
Topic: Groupthink
Learning Objective: 05-03 Identify the advantages and disadvantages of group decision making, and describe techniques that can improve it.
Bloom’s: Understand
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
58) Why is group decision making considered beneficial?
Answer: C
Explanation: Group decision making allows managers to process more information and to correct one another’s errors. Groups often take much longer than individuals to make decisions. Getting two or more managers to agree to the same solution can be difficult. Group decision making can be undermined by biases.
Difficulty: 2 Medium
Topic: Groupthink
Learning Objective: 05-03 Identify the advantages and disadvantages of group decision making, and describe techniques that can improve it.
Bloom’s: Understand
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
59) A critical analysis of a preferred alternative to ascertain its strengths and weaknesses before it is implemented, with the purpose of identifying all the reasons that might make the preferred alternative unacceptable, is
Answer: B
Explanation: Devil’s advocacy is a critical analysis of a preferred alternative to ascertain its strengths and weaknesses before it is implemented. The purpose is to identify all the reasons that might make the preferred alternative unacceptable. In this way, decision makers can be made aware of the possible perils of recommended courses of action.
Difficulty: 1 Easy
Topic: Devil’s Advocacy
Learning Objective: 05-03 Identify the advantages and disadvantages of group decision making, and describe techniques that can improve it.
Bloom’s: Remember
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
60) Lila is a manager involved in group decision making with other managers. She wants to make sure that the group avoids groupthink. Which of the following actions should she take to ensure that the group makes the best possible decision?
Answer: B
Explanation: Devil’s advocacy is a critical analysis of a preferred alternative to ascertain its strengths and weaknesses before it is implemented. A member of the decision-making group plays the role of devil’s advocate and critiques and challenges the way the group evaluated alternatives and chose one over the others. The purpose is to identify all the reasons that might make the preferred alternative unacceptable. Decision makers can be made aware of the possible perils of recommended courses of action.
Difficulty: 2 Medium
Topic: Devil’s Advocacy
Learning Objective: 05-03 Identify the advantages and disadvantages of group decision making, and describe techniques that can improve it.
Bloom’s: Apply
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
61) Anja is taking part in a brainstorming group that is supposed to think of new storylines for films for a major studio. The studio wants creative stories that are different from previously produced films, but also marketable. However, Anja soon notices that members in the group tend to rely on old storylines, especially about superheroes, that seem like “safe” bets at the box office. Additionally, when one of them proposes an idea, the others almost invariably go along with it. What should Anja do in order to effectively counteract this dynamic?
Answer: A
Explanation: Devil’s advocacy is a critical analysis of a preferred alternative to ascertain its strengths and weaknesses before it is implemented. A member of the decision-making group plays the role of devil’s advocate and critiques and challenges the way the group evaluated alternatives and chose one over the others. By pointing out that many superhero films have recently failed at the box office and that audiences are looking for alternative stories that are not similar to video games Anja is identifying the reasons that make the preferred alternative unacceptable.
Difficulty: 3 Hard
Topic: Devil’s Advocacy
Learning Objective: 05-03 Identify the advantages and disadvantages of group decision making, and describe techniques that can improve it.
Bloom’s: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
62) To counteract groupthink on a merchandising team, a manager decides to brings in two
Answer: B
Explanation: To counteract groupthink, a manager often tries to enhance the diversity of a group, thereby bringing in different perspectives. The manager accomplishes this by bringing two coworkers of Mexican descent into a group that currently does not have any members of Latino descent.
Difficulty: 2 Medium
Topic: Diversity
Learning Objective: 05-03 Identify the advantages and disadvantages of group decision making, and describe techniques that can improve it.
Bloom’s: Apply
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
63) Managers can increase their ability to make nonprogrammed decisions that will allow them to adapt to, modify, and even drastically alter their task environments so that they can continually increase organizational performance through organizational
Answer: A
Explanation: Organizational learning is the process through which managers seek to improve employees’ desire and ability to understand and manage the organization and its task environment so employees can make decisions that continuously raise organizational effectiveness.
Difficulty: 1 Easy
Topic: Learning Organization
Learning Objective: 05-04 Explain the role that organizational learning and creativity play in helping managers to improve their decisions.
Bloom’s: Remember
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
64) In managerial decision making, the ability of a manager to discover novel ideas that lead to alternative courses of action for the organization to use for solving a particular problem is known as
Answer: D
Explanation: Creativity is the ability of a decision maker to discover original and novel ideas that lead to feasible alternative courses of action.
Difficulty: 1 Easy
Topic: Learning Organization
Learning Objective: 05-04 Explain the role that organizational learning and creativity play in helping managers to improve their decisions.
Bloom’s: Remember
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
65) At the heart of organizational learning is
Answer: D
Explanation: At the heart of organizational learning is creativity, which is the ability of a decision maker to discover original and novel ideas that lead to feasible alternative courses of action.
Difficulty: 1 Easy
Topic: Learning Organization
Learning Objective: 05-04 Explain the role that organizational learning and creativity play in helping managers to improve their decisions.
Bloom’s: Remember
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
66) To create a learning organization, managers must empower employees and allow them to experiment, create, and explore what they want through developing a sense of
Answer: A
Explanation: To develop a sense of personal mastery among employees, managers must empower employees and allow them to experiment and create and explore what they want.
Difficulty: 2 Medium
Topic: Learning Organization
Learning Objective: 05-04 Explain the role that organizational learning and creativity play in helping managers to improve their decisions.
Bloom’s: Understand
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
67) Jack, a manager, wants to promote creativity in his company. To do this, which of the following actions would he take?
Answer: A
Explanation: By allowing a subordinate to proceed on a work project even though he does not agree with how the subordinate wants to do the work, Jack is allowing the subordinate to experiment and explore, which promotes creativity.
Difficulty: 2 Medium
Topic: Learning Organization
Learning Objective: 05-04 Explain the role that organizational learning and creativity play in helping managers to improve their decisions.
Bloom’s: Apply
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
68) Fyodor, a manager of the research and development team of an organization, challenges his subordinates to “think outside the box” to improve the way the unit does its work. Fyodor is focusing on ________.
Answer: B
Explanation: Organizations need to encourage employees to develop and use complex mental models. Mental models are sophisticated ways of thinking that challenge employees to find new or better ways of performing a task to deepen their understanding of what is involved in a particular activity.
Difficulty: 2 Medium
Topic: Learning Organization
Learning Objective: 05-04 Explain the role that organizational learning and creativity play in helping managers to improve their decisions.
Bloom’s: Understand
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
69) A sales manager wants to promote a shared vision among his staff. Considering this, which of the following would he do?
Answer: D
Explanation: A shared vision is a common mental model that all organizational members use to frame problems or opportunities. In this situation, the manager is trying to create a common mental model that all members will use to treat customers.
Difficulty: 2 Medium
Topic: Learning Organization
Learning Objective: 05-04 Explain the role that organizational learning and creativity play in helping managers to improve their decisions.
Bloom’s: Apply
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
70) The idea that one level of learning affects other levels is part of the ________ principle of creating a learning organization.
Answer: A
Explanation: While focusing on systems thinking, managers must recognize the effects of one level of learning on another.
Difficulty: 1 Easy
Topic: Learning Organization
Learning Objective: 05-04 Explain the role that organizational learning and creativity play in helping managers to improve their decisions.
Bloom’s: Remember
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
71) A group of managers meets face-to-face and generates and debates a wide variety of alternatives from which to make a decision. What is this process of decision making called?
Answer: C
Explanation: Brainstorming is a group problem-solving technique in which managers meet face-to-face to generate and debate a wide variety of alternatives from which to make a decision.
Difficulty: 1 Easy
Topic: Learning Organization
Learning Objective: 05-04 Explain the role that organizational learning and creativity play in helping managers to improve their decisions.
Bloom’s: Remember
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
72) After one person shares an idea, the next thing that should happen in a brainstorming session is
Answer: B
Explanation: During brainstorming, after a manager describes in broad outline the problem the group is to address, group members share their ideas and generate alternative courses of action.
Difficulty: 2 Medium
Topic: Learning Organization
Learning Objective: 05-04 Explain the role that organizational learning and creativity play in helping managers to improve their decisions.
Bloom’s: Understand
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
73) The main reason for the loss of productivity in brainstorming is
Answer: C
Explanation: Brainstorming is very useful in some problem-solving situations, but sometimes individuals working alone can generate more alternatives. The main reason for the loss of productivity in brainstorming appears to be production blocking, which occurs because group members cannot always simultaneously make sense of all the alternatives being generated, think up additional alternatives, and remember what they were thinking.
Difficulty: 1 Easy
Topic: Learning Organization
Learning Objective: 05-04 Explain the role that organizational learning and creativity play in helping managers to improve their decisions.
Bloom’s: Remember
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
74) Which of the following is most likely to be a disadvantage of brainstorming in an organization?
Answer: D
Explanation: The main reason for the loss of productivity in brainstorming appears to be production blocking, which occurs because group members cannot always simultaneously make sense of all the alternatives being generated, think up additional alternatives, and remember what they were thinking.
Difficulty: 2 Medium
Topic: Learning Organization
Learning Objective: 05-04 Explain the role that organizational learning and creativity play in helping managers to improve their decisions.
Bloom’s: Understand
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
75) Sometimes in a brainstorming session, group members cannot simultaneously make sense of all the alternatives being generated, think up additional alternatives, or remember what they were thinking. This problem is known as
Answer: A
Explanation: Production blocking occurs because group members cannot always simultaneously make sense of all the alternatives being generated, think up additional alternatives, and remember what they were thinking.
Difficulty: 1 Easy
Topic: Learning Organization
Learning Objective: 05-04 Explain the role that organizational learning and creativity play in helping managers to improve their decisions.
Bloom’s: Remember
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
76) When an issue is controversial and when different managers might be expected to champion different courses of action, which of the following is the preferred technique for encouraging creativity?
Answer: D
Explanation: The nominal group technique is especially useful when an issue is controversial and when different managers might be expected to champion different courses of action.
Difficulty: 1 Easy
Topic: Learning Organization
Learning Objective: 05-04 Explain the role that organizational learning and creativity play in helping managers to improve their decisions.
Bloom’s: Remember
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
77) In a meeting, after hearing a member describe a problem to be addressed, all other members of the group first wrote down ideas and solutions. After this, everyone shared those suggestions without criticism. The group, one by one, clarified, critiqued, and then discussed the alternatives in the sequence in which they were first proposed. Finally, each member ranked all the alternatives, and the highest-ranking alternative was chosen. Which of the following decision-making techniques did the group implement?
Answer: D
Explanation: In the nominal group technique, the following procedure is used: (1) One manager outlines the problem to be addressed, and 30 or 40 minutes are allocated for group members, working individually, to write down their ideas and solutions. (2) Managers take turns reading their suggestions to the group. One manager writes all the alternatives on a flip chart. No criticism or evaluation of alternatives is allowed until all alternatives have been read. (3) The alternatives are then discussed in the sequence in which they were first proposed. (4) When all alternatives have been discussed, each group member ranks all the alternatives from most preferred to least preferred, and the alternative that receives the highest ranking is chosen.
Difficulty: 2 Medium
Topic: Learning Organization
Learning Objective: 05-04 Explain the role that organizational learning and creativity play in helping managers to improve their decisions.
Bloom’s: Understand
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
78) Which of the following is a way to bring distant managers together to brainstorm and is a written approach to creative problem solving?
Answer: C
Explanation: One way to bring distant managers together to brainstorm is to use the Delphi technique, a written approach to creative problem solving. The questionnaire is sent to the managers and departmental experts who are most knowledgeable about the problem. They are asked to generate solutions and mail the questionnaire back to the group leader.
Difficulty: 1 Easy
Topic: Learning Organization
Learning Objective: 05-04 Explain the role that organizational learning and creativity play in helping managers to improve their decisions.
Bloom’s: Remember
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
79) Which of the following is a part of the Delphi technique of group decision making?
Answer: C
Explanation: One way to bring distant managers together to brainstorm is to use the Delphi technique, a written approach to creative problem solving. The questionnaire is sent to the managers and departmental experts who are most knowledgeable about the problem. They are asked to generate solutions and mail the questionnaire back to the group leader.
Difficulty: 2 Medium
Topic: Learning Organization
Learning Objective: 05-04 Explain the role that organizational learning and creativity play in helping managers to improve their decisions.
Bloom’s: Understand
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
80) Fatima is the manager of the tennis division of a large sporting goods company. An employee named Anika shows great promise but seems to lack the confidence to share her creative ideas. Based on what you know about promoting creativity, which of the following actions should Fatima take?
Answer: D
Explanation: Creativity results when employees have an opportunity to experiment, to take risks, and to make mistakes and learn from them. And employees must not fear that they will be looked down on or penalized for ideas that might at first seem outlandish; sometimes those ideas yield truly innovative products and services. Also, creativity declines when managers look over the shoulders of talented employees and try to “hurry up” a creative solution. Therefore, to promote Anika’s individual creativity, Fatima should praise her square-shaped tennis racquet idea and allow her to think of more ideas without any hands-on supervision.
Difficulty: 3 Hard
Topic: Learning Organization
Learning Objective: 05-04 Explain the role that organizational learning and creativity play in helping managers to improve their decisions.
Bloom’s: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
81) To enhance the interaction between members of a brainstorming group, a manager should
Answer: B
Explanation: When group members “piggyback” they build on each other’s ideas. Such a process if very interactive. Allowing members to present ideas without being criticized and presenting an outline of the problem are effective practices, but they do not enhance interaction.
Difficulty: 3 Hard
Topic: Learning Organization
Learning Objective: 05-04 Explain the role that organizational learning and creativity play in helping managers to improve their decisions.
Bloom’s: Apply
AACSB: Knowledge Application; Analytical Thinking
Accessibility: Keyboard Navigation
82) An individual who looks for opportunities and is aware of mobilizing the resources required for producing new and improved goods and services is called a(n)
Answer: B
Explanation: Entrepreneurs are individuals who notice opportunities and decide how to mobilize the resources necessary to produce new and improved goods and services. Entrepreneurs make all of the planning, organizing, leading, and controlling decisions necessary to start new business ventures.
Difficulty: 1 Easy
Topic: Entrepreneurship
Learning Objective: 05-05 Describe how managers can encourage and promote entrepreneurship to create a learning organization, and differentiate between entrepreneurs and intrapreneurs.
Bloom’s: Remember
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
83) Individuals who pursue opportunities to address problems and needs in order to improve society and well-being, such as reducing poverty, are known as
Answer: A
Explanation: Social entrepreneurs are individuals who pursue initiatives and opportunities to address social problems and needs in order to improve society and well-being, such as reducing poverty, increasing literacy, protecting the natural environment, or reducing substance abuse. Social entrepreneurs seek to mobilize resources to solve social problems through creative solutions.
Difficulty: 1 Easy
Topic: Entrepreneurship
Learning Objective: 05-05 Describe how managers can encourage and promote entrepreneurship to create a learning organization, and differentiate between entrepreneurs and intrapreneurs.
Bloom’s: Remember
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
84) When entrepreneurs believe that they are responsible for what happens to them and that their own actions determine important outcomes such as the success or failure of a new business, they have
Answer: D
Explanation: Entrepreneurs are likely to have a high level of self-esteem and feel competent and capable of handling most situations, including the stress and uncertainty surrounding a plunge into a risky new venture. Entrepreneurs are likely to have an internal locus of control, believing that they are responsible for what happens to them and that their own actions determine important outcomes such as the success or failure of a new business.
Difficulty: 1 Easy
Topic: Entrepreneurship
Learning Objective: 05-05 Describe how managers can encourage and promote entrepreneurship to create a learning organization, and differentiate between entrepreneurs and intrapreneurs.
Bloom’s: Remember
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
85) An entrepreneur is likely to have
Answer: B
Explanation: Entrepreneurs are likely to have a high level of self-esteem and feel competent and capable of handling most situations, including the stress and uncertainty surrounding a plunge into a risky new venture. Entrepreneurs are also likely to have an internal locus of control, believing that they are responsible for what happens to them and that their own actions determine important outcomes such as the success or failure of a new business.
Difficulty: 1 Easy
Topic: Entrepreneurship
Learning Objective: 05-05 Describe how managers can encourage and promote entrepreneurship to create a learning organization, and differentiate between entrepreneurs and intrapreneurs.
Bloom’s: Remember
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
86) A manager who takes “ownership” of a project and provides the leadership and vision that takes a commodity from the idea stage to the final customer is a product
Answer: C
Explanation: One way to promote intrapreneurship is to encourage individuals to assume the role of product champion, a manager who takes “ownership” of a project and provides the leadership and vision that take a product from the idea stage to the final customer.
Difficulty: 1 Easy
Topic: Entrepreneurship
Learning Objective: 05-05 Describe how managers can encourage and promote entrepreneurship to create a learning organization, and differentiate between entrepreneurs and intrapreneurs.
Bloom’s: Remember
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
87) If you want to develop a skunkworks, which of the following actions would you take?
Answer: A
Explanation: A skunkworks is a group of intrapreneurs who are deliberately separated from the normal operation of an organization to encourage them to devote all their attention to developing new products. The idea is that if these people are isolated, they will become so intensely involved in a project that development time will be relatively brief and the quality of the final product will be enhanced. The secrecy with which this unit functioned and speculation about its goals led others to refer to it as “the skunkworks.”
Difficulty: 2 Medium
Topic: Skunkworks
Learning Objective: 05-05 Describe how managers can encourage and promote entrepreneurship to create a learning organization, and differentiate between entrepreneurs and intrapreneurs.
Bloom’s: Apply
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
88) A group of intrapreneurs who are separated from the normal operation of an organization in order to develop new products with a relatively brief development time is known as a(n)
Answer: C
Explanation: A skunkworks is a group of intrapreneurs who are deliberately separated from the normal operation of an organization to encourage them to devote all their attention to developing new products. The idea is that if these people are isolated, they will become so intensely involved in a project that development time will be relatively brief and the quality of the final product will be enhanced.
Difficulty: 1 Easy
Topic: Skunkworks
Learning Objective: 05-05 Describe how managers can encourage and promote entrepreneurship to create a learning organization, and differentiate between entrepreneurs and intrapreneurs.
Bloom’s: Remember
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
89) Calla is the manager for a fragrance company that is considering starting a line of organic perfumes. Her employees have mixed feelings about this idea. Some criticize it as being impractical, but others are enthusiastic about it, despite the costs involved in producing perfumes with organic ingredients. Which of the following actions should Calla take to efficiently and effectively ensure that the company’s organic perfume line reaches the end consumer?
Answer: A
Explanation: One way to promote intrapreneurship is to encourage individuals to assume the role of product champion, a manager who takes “ownership” of a project and provides the leadership and vision that take a product from the idea stage to the final customer. By recognizing that one employee is the staunchest advocate for organic perfume and encouraging her to take charge of the project, Calla is enabling her to be a product champion for this new product.
Difficulty: 2 Medium
Topic: Intrapreneur
Learning Objective: 05-05 Describe how managers can encourage and promote entrepreneurship to create a learning organization, and differentiate between entrepreneurs and intrapreneurs.
Bloom’s: Apply
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
90) A human resource manager for a large company wants to hire people who show strong potential to become intrapreneurs. Considering this, the manager would most likely hire the applicant who
Answer: C
Explanation: Intrapreneurs have many of the same qualities as entrepreneurs. These qualities include internal locus of control, which involves taking responsible for what happens to them. The applicant who takes responsibility for the failure of a project shows internal locus of control. Also, intrapreneurs have self-esteem and feel confident and capable of handling most situations. This same applicant’s confidence that he will correct his mistakes shows high self-esteem.
Difficulty: 2 Medium
Topic: Entrepreneurship
Learning Objective: 05-05 Describe how managers can encourage and promote entrepreneurship to create a learning organization, and differentiate between entrepreneurs and intrapreneurs.
Bloom’s: Apply
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
91) Compare and contrast programmed and nonprogrammed decision-making in organizations. Give an example of each.
Answer: Student examples will vary. The following is a sample answer. Programmed decision-making is routine and automatic. It arises in situations that an organization has faced many times before, and for which it can develop rules and guidelines to be applied. For example, setting up procedures on how to order office supplies is a programmed decision. Nonprogrammed decision making is nonroutine. It arises in situations that are new, ambiguous, and/or complex. No ready-made decision rules have been set down. The likelihood of error is much greater in nonprogrammed decision making than in programmed decision making. For example, deciding which areas of the United States are best for opening a new chain-restaurant is a non-programmed decision.
Difficulty: 2 Medium
Topic: Non-Programmed Decisions
Learning Objective: 05-01 Understand the nature of managerial decision making, differentiate between programmed and nonprogrammed decisions, and explain why nonprogrammed decision making is a complex, uncertain process.
Bloom’s: Apply
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
92) What is intuition? Give an example to support your definition. Should managers use intuition in decision making? Why or why not?
Answer: Student examples will vary. The following is a sample answer. Intuition is the set of feelings, beliefs, and hunches that come readily to mind, require little effort and information gathering, and result in on-the-spot decisions.
Sometimes managers have to make rapid decisions and do not have time to carefully consider the issues involved. They must rely on their intuition to quickly respond to a pressing concern.
For example, when fire chiefs, captains, and lieutenants manage firefighters battling dangerous, out-of-control fires, they often need to rely on their expert intuition to make on-the-spot decisions that will protect the lives of the firefighters, save the lives of others, contain the fires, and preserve property—decisions made in emergency situations entailing high uncertainty, high risk, and rapidly changing conditions. In other cases, managers do have time to make reasoned judgments, but there are no established rules to guide their decisions. Regardless of the circumstances, making nonprogrammed decisions can result in effective or ineffective decision making.
Difficulty: 3 Hard
Topic: Non-Programmed Decisions
Learning Objective: 05-01 Understand the nature of managerial decision making, differentiate between programmed and nonprogrammed decisions, and explain why nonprogrammed decision making is a complex, uncertain process.
Bloom’s: Apply
AACSB: Analytical Thinking
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93) Discuss the assumptions that underlie the classical model of decision-making.
Answer: The assumptions that underlie the classical model of decision making are that managers can generate a complete list of all alternatives and their consequences; they have access to all the information they need to make the optimum decision; and they can easily list their own preferences for each alternative and rank them from least to most preferred to make the optimum decision.
Difficulty: 2 Medium
Topic: Classical Decision-Making Model
Learning Objective: 05-01 Understand the nature of managerial decision making, differentiate between programmed and nonprogrammed decisions, and explain why nonprogrammed decision making is a complex, uncertain process.
Bloom’s: Understand
AACSB: Analytical Thinking
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94) March and Simon developed three important concepts in their administrative model of decision making. Discuss these three concepts.
Answer: Student examples will vary. The following is a sample answer. The three important concepts in this model are bounded rationality, incomplete information, and satisficing decisions. March and Simon believed that managers do not have the mental ability to absorb and evaluate all of the possible relevant information for a complex decision.
Difficulty: 3 Hard
Topic: Classical Decision-Making Model
Learning Objective: 05-01 Understand the nature of managerial decision making, differentiate between programmed and nonprogrammed decisions, and explain why nonprogrammed decision making is a complex, uncertain process.
Bloom’s: Apply
AACSB: Analytical Thinking
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95) Researchers have identified a six-step model that can be used by managers who are faced with an important decision. Discuss any two of these steps.
Answer: Using the work of March and Simon as a basis, researchers have developed a step-by-step model of the decision-making process and the issues and problems that managers confront at each step. The six steps are (1) recognize the need for a decision; (2) generate alternatives; (3) assess alternatives; (4) choose among alternatives; (5) implement the chosen alternative; (6) learn from feedback.
Students can give any two of the following explanations.
Difficulty: 2 Medium
Topic: Classical Decision-Making Model
Learning Objective: 05-02 Describe the six steps managers should take to make the best decisions.
Bloom’s: Understand
AACSB: Reflective Thinking
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96) In assessing alternatives, explain the four criteria to evaluate the pros and cons of alternative courses of action.
Answer: Student examples will vary. The following is a sample answer. Once managers have generated a set of alternatives, they must evaluate the advantages and disadvantages of each one. The key to a good assessment of the alternatives is to define the opportunity or threat exactly and then specify the criteria that should influence the selection of alternatives for responding to the problem or opportunity. One reason for bad decisions is that managers often fail to specify the criteria that are important in reaching a decision. Successful managers use four criteria to evaluate the pros and cons of alternative courses of action:
Difficulty: 3 Hard
Topic: Classical Decision-Making Model
Learning Objective: 05-02 Describe the six steps managers should take to make the best decisions.
Bloom’s: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
97) Describe why the stage of learning from feedback is considered very important for managers in an organization. List the benefits of this step in the decision-making process.
Answer: Learning from feedback is the final step in the decision-making process of an organization. Effective managers always conduct a retrospective analysis to see what they can learn from past successes or failures.
Managers who do not evaluate the results of their decisions do not learn from experience; instead they stagnate and are likely to make the same mistakes again and again. To avoid this problem, managers must establish a formal procedure with which they can learn from the results of past decisions. Managers who always strive to learn from past mistakes and successes are likely to continuously improve the decisions they make. A significant amount of learning can take place when the outcomes of decisions are evaluated, and this assessment can produce enormous benefits. Learning from feedback is particularly important for entrepreneurs who start their own businesses.
Difficulty: 2 Medium
Topic: Classical Decision-Making Model
Learning Objective: 05-02 Describe the six steps managers should take to make the best decisions.
Bloom’s: Understand
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
98) Identify the advantages and disadvantages of group decision making.
Answer: The advantages of group decision making include
The disadvantages of group decision making include
Difficulty: 2 Medium
Topic: Groupthink
Learning Objective: 05-03 Identify the advantages and disadvantages of group decision making, and describe techniques that can improve it.
Bloom’s: Understand
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
99) Define groupthink. Explain a technique that counteracts groupthink.
Answer: Groupthink is a pattern of faulty and biased decision making that occurs in groups whose members strive for agreement among themselves at the expense of accurately assessing information relevant to a decision.
The existence of groupthink raises the question of how to improve the quality of group and individual decision making so managers make decisions that are realistic and are based on thorough evaluation of alternatives. One technique known to counteract groupthink is devil’s advocacy. Devil’s advocacy is a critical analysis of a preferred alternative to ascertain its strengths and weaknesses before it is implemented. The devil’s advocate critiques and challenges the way the group evaluated alternatives and chose one over the others. The purpose of devil’s advocacy is to identify all the reasons that might make the preferred alternative unacceptable. In this way, decision makers can be made aware of the possible perils of recommended courses of action. Devil’s advocacy can thus help counter the effects of groupthink.
Difficulty: 2 Medium
Topic: Groupthink
Learning Objective: 05-03 Identify the advantages and disadvantages of group decision making, and describe techniques that can improve it.
Bloom’s: Understand
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
100) Managers can use a variety of techniques in group decision-making situations to counteract situations in which the group is suffering from groupthink or cognitive biases. Two such techniques have been shown to be especially useful in such situations. Discuss these two techniques and give an example of each.
Answer: Student examples will vary. The following is a sample answer. The two techniques that have been found to be most useful in groups suffering from groupthink or cognitive biases are devil’s advocacy and diversity.
Devil’s advocacy is a critical analysis of a preferred alternative to ascertain its strengths and weaknesses before it is implemented. Typically one member of the decision-making group plays the role of devil’s advocate. The devil’s advocate critiques and challenges the way the group evaluated alternatives and chose one over the others. The purpose of devil’s advocacy is to identify all the reasons that might make the preferred alternative unacceptable. In this way, decision makers can be made aware of the possible perils of recommended courses of action. For example, a group might come to an easy conclusion that a certain resource should be used to produce a product because it is inexpensive to obtain. However, a devil’s advocate in the group could point out that the country producing most of this resource is having political problems that might hamper production. Also, this country uses sweatshop labor that is unethical.
Another way to improve group decision making is to promote diversity in decision-making groups. Bringing together managers of both genders from various ethnic, national, and functional backgrounds broadens the range of life experiences and opinions that group members can draw on as they generate, assess, and choose among alternatives. Moreover, diverse groups are sometimes less prone to groupthink because group members already differ from each other and thus are less subject to pressures for uniformity. For example, if a company wants to sell more products to female consumers, they should make sure their decision-making groups have a significant number of women, who can provide insight in choosing various alternatives.
Difficulty: 3 Hard
Topic: Devil’s Advocacy
Learning Objective: 05-03 Identify the advantages and disadvantages of group decision making, and describe techniques that can improve it.
Bloom’s: Apply
AACSB: Analytical Thinking
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101) Peter Senge has identified five principles that can be used by an organization to create “a learning organization.” Discuss any three of these principles.
Answer: Peter Senge’s five principles for creating a learning organization are personal mastery, complex mental models, team learning, building a shared vision, and systems thinking.
Students can discuss any three of the following principles.
Difficulty: 2 Medium
Topic: Learning Organization
Learning Objective: 05-04 Explain the role that organizational learning and creativity play in helping managers to improve their decisions.
Bloom’s: Understand
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
102) What can managers do to promote individual creativity?
Answer: Managers can promote individual creativity in the following ways:
Difficulty: 2 Medium
Topic: Learning Organization
Learning Objective: 05-04 Explain the role that organizational learning and creativity play in helping managers to improve their decisions.
Bloom’s: Understand
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
103) There are three important techniques that managers can use to promote creativity in group decision-making situations. Discuss any two of these techniques.
Answer: To encourage creativity at the group level, organizations can use group problem-solving techniques that promote creative ideas and innovative solutions. These techniques can also prevent groupthink and help managers uncover biases. The two techniques discussed here are brainstorming and nominal group technique.
Brainstorming is a group problem-solving technique in which managers meet face-to-face to generate and debate a wide variety of alternatives from which to make a decision. Generally, from 5 to 15 managers meet in a closed-door session and proceed like this:
Nominal group technique is a structured way of generating alternatives in writing and gives each manager more time and opportunity to come up with potential solutions. It is especially useful when an issue is controversial and when different managers might be expected to champion different courses of action. Generally a small group of managers meets in a closed-door session and adopts the following procedures:
Difficulty: 2 Medium
Topic: Learning Organization
Learning Objective: 05-04 Explain the role that organizational learning and creativity play in helping managers to improve their decisions.
Bloom’s: Understand
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
104) You are a manager who works with managers employed in different cities. All of you are working on developing the same new product. These managers encounter problems to the ones you face. Even so, you are unable to meet face-to-face with them for any discussion. Explain two ways you can solve this problem.
Answer: Answers will vary, but should include discussion of videoconferencing and the Delphi technique. The following is a potential student answer.
Videoconferencing is one way to bring distant managers together to brainstorm. I could set up a meeting in which the managers and I would interact via video, thereby allowing for the sharing of ideas, problems, and possible solutions.
Also, I could use the Delphi technique, which is a written approach to creative problem solving. As the group leader, I would write a statement of the problem and a series of questions to which participating managers are to respond. After this, I would send the questionnaire to the managers, asking them to generate solutions and mail the questionnaire back to me. Once I receive the questionnaires, I would record and summarize the responses. I would then send the results back to the participants, with additional questions to be answered before a decision can be made. The process would be repeated until a consensus was reached and the most suitable course of action was apparent.
Difficulty: 2 Medium
Topic: Learning Organization
Learning Objective: 05-04 Explain the role that organizational learning and creativity play in helping managers to improve their decisions.
Bloom’s: Apply
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
105) Explain the different ways by which organizations can promote intrapreneurship.
Answer: Student examples will vary. The following is a sample answer. The intensity of competition today, particularly from agile, small companies, has made it increasingly important for large, established organizations to promote and encourage intrapreneurship to raise their level of creativity and organizational learning. The higher the level of intrapreneurship, the higher will be the level of learning and innovation. Organizations can promote intrapreneurship in many ways.
Difficulty: 3 Hard
Topic: Entrepreneurship
Learning Objective: 05-05 Describe how managers can encourage and promote entrepreneurship to create a learning organization, and differentiate between entrepreneurs and intrapreneurs.
Bloom’s: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
Original price was: $30.00.$20.00Current price is: $20.00.
Original price was: $30.00.$20.00Current price is: $20.00.
Original price was: $30.00.$20.00Current price is: $20.00.
Original price was: $30.00.$20.00Current price is: $20.00.
Original price was: $30.00.$20.00Current price is: $20.00.
Original price was: $30.00.$20.00Current price is: $20.00.
