Information and Decision Making Chapter 7 Full Test Bank

Chapter 07: Information and Decision Making

True/False

1. The raw facts and observations made useful and meaningful for decision making is called information.

Learning Objective: 7.1

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Management information systems serve a critical function because organizations use them to collect, organize, and distribute data for use in decision-making.

Learning Objective: 7.1

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Analytical competency is the ability to understand new technologies and to use them to their best advantage.

Learning Objective: 7.1

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Public information is the information gathered from stakeholders and the external environment.

Learning Objective: 7.1

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Big data can be mined using basic mathematical and analytical techniques.

Learning Objective: 7.1

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Data mining is the process of collecting data to produce useful information for customers.

Learning Objective: 7.1

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Data visualization and executive dashboards help explain business intelligence through easy-to-understand graphs, charts, and scorecards.

Learning Objective: 7.1

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. A performance threat occurs when the actual performance is less than desired or is moving in an unfavorable direction.

Learning Objective: 7.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. A performance opportunity offers a chance for a better future if the right steps are taken.

Learning Objective: 7.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Problem avoiders deal reasonably well with performance threats but miss many performance opportunities.

Learning Objective: 7.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Problem solvers actively process information and constantly look for problems to solve.

Learning Objective: 7.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Intuitive thinking tends to work best in situations where facts are limited and few decision precedents exist.

Learning Objective: 7.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Sensation thinkers are comfortable with abstraction and unstructured situations.

Learning Objective: 7.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Intuitive feelers prefer broad and global issues, and they value flexibility and human relations.

Learning Objective: 7.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Structured problems can be dealt with through programmed decisions as they are routine and occur over and over again.

Learning Objective: 7.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Decision making in a certain environment requires the use of probabilities to estimate the likelihood that a particular outcome will occur.

Learning Objective: 7.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. A risk environment is a decision situation in which factual information is available about the possible alternative courses of action and their outcomes.

Learning Objective: 7.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Uncertain environments force managers to rely heavily on intuition, judgment, informed guessing, and hunches.

Learning Objective: 7.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. A classical decision model describes decision making within the constraints of limited information and alternatives.

Learning Objective: 7.3

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. A manager who is choosing the first acceptable alternative that comes to his or her attention while solving a problem is making an optimizing decision.

Learning Objective: 7.3

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Comprehension

1. A satisficing decision chooses the alternative that gives the best possible solution to a problem.

Learning Objective: 7.3

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. The decision-making process is not complete until results are evaluated.

Learning Objective: 7.3

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. A spotlight question tests the ethics of a decision by exposing it to scrutiny through the eyes of family and community members.

Learning Objective: 7.3

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Heuristics are strategies that help in dealing with complex and ambiguous situations.

Learning Objective: 7.4

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. The availability bias bases a decision on similarity to other situations.

Learning Objective: 7.4

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. A person decides that a group is aggressive after finding out that some members of that group are aggressive. This is an example of representativeness bias.

Learning Objective: 7.4

Difficulty: Easy

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. Availability bias occurs when decisions are influenced by inappropriate allegiance to a previously existing value or starting point.

Learning Objective: 7.4

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. When a problem is evaluated and resolved in the positive or negative context in which it is perceived, it is likely to result in a framing error.

Learning Objective: 7.4

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. A confirmation error occurs when focusing only on information that is consistent with a decision already made.

Learning Objective: 7.4

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. The confirmation error is also known as the sunk-cost fallacy.

Learning Objective: 7.4

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Big-C creativity occurs when average people come up with unique ways to deal with daily events and situations.

Learning Objective: 7.4

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. The first step in design thinking is visualizing and brainstorming potential solutions in collaboration with others.

Learning Objective: 7.4

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Creative people are good at making connections among seemingly unrelated facts or events.

Learning Objective: 7.4

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Team creativity skills are most likely to blossom when buoyed by management support and the right organizational culture.

Learning Objective: 7.4

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

Multiple Choice

1. _____ competency is the ability to locate, gather, and organize meaningful data for use in decision making.
2. Technological
3. Interpersonal
4. Information
5. Innovation
6. Analytical

Learning Objective: 7.1

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. The ability to evaluate and examine information to make actual decisions and solve real problems is known as _____ competency.
2. innovation
3. analytical
4. technological
5. interpersonal
6. information

Learning Objective: 7.1

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. _____ serve a critical function in organizations to collect, organize, and distribute data.
2. Classical Decision Models
3. Executive Dashboards
4. Management Information Systems
5. Organizational Cultures
6. Problem Solvers

Learning Objective: 7.1

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Which of the following is NOT a goal of data mining?
2. Collect and organize data
3. Offer insights to decision-makers
4. Reveal patterns
5. Support predictions

Learning Objective: 7.1

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. The term _____ describes the systematic evaluation and analysis of information to make decisions.
2. tactics
3. assay
4. heuristics
5. analytics
6. strategy

Learning Objective: 7.1

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Organizations can collect data from social media, stories on the local news, global industrial manufacturing data, and government statistics. This satisfies the ____ of Big Data.
2. Value
3. Variety
4. Velocity
5. Veracity
6. Volume

Learning Objective: 7.1

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Suppose you want to buy a hammock from Wayfair.com. Before purchasing, you read the numerous reviews on the product. The reviews are so exceptional that you question whether real customers wrote them. This refers to the ____ of Big Data.
2. Value
3. Variety
4. Velocity
5. Veracity
6. Volume

Learning Objective: 7.1

Difficulty: Moderate

AACSB: Application of Knowledge

Bloom’s Taxonomy: Application

1. _____ is the process of tapping information systems to extract and report data in organized ways that are helpful to decision makers.
2. Analytics
3. Strategic opportunism
4. Satisficing
5. Heuristics
6. Business intelligence

Learning Objective: 7.1

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. _____ is the process of identifying a discrepancy between an actual and a desired state of affairs, and then taking action to resolve it.
2. Error mapping
3. Scenario planning
4. Problem solving
5. Risk taking
6. Opportunity seeking

Learning Objective: 7.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Managers who are passive in gathering information and are unwilling to make decisions and deal with problems are referred to as problem _____.
2. seekers
3. creators
4. defenders
5. avoiders
6. claimers

Learning Objective: 7.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. An IT program manager realizes that there are certain defects in a product delivered. However, he assumes that the users will not use the application that is defective but does not make efforts to rectify it. This manager is most likely a problem _____.
2. seeker
3. creator
4. defender
5. avoider
6. claimer

Learning Objective: 7.2

Difficulty: Moderate

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. The managers who are regarded as problem solvers:
2. try to solve problems only when they are forced by the situation.
3. unwillingly gather information, not wanting to make decisions or deal with problems.
4. anticipate performance threats and opportunities and take action to gain an advantage.
5. ignore information that would otherwise signal the presence of a performance threat.
6. actively process information and constantly look for problems to solve.

Learning Objective: 7.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. The marketing manager of a firm receives a lot of complaints from customers regarding late delivery of products. After he receives the complaints, he takes appropriate measures to rectify the issues in the supply chain. He is most likely a _____.
2. problem defender
3. problem avoider
4. problem claimer
5. problem seeker
6. problem solver

Learning Objective: 7.2

Difficulty: Moderate

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. Which of the following traits is associated with problem seekers?
2. They are passive in information gathering, not wanting to make decisions or deal with problems.
3. They are willing to make decisions and try to solve problems, but only when forced by the situation.
4. They ignore information that would otherwise signal the presence of a performance opportunity or threat.
5. They are reactive in gathering information to solve problems after, but not before, they occur.
6. They anticipate performance threats and opportunities and take action to gain an advantage.

Learning Objective: 7.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. A medical officer in a multispecialty hospital proactively finds customer service deficiencies and takes remedial measures in advance. This trait of the medical officer shows that he is a _____.
2. problem defender
3. problem avoider
4. problem claimer
5. problem seeker
6. problem solver

Learning Objective: 7.2

Difficulty: Moderate

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. Problem solvers differ from problem seekers as problem solvers:
2. actively process information and constantly look for problems to solve.
3. are willing to make decisions and try to solve problems, but only when forced by the situation.
4. anticipate performance threats and opportunities and take action to gain advantage.
5. are passive in information gathering, making decisions or dealing with problems.
6. ignore information that would otherwise signal the presence of a performance opportunity threat.

Learning Objective: 7.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Comprehension

1. Which of the following is true about systematic thinking?
2. It is often imaginative and works best in situations where facts are limited and few decision precedents exist.
3. It uses a quick and broad evaluation of the situation and the possible alternative courses of action.
4. It makes managers deal with many aspects of a problem at once and consider hunches based on past experience.
5. It makes a person approach a problem in a rational, step-by-step, analytical fashion.
6. It is always possible for the firm’s top managers to make systematic fact-based decisions.

Learning Objective: 7.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Comprehension

1. Dr. Morales initially conducts basic medical tests for her patients. Once she examines the reports of these tests, she suggests more specific tests to the patients. She also examines all the reports in detail before suggesting any treatment. This type of problem solving in a step-by-step fashion is known as _____ thinking.
2. heuristic
3. systematic
4. intuitive
5. spontaneous
6. flexible

Learning Objective: 7.2

Difficulty: Moderate

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. Managers who are _____ make a plan before taking action and carefully search for information to facilitate problem solving in a step-by-step fashion.
2. flexible
3. systematic
4. intuitive
5. spontaneous
6. instinctive

Learning Objective: 7.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. A manager using _____ thinking is flexible and spontaneous in problem fixing.
2. systemic
3. lateral
4. systematic
5. design
6. intuitive

Learning Objective: 7.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Maria, a manager at a mining firm, is good at handling crisis situations. She is spontaneous in problem solving, has a flexible approach, and provides quick alternative courses of action. This type of problem-solving approach by Maria shows that she is a(n) _____ thinker.
2. systematic
3. analytical
4. intuitive
5. systemic
6. lateral

Learning Objective: 7.2

Difficulty: Moderate

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. _____ thinking is an ability to address many problems at once.
2. Lateral
3. Intuitive
4. Systematic
5. Critical
6. Multidimensional

Learning Objective: 7.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Yousuf, a manager at a restaurant, has the ability to deal with numerous problems at once and provide effective solutions. He has the ability to map many problems into one network, and he makes decisions that benefit the organization in the short and the long run. Yousuf’s effectiveness reveals that he most likely uses _____ thinking.
2. critical
3. multidimensional
4. lateral
5. intuitive
6. heuristic

Learning Objective: 7.2

Difficulty: Moderate

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. Which of the following skills refers to the ability to remain focused on long-term objectives while being flexible enough to resolve short-term problems and opportunities in a timely manner?
2. Information competency
3. Strategic opportunism
4. Systematic thinking
5. Management analytics
6. Performance planning

Learning Objective: 7.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Martha has succeeded as a manager due to her ability to remain focused on long-term objectives. She is flexible in her approach and provides effective and timely solutions for most of the problems, maintaining focus on the long-term goals. This skill of Martha is known as _____.
2. technological competency
3. strategic opportunism
4. systematic thinking
5. information competency
6. intuitive thinking

Learning Objective: 7.2

Difficulty: Moderate

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. _____ tend to emphasize the impersonal rather than the personal and take a realistic approach to problem solving.
2. Intuitive feelers
3. Intuitive thinkers
4. Sensation feelers
5. Intuitive seekers
6. Sensation thinkers

Learning Objective: 7.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Salma emphasizes the impersonal, tends to take a realistic approach to problem solving, and prefers facts and clear goals. She likes to be in situations of high control and prefers problem solving in a certain environment. Salma can be regarded as a(n) _____.
2. sensation feeler
3. idealistic thinker
4. sensation thinker
5. intuitive feeler
6. intuitive thinker

Learning Objective: 7.2

Difficulty: Moderate

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. The _____ are comfortable with unstructured situations, and they tend to be idealistic and prone toward intellectual and theoretical positions.
2. intuitive feelers
3. intuitive thinkers
4. sensation feelers
5. sensation seekers
6. sensation thinkers

Learning Objective: 7.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Deepak tends to emphasize the impersonal and takes a logical approach to problem solving, but he usually avoids details. He is prone to intellectual and theoretical positions and is comfortable with unstructured situations. These traits show that Deepak is a(n) _____.
2. sensation feeler
3. idealistic thinker
4. sensation thinker
5. intuitive feeler
6. intuitive thinker

Learning Objective: 7.2

Difficulty: Moderate

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. _____ are insightful, comfortable with intangibles, and value flexibility and human relationships.
2. Sensation feelers
3. Intuitive thinkers
4. Sensation seekers
5. Sensation thinkers
6. Intuitive feelers

Learning Objective: 7.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Dmitri values flexibility and human relations while making decisions. He prefers broad and global issues, tends to avoid details during problem solving, and is comfortable with intangibles. Dmitri is most likely a(n) _____.
2. sensation feeler
3. idealistic thinker
4. sensation thinker
5. intuitive feeler
6. intuitive thinker

Learning Objective: 7.2

Difficulty: Moderate

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. _____ are open communicators, tend to be realistic, and emphasize both analysis and human relations.
2. Intuitive feelers
3. Intuitive thinkers
4. Sensation feelers
5. Intuitive seekers
6. Sensation thinkers

Learning Objective: 7.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Bao focuses on facts and tends to take a realistic approach to problem solving. She emphasizes analysis. She is an open communicator, is responsive to feelings, and values human relations. These characteristics show that Bao is a(n) _____.
2. sensation thinker
3. intuitive feeler
4. intuitive thinker
5. sensation feeler
6. idealistic thinker

Learning Objective: 7.2

Difficulty: Moderate

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. Sensation thinkers differ from intuitive thinkers as intuitive thinkers:
2. are insightful and prefer broad and global issues.
3. are comfortable with abstraction and unstructured situations.
4. like hard facts, clear goals, certainty, and situations of high control.
5. tend to emphasize the impersonal rather than the personal and take a realistic approach to problem solving.
6. are open communicators and sensitive to feelings and values.

Learning Objective: 7.2

Difficulty: Moderate

AACSB: Analytical thinking

Bloom’s Taxonomy: Comprehension

1. The problems that are familiar, straight forward, and clear with respect to information needs are called _____ problems.
2. ambiguous
3. undefined
4. structured
5. framing
6. uncertain

Learning Objective: 7.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Judith has been asked to prepare a report comparing the profits the company earned in the current financial year in its domestic market and compare it with the previous year’s report for the same market. The type of problem faced by Judith in the above scenario is a(n) _____ problem.
2. unstructured
3. structured
4. ambiguous
5. framing
6. uncertain

Learning Objective: 7.2

Difficulty: Moderate

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. Which of the following is true of unstructured problems?
2. They are clear with respect to information needs.
3. They can be resolved using readily available solutions from past experiences.
4. They can be resolved with a high degree of certainty.
5. They are ambiguous and contain information deficiencies.
6. They are routine and occur over and over again.

Learning Objective: 7.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Comprehension

1. Sumaira has been asked to prepare a report on the best advertising campaign for the new product her company is launching in a new market. The type of problem being faced by Sumaira in the above situation is a(n) _____ problem.
2. integrated
3. anticipated
4. computational
5. certain
6. unstructured

Learning Objective: 7.2

Difficulty: Moderate

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. A _____ decision applies a solution from past experience to a routine problem.
2. unique
3. nonprogrammed
4. tactical
5. nonrecurring
6. programmed

Learning Objective: 7.2

Difficulty: Easy

AACSB: Application of knowledge

Bloom’s Taxonomy: Knowledge

1. Melissa, a manager in the customer service division of a company, usually makes decisions to resolve customer complaints based on her previous experiences and the standard procedures set by the company. The type of decision being made by Melissa is known as a _____ decision.
2. unstructured
3. tactical
4. nonrecurring
5. programmed
6. unique

Learning Objective: 7.2

Difficulty: Moderate

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. A decision that applies a specific solution crafted for a unique problem is referred to as a _____ decision.
2. repetitive
3. nonprogrammed
4. satisficing
5. programmed
6. standard

Learning Objective: 7.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Julio is devising a marketing plan for introducing his company’s products into a new market. Julio comes up with customized marketing strategies that cater to the unique needs of the new market. All his decisions involve risk and uncertainty as he is unaware of the conditions in the new market. The type of decision being made by Julio in the above situation is called a _____ decision.
2. repetitive
3. programmed
4. standard
5. nonprogrammed
6. satisficing

Learning Objective: 7.2

Difficulty: Moderate

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. A _____ decision occurs when an unexpected problem arises that can lead to disaster if not resolved quickly and appropriately.
2. nonprogrammed
3. strategic
4. crisis
5. programmed
6. standard

Learning Objective: 7.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. A(n) _____ environment offers complete information on possible action alternatives and their consequences.
2. uncertain
3. speculative
4. risk
5. certain
6. unanticipated

Learning Objective: 7.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. To assist in their promotions and appraisals, Ho Sook analyzed and graded the performance of her team members in the previous year. She is sure of her decisions and its possible outcomes as she had all the factual information. This type of environment that is ideal for decision making is known as a(n) _____.
2. uncertain environment
3. risk environment
4. certain environment
5. threat environment
6. unanticipated environment

Learning Objective: 7.2

Difficulty: Moderate

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. A(n) _____ environment lacks complete information but offers “probabilities” of the likely outcomes for possible action alternatives.
2. uncertain
3. secure
4. risk
5. certain
6. definite

Learning Objective: 7.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Chikashi, a manager at a hotel, decided to launch a new type of cuisine in his restaurant because the restaurant was incurring losses due to negative feedback on its existing cuisine. He had to make a decision immediately to improve the situation and was aware of the possible consequences of his actions. Chikashi had to make the decision in a(n) _____ environment.
2. uncertain
3. risk
4. certain
5. secure
6. anticipated

Learning Objective: 7.2

Difficulty: Moderate

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. A(n) _____ environment lacks so much information that it is difficult to assign probabilities to the likely outcomes of alternatives.
2. anticipated
3. risk
4. certain
5. threat
6. uncertain

Learning Objective: 7.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Nikolai and his team have been asked to make a decision on implementing a new technology that might help to decrease the production time at their firm. They do not have any factual information about the performance of the new technology, and it is difficult to predict the outcome of their decision. They are forced to rely heavily on their intuition to make the decision. This represents a(n) _____ environment.
2. anticipated
3. secure
4. certain
5. precise
6. uncertain

Learning Objective: 7.2

Difficulty: Moderate

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. Which of the following is the first step in a decision-making process?
2. Generating alternative solutions
3. Evaluating results
4. Evaluating alternative solutions
5. Identifying and defining a problem
6. Choosing a preferred course of action

Learning Objective: 7.3

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Nicole is trying to solve a problem that has resulted in defective products. She has understood that the problem is due to a technical failure and has realized that it has to be corrected immediately to avoid further loss. The next step in Nicole’s decision-making process after collecting all the details regarding the problem is to:
2. choose a preferred course of action.
3. evaluate the implemented solution.
4. implement the decision.
5. define the problem.
6. generate and evaluate alternative solutions.

Learning Objective: 7.3

Difficulty: Moderate

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. A decision-making process ends with the:
2. choice of a preferred course of action.
3. evaluation of implemented solutions.
4. implementation of the decision.
5. evaluation of alternative solutions.
6. generation of alternative solutions.

Learning Objective: 7.3

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Which of the following is a common mistake that can occur in the first step of decision making?
2. Choosing the first alternative that gives a satisfactory solution
3. Abandoning the search for alternatives too quickly
4. Lack-of-participation error
5. Focusing on symptoms instead of causes
6. Not measuring the performance results

Learning Objective: 7.3

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. A classical decision model differs from a behavior decision model as the classical model:
2. assumes that people act with only partial knowledge about the available action alternatives and their consequences.
3. describes decision making with limited information and alternatives.
4. recognizes cognitive limitations to our human information-processing capabilities.
5. describes how many decisions get made in the ambiguous and fast-paced problem situations.
6. assumes that the choice of preferred course of action is made by a decision maker who is fully informed about all possible alternatives.

Learning Objective: 7.3

Difficulty: Moderate

AACSB: Analytical thinking

Bloom’s Taxonomy: Comprehension

1. Which of the following describes decision making with complete information?
2. Classical decision model
3. Satisficing decision
4. Bounded rationality
5. Behavioral decision model
6. Cognitive limitation

Learning Objective: 7.3

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. A(n) _____ decision chooses the alternative that gives the absolute best solution to a problem.
2. satisficing
3. intuitive
4. optimizing
5. experimental
6. heuristic

Learning Objective: 7.3

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Priya, a manager at an IT firm, likes to focus on facts when making decisions. When she faces a well-defined problem and has all the information regarding the possible action alternatives as well as their consequences, she is most likely to make a(n) _____ decision that gives the best possible solution for a problem.
2. intuitive
3. optimizing
4. satisficing
5. heuristic
6. experimental

Learning Objective: 7.3

Difficulty: Moderate

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. Which of the following describes making decisions within the constraints of limited information and alternatives?
2. Decision optimization
3. Management analytics
4. Bounded rationality
5. Classical decision model
6. Business intelligence

Learning Objective: 7.3

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Which of the following describes decision making with limited information and bounded rationality?
2. Classical decision model
3. Certain environment
4. Optimizing decision
5. Behavioral decision model
6. Unstructured environment

Learning Objective: 7.3

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. A decision that chooses the first acceptable alternative that comes to one’s attention is called a(n) _____ decision.
2. optimizing
3. fully informed
4. influential
5. satisficing
6. absolute best

Learning Objective: 7.3

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Adriana is not keen on collecting facts and information while solving problems. She is spontaneous in decision making and usually chooses the first possible alternative that comes to her attention, and she provides an acceptable solution to a given problem. The type of decision being made by Adriana in such situations is known as a(n) _____ decision.
2. absolute best
3. satisficing
4. conditional
5. optimizing
6. fully informed

Learning Objective: 7.3

Difficulty: Moderate

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. _____ is failure to involve in a decision the persons whose support is needed to implement it.
2. Framing error
3. Lack-of-participation error
4. Bounded rationality
5. Confirmation error
6. Strategic opportunism

Learning Objective: 7.3

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Strategies, such as framing, that are used for simplifying decision making are known as _____.
2. algorithmics
3. statistics
4. data mining
5. optimizing strategies
6. heuristics

Learning Objective: 7.4

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. The _____ bases a decision on recent information or events.
2. framing error
3. availability bias
4. representativeness bias
5. confirmation error
6. anchoring bias

Learning Objective: 7.4

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Based on his recollection of a recent product failure, Abdul, the manager of a company, decides not to invest in a new product, even though the readily available information is infallible and irrelevant. This is an example of _____.
2. confirmation error
3. framing error
4. availability bias
5. escalating commitment
6. anchoring bias

Learning Objective: 7.4

Difficulty: Moderate

AACSB: Application of knowledge

Bloom’s Taxonomy: Knowledge

1. The _____ occurs when people assess likelihood of something happening based on its similarity to a stereotyped set of occurrences.
2. availability bias
3. lack-of-participation error
4. representativeness bias
5. confirmation error
6. adjustment bias

Learning Objective: 7.4

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Rupert, who leads the design team in an automobile firm, decides not to invest in a particular technology that helps to improve the fuel efficiency of cars, as other automobile companies who had invested in similar technologies had not achieved much success. The type of decision-making error made by Rupert is known as _____.
2. availability bias
3. confirmation error
4. adjustment bias
5. lack-of-participation error
6. representativeness bias

Learning Objective: 7.4

Difficulty: Moderate

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. The _____ occurs when decisions are influenced by inappropriate allegiance to a previously existing value or starting point.
2. confirmation error
3. lack-of-participation error
4. representativeness bias
5. anchoring and adjustment bias
6. availability bias

Learning Objective: 7.4

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Rajiv was asked to prepare a report on the estimated costs of introducing a new product into the market. He estimated the costs by slightly increasing the costs the company had incurred while introducing a product into the market the previous year. This might not be accurate, because a number of other factors should also have been considered while calculating the estimated costs for the current year. This type of decision-making error is known as _____.
2. availability bias
3. confirmation error
4. representativeness bias
5. anchoring and adjustment bias
6. lack-of-participation error

Learning Objective: 7.4

Difficulty: Moderate

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. A(n) _____ occurs when a problem is evaluated and resolved in the context in which it is perceived.
2. escalating commitment
3. lack-of-participation error
4. confirmation error
5. availability bias
6. framing error

Learning Objective: 7.4

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Catalina, the manager of a law firm, makes a decision about the pay raise of her interns based only on their current salaries. This type of decision making can lead to _____.
2. lack-of-participation error
3. availability bias
4. representativeness bias
5. framing error
6. confirmation error

Learning Objective: 7.4

Difficulty: Moderate

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. A(n) _____ occurs when focusing only on information that validates a decision already made.
2. confirmation error
3. escalating commitment
4. lack-of-participation error
5. anchoring and adjustment bias
6. framing error

Learning Objective: 7.4

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Julie is a manager who completely trusts one of her employee’s decisions due to his previous good performances. She always looks for positives in his decisions rather than analyzing the employee’s decisions in a rational manner. She generally tends to neglect the drawbacks in his decision making. This type of error in decision making is called _____.
2. anchoring and adjustment bias
3. framing error
4. confirmation error
5. representativeness bias
6. lack-of-participation error

Learning Objective: 7.4

Difficulty: Moderate

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. _____ is the continuation of a course of action even though it is not working.
2. Confirmation error
3. Escalating commitment
4. Lack-of-participation error
5. Framing error
6. Strategic opportunism

Learning Objective: 7.4

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Ryan, the marketing manager at a company, decides to invest more money to promote a technology that has earlier failed at the market due to its technical incompetency. Ryan is unwilling to accept that the product lacks the competitive edge to survive in the market. He is not ready to admit his mistakes and applies more resources to pursue a course of action that is not working. This type of decision-making trap is known as _____.
2. confirmation error
3. escalating commitment
4. framing error
5. strategic opportunism
6. lack-of-participation error

Learning Objective: 7.4

Difficulty: Moderate

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. _____ unlocks creativity in decision making through a process of experiencing, ideation, and prototyping.
2. Problem solving
3. Escalating commitment
4. Business Intelligence
5. Design thinking
6. Strategic opportunism

Learning Objective: 7.4

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. The ideation step in design thinking involves:
2. accepting problems as they are delivered.
3. defining problems by research and observation.
4. visualizing and brainstorming potential solutions in collaboration with others.
5. looking for
6. Answers to assigned problems through standard procedures.
7. testing and modifying the potential solution over and over to achieve the best outcome.

Learning Objective: 7.4

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Roberto is good with electronic devices. He learns their functions fast and can operate new gadgets well. Which of the following can best describe Roberto’s ability?
2. Technological competency
3. Business competency
4. Information competency
5. Entrepreneurial competency
6. Analytical competency

Learning Objective: 7.1

Difficulty: Moderate

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. Ayesha, an assistant manager of a retail chain, is always inspecting areas for possible issues that could hinder smooth functioning of the business. She always anticipates a problem or an opportunity and takes appropriate actions in advance. Ayesha can be referred to as a _____.
2. problem solver
3. problem maker
4. problem avoider
5. problem creator
6. problem seeker

Learning Objective: 7.2

Difficulty: Hard

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. Henry takes time to examine problems and breaks them down into segments to see where the actual problems lie and how they can be solved. He divides the problems into smaller components and then addresses them in a logical and integrated fashion. Henry’s approach to problem solving is an example of _____.
2. problem seeking
3. systematic thinking
4. multidimensional thinking
5. intuitive thinking
6. strategic opportunism

Learning Objective: 7.2

Difficulty: Hard

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. Priya, a manager at an IT firm, has to make a decision on the amount of money to be allocated for purchasing five new laptops for her team members. She is aware of the current price of the laptops and has the information about the amount of money spent on purchasing new laptops the previous year. This type of environment that is ideal for decision-making is known as a(n) _____.
2. structured environment
3. risk environment
4. certain environment
5. threat environment
6. unanticipated environment

Learning Objective: 7.2

Difficulty: Moderate

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. Aara does not seem to be as productive as she usually is. Afreen, her manager, is concerned about her performance. Afreen wants to talk to Aara and solve the problem. Which of the following is the first step Afreen should take in the decision-making process?
2. Generate and evaluate alternative solutions to improve her performance
3. Choose a preferred course of action for performance improvement
4. Identify and define the problem that is causing the productivity issues
5. Talk to Aara’s family
6. Evaluate solutions before consulting Aara

Learning Objective: 7.3

Difficulty: Hard

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. “We cannot rely on Stephen. He also worked for the same company Anna did. And we all know how little we could rely on her.” This statement is an example of a(n) _____.
2. availability bias
3. conjunction fallacy
4. representativeness bias
5. anchoring bias
6. framing error

Learning Objective: 7.4

Difficulty: Hard

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. Alejandro is assigned the task of marketing a new experimental drug to consumers in a developing country. He is not aware of the potential side-effects of the drug. Moreover, Alejandro does not know if there is a demand for this drug in that developing country. He is unable to even assign probabilities to the likely outcomes of his marketing strategies to sell this drug. The decision-making environment of Alejandro can be referred to as a(n) _____.
2. uncertain environment
3. risk environment
4. certain environment
5. threat environment
6. unanticipated environment

Learning Objective: 7.2

Difficulty: Moderate

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. Jiao is the assistant manager in a bank. She notices that few of her team members have become very complacent and they no longer follow quality control procedures. However, Jiao ignores this information and does not take any action to rectify this threat to performance. Usually, she passively gathers information and is unwilling to deal with problems. In this scenario, Jiao can be regarded as a _____.
2. problem defender
3. problem avoider
4. problem claimer
5. problem seeker
6. problem solver

Learning Objective: 7.2

Difficulty: Moderate

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. Vikram is a very successful car salesman who generates a lot of revenue for his firm. His manager is impressed with his performance and hires his younger brother as a car salesman in the firm, assuming that he will be as successful as Vikram in selling cars. However, Vikram’s brother fails to live up to the expectations. The type of decision-making error made by Vikram’s manager in this scenario is known as _____.
2. availability bias
3. confirmation error
4. adjustment bias
5. lack-of-participation error
6. representativeness bias

Learning Objective: 7.4

Difficulty: Moderate

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

1. Melissa has been assigned to implement performance improvement procedures in her organization. She is in the final stage of the decision-making process. In order to make sure that the performance improvement procedures she implemented have been effective, she should _____.
2. analyze the performance improvement procedures
3. identify and define the factors affecting performance
4. generate and evaluate alternative course of action
5. choose a preferred course of action
6. evaluate the results

Learning Objective: 7.3

Difficulty: Moderate

AACSB: Application of knowledge

Bloom’s Taxonomy: Application

Essay

1. What is the use of internal and external information in organizations?

Within organizations, people need vast amounts of internal information to make decisions and solve problems in their daily work. They need information from their immediate work setting and from other parts of the organization. Internal information flows downward in such forms as goals, instructions, and feedback; it flows horizontally in ways that assist in cross-functional coordination and problem solving; and it flows upward in such forms as performance reports, suggestions for improvement, and even disputes. The ability of technology to gather and move information quickly within an organization can be a great asset to decision making. It helps top levels stay informed while freeing lower levels to make speedy decisions and take the actions they need to best perform their jobs.

Learning Objective: 7.1

Difficulty: Moderate

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. What are the five criteria that help in testing if available data is useful and meaningful for decision making?

1. Timely—The information is available when needed; it meets deadlines for decision making and action.

2. High quality—The information is accurate, and it is reliable; it can be used with confidence.

3. Complete—The information is complete and sufficient for the task at hand; it is as current and up to date as possible.

4. Relevant—The information is appropriate for the task at hand; it is free from extraneous or irrelevant material.

5. Understandable—The information is clear and easily understood by the user; it is free from unnecessary detail.

Learning Objective: 7.1

Difficulty: Moderate

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. In order for big data to become really useful in helping to solve critical problems and pursue attractive opportunities, it should satisfy Five “Vs”. List and describe these Five “Vs”.
2. Volume – the data must be available in super large quantities
3. Variety – the data must be collected from multiple sources including sources like social media
4. Veracity – the data must be believable
5. Velocity – the data should not be a snapshot of reality but collected in real time
6. Value – the data should be worth the time, effort, and resources necessary to collect it

Learning Objective: 7.1

Difficulty: Moderate

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Differentiate between programmed and nonprogrammed decisions.

Nonprogrammed decisions craft novel solutions to meet the demands of the unique situation at hand. Managers use nonprogrammed decisions to deal with unstructured problems that are new or unusual situations full of ambiguities and information deficiencies. They often involve choice of strategies and objectives in some situations of uncertainty.

Learning Objective: 7.2

Difficulty: Moderate

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. What is the role of ethical reasoning in the decision-making process? How can ethical reasoning be checked in decision making?

We sometimes have to take special care to stay tuned into virtues—things like fairness, kindness, compassion, and generosity—and guard against vices—things like greed, anger, ignorance, and lust. One way to check ethical reasoning in decision making is to ask and

Answer pointed questions that bring critical thinking into the process. Gerald Cavanagh and his associates, for example, suggest that a decision should test positive on these four ethics criteria.

1. Utility—Does the decision satisfy all constituents or stakeholders?

2. Rights—Does the decision respect the rights and duties of everyone?

3. Justice—Is the decision consistent with the canons of justice?

4. Caring—Is the decision consistent with my responsibilities to care?

Learning Objective: 7.3

Difficulty: Moderate

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. How does design thinking help in making creative decisions?

• Experiencing involves defining problems by research and observation and not simply accepting them as delivered.
• Ideation involves visualizing and brainstorming potential solutions in collaboration with others.
• Prototyping involves testing and modifying the potential solution over and over to achieve the best outcome.

Learning Objective: 7.4

Difficulty: Moderate

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

Text Entry

1. Analytical _____ is the ability to evaluate and analyze information to make actual decisions and solve real problems.

Learning Objective: 7.1

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Management ____ systems collect, organize, and distribute data for use in decision making.

Learning Objective: 7.1

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Data ___ is the process of analyzing data for patterns, predictions, and insights useful for decision makers.

Learning Objective: 7.1

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Business intelligence taps ____ to extract and report data in organized ways that are helpful to decision makers.

Learning Objective: 7.1

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Data visualization and executive dashboards present clear and efficient visualizations of key performance indicators on a ___ basis.

Learning Objective: 7.1

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Problem ____ ignore information indicating a performance opportunity or threat.

Learning Objective: 7.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Strategic ____ focuses on long-term objectives while being flexible in dealing with short-term problems.

Learning Objective: 7.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. ____ problems are straightforward and clear with respect to information needs.

Learning Objective: 7.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. A nonprogrammed decision applies a(n) ____ solution crafted for a unique problem.

Learning Objective: 7.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. A(n) ____ environment offers complete information on possible action alternatives and their consequences.

Learning Objective: 7.2

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. The decision-making process begins with ____ of a problem and ends with evaluation of results.

Learning Objective: 7.3

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Unintended consequences are ____ positive or negative side effects that result from a decision.

Learning Objective: 7.3

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. The classical decision model describes decision making with ____ information.

Learning Objective: 7.3

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. ____ participation error occurs when people are told they have a voice in decision making but no one in authority listens to their inputs.

Learning Objective: 7.3

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. The ____ questions test the ethics of a decision by exposing it to scrutiny through the eyes of family, community members, and ethical role models.

Learning Objective: 7.3

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Framing ____ is trying to solve a problem in the context in which it is perceived.

Learning Objective: 7.4

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. The ____ bias bases a decision on similarity to other situations.

Learning Objective: 7.4

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. ____ commitment is the continuation of a course of action even though it is not working.

Learning Objective: 7.4

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Little-C creativity occurs when ____ people come up with unique ways to deal with daily events and situations.

Learning Objective: 7.4

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge

1. Design ____ unlocks creativity in decision making through a process of experiencing, ideation, and prototyping.

Learning Objective: 7.4

Difficulty: Easy

AACSB: Analytical thinking

Bloom’s Taxonomy: Knowledge