@Foundations of Decision Making

@Foundations of Decision Making - Part II - Planning...

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Part II - Planning Chapter Four: Foundations of Decision Making True/False 1. Heuristics or “rules of thumb” improve the accuracy of a decision maker's judgment. (False; Moderate; p. 128) 2. The decision-making process is a set of eight steps that begins with an analysis of the feasibility of alternatives. (False; Challenging; p. 120) 3. When decisions must be made with limited information because full knowledge of the problem is unavailable and the probability of outcomes is unknown, the condition of uncertainty exists. (True; Easy; p. 124) 4. During the identification of alternatives step in the decision-making process, the strengths and weaknesses of each alternative are evaluated. (False; Moderate; p. 122) 5. The concept of bounded rationality differs from the rational decision-making model in that decision makers tend to select the first reasonable choices that are available or are easy to find. (True; Moderate; p. 127) 6. Bounded rationality refers to the fact that most managers make consistent, value- maximizing choices within specified constraints. (False; Moderate; p. 127) 7. A problem is a discrepancy or conflict between an existing and a desired state of affairs. (True; Easy; p. 120) 8. Satisficing is the tendency for managers to seek solutions that are satisfactory and sufficient. (True; Easy; p. 127) 9. According to the economist Herbert Simon, satisficing is the most effective approach to management decision-making. (False; Moderate; p. 127) 10. An assumption of the rational decision-making model is that the problem that is being solved is clear and unambiguous. (True; Easy; p. 124; Ex. 4-6) 86
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Part II - Planning 11. Escalation of commitment is the tendency for people to base judgments of probability on things with which they have had experience with in the past. (False; Moderate; p. 129) 12. In the rational decision making process, a manager evaluates each alternative by appraising it against what he or she expects to gain from the situation. (False; Moderate; p. 122) 13. Intrinsic task motivation is the desire to work on a task or problem because it is interesting, challenging stimulating, and financially rewarding. (False; Challenging; p. 126) 14. In many cases, managers engage in escalation of commitment in order to show that their initial decision was correct even though they did not get the outcome they expected. (True; Challenging; p. 129) 15. An assumption of rational decision-making is that all alternatives and consequences can be clearly assessed by the decision-maker. (True; Challenging; p. 124) 16 Escalation of commitment occurs when decisions must be made with limited information because decision makers do not have full knowledge and cannot determine even a reasonable probability of alternative outcomes. (False; Challenging; p. 129)
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This note was uploaded on 12/31/2009 for the course FSD FSD taught by Professor Vinh during the Spring '09 term at ITT Tech Flint.

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@Foundations of Decision Making - Part II - Planning...

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