Midterm 2 - Chapter 11

Question 1

Decision Making

Answer 1

the process of developing a commitment to some course of action.2 Three things are noteworthy about this definition

Question 2

Problem

Answer 2

a gap is perceived between some existing state and some desired state

Question 3

Well-Structured Problems

Answer 3

the existing state is clear, the desired state is clear, and how to get from one state to the other is fairly obvious

Question 4

Program

Answer 4

a standardized way of solving a problem

Question 5

Ill-Structured Problems

Answer 5

the existing and desired states are unclear and the method of getting to the desired state (even if clarified) is unknown

Question 6

Rational Decision-making process

Answer 6

1.Idenity Problem
2. Search for Relevant Information
3. Develop Alternative Solutions to the Problem
4. Evaluate Alternative Solutions
5. Choose best alternative
6. Implement Chosen Solution
7. Monitor and Evaluate Chosen solution

Question 7

Perfect Rationality

Answer 7

Can gather information about problems and solutions without cost and is thus completely informed.
Is perfectly logical
Has only one criterion for decision making: economic gain.

Question 8

Bounded Rationality

Answer 8

they try to act rationally, but they are limited in their capacity to acquire and process information

Question 9

Framing

Answer 9

aspects of the presentation of information about a problem that are assumed by decision makers

Question 10

Cognitive Biases

Answer 10

tendencies to acquire and process information in a particular way that is prone to error.

Question 11

Problem Identification and Framing

Answer 11

Perpetual defense
Problem defined in terms of functional specialty
Problem defined in terms of solution
Problem diagnosed in terms of symptoms

Question 12

Information Search: what happens when we have too little information

Answer 12

Availability bias
Confirmation bias
Not-inverted-here bias

Question 13

Availability bias

Answer 13

we favour information that can be accessed quickly and easily, and we thus tend to remember vivid recent events

Question 14

Confirmation bias

Answer 14

the tendency to seek out information that conforms to one’s own definition of or solution to a problem

Question 15

Not-invented-here bias

Answer 15

the tendency to ignore or harbour negative attitudes toward ideas from outside one’s own organization or project team.

Question 16

Too Much Information

Answer 16

Information Overload: reception of more information than is necessary to make effective decisions

Question 17

Maximation

Answer 17

can choose the alternative with the greatest expected value

Question 18

Anchoring effect

Answer 18

decision makers do not adjust their estimates enough from some initial estimate that serves as an (often irrelevant) anchor

Question 19

Satisficing

Answer 19

decision maker establishes an adequate level of acceptability for a solution and then screens solutions until one is found that exceeds this level

Question 20

Risk Cultures

Answer 20

a common understanding of how much risk is tolerated and how risk is framed in terms of potential for gain and loss.

Question 21

Sunk costs

Answer 21

permanent losses of resources incurred as the result of a decision

Question 22

Escalation of commitment

Answer 22

escalation involves devoting more and more resources to actions implied by the decision

Question 23

Hindsight

Answer 23

tendency to review the decision-making process that was used to find out what was done right (in the case of success) or wrong (in the case of failure)

Question 24

Decision Quality (Whether to use groups or not)

Answer 24

Groups are more vigilant than individuals are—more people are scanning the environment.
Groups can generate more ideas than individuals can.
Due to checks and balances, groups can evaluate ideas better than individuals can.

Question 25

Decision Acceptance and Commitment

Answer 25

People wish to be involved in decisions that will affect them. People will better understand a decision in which they participated. People will be more committed to a decision in which they invested personal time and energy.

Question 26

Diffusion of Responsibility

Answer 26

where individuals are less likely to take action or feel personal accountability in a group setting, assuming others will intervene

Question 27

Disadvantages of Group Decision Making

Answer 27

Time Conflict Domination Groupthink

Question 28

Groupthink (disadvanatge)

Answer 28

Illusion of invulnerability Rationalization Illusion of morality Stereotypes of outsiders Pressure for conformity Self-censorship Illusion of unanimity Mindguards

Question 29

Devil's Advocate

Answer 29

challenge existing plans and strategies.

Question 30

How Groups Handle Risks

Answer 30

Risky shift Conservative shift

Question 31

Risky shift

Answer 31

Participants in the research reviewed cases involving risk, such as those involving career choices or investment decisions

Question 32

Conservative shifts

Answer 32

groups came to decisions that were less risky than those of the individual members before interaction.

Question 33

Evidence-based Management

Answer 33

“making decisions through the conscientious, explicit, and judicious use of the best available evidence from multiple sources

Question 34

Crowdsourcing

Answer 34

involves “outsourcing” aspects of a decision process to a large collection of people.

Question 35

Analytics

Answer 35

finding meaningful patterns in large datasets using conventional statistics, mathematical modelling, and various techniques to represent data visually

Question 36

Big data

Answer 36

copious amounts of information that are often collected in real time and can come from a wide variety of sources, particularly digital