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) Which of the following statements best describes the business value of improved decision making? A) Improved decision making creates better products. B) Improved decision making results in a large monetary value for ...

) Which of the following statements best describes the business value of improved decision making? A) Improved decision making creates better products. B) Improved decision making results in a large monetary value for the firm as numerous small daily decisions affecting efficiency, production, costs, and more add up to large annual values. C) Improved decision making enables senior executives to more accurately foresee future financial trends. D) Improved decision making strengthens customer and supplier intimacy, which reduces costs. E) Improved decision making creates a better organizational culture. Answer: B Difficulty: Challenging AACSB: Analytical thinking LO: 12-1: What are the different types of decisions, and how does the decision-making process work? 2) When there is no well-understood or agreed-on procedure for making a decision, it is said to be: A) undocumented. B) unstructured. C) documented. D) semi-structured. E) ad-hoc. Answer: B Difficulty: Moderate AACSB: Reflective thinking LO: 12-1: What are the different types of decisions, and how does the decision-making process work? 3) If you can follow a definite procedure to make a business decision, you are making a(n) ________ decision. A) ad-hoc B) procedural C) unstructured D) semi-structured E) structured Answer: E Difficulty: Moderate AACSB: Reflective thinking LO: 12-1: What are the different types of decisions, and how does the decision-making process work? 1 4) Which type of decision is calculating gross pay for hourly workers? A) Semi-structured B) Procedural C) Structured D) Unstructured E) Ad hoc Answer: C Difficulty: Moderate AACSB: Analytical thinking LO: 12-1: What are the different types of decisions, and how does the decision-making process work? 5) Which type of decision is deciding whether to introduce a new product line? A) Structured B) Unstructured C) Recurring D) Nonrecurring E) Procedural Answer: B Difficulty: Moderate AACSB: Analytical thinking LO: 12-1: What are the different types of decisions, and how does the decision-making process work? 6) The decision to approve a capital budget is an example of a(n) ________ decision. A) structured B) ad hoc C) semi-structured D) undocumented E) unstructured Answer: E Difficulty: Moderate AACSB: Analytical thinking LO: 12-1: What are the different types of decisions, and how does the decision-making process work? 2 7) The decisions involved in creating and producing a corporate intranet can be classified as ________ decisions. A) semi-structured B) procedural C) ad hoc D) structured E) unstructured Answer: A Difficulty: Moderate AACSB: Analytical thinking LO: 12-1: What are the different types of decisions, and how does the decision-making process work? 8) Checking store inventory is an example of a(n) ________ decision. A) procedural B) structured C) ad hoc D) unstructured E) semi-structured Answer: B Difficulty: Moderate AACSB: Analytical thinking LO: 12-1: What are the different types of decisions, and how does the decision-making process work? 9) The ________ phase of decision making finds or recognizes a problem, need, or opportunity. A) choice B) design C) implementation D) analysis E) intelligence Answer: E Difficulty: Easy AACSB: Reflective thinking LO: 12-1: What are the different types of decisions, and how does the decision-making process work? 3 10) Which of the following is not one of the Simon's four stages of decision making? A) Implementation B) Intelligence C) Analysis D) Choice E) Design Answer: C Difficulty: Moderate AACSB: Reflective thinking LO: 12-1: What are the different types of decisions, and how does the decision-making process work? 11) Improving the quality of high-value decision making by an executive will save an organization far more money than improving the quality of lesser-value decisions made at a lower level. Answer: FALSE Difficulty: Moderate AACSB: Information technology LO: 12-1: What are the different types of decisions, and how does the decision-making process work? 12) A structured decision cannot be made by following a well-defined set of procedures. "Feel" or intuition is necessary. Answer: FALSE Difficulty: Easy AACSB: Reflective thinking LO: 12-1: What are the different types of decisions, and how does the decision-making process work? 13) Structured decision making is most prevalent at lower organizational levels. Answer: TRUE Difficulty: Easy AACSB: Reflective thinking LO: 12-1: What are the different types of decisions, and how does the decision-making process work? 14) The design phase of decision making consists of discovering, identifying, and understanding the problems occurring in the organization. Answer: FALSE Difficulty: Easy AACSB: Reflective thinking LO: 12-1: What are the different types of decisions, and how does the decision-making process work? 4 15) The choice phase of Simon's decision-making model includes choosing among solution alternatives. Answer: TRUE Difficulty: Moderate AACSB: Reflective thinking LO: 12-1: What are the different types of decisions, and how does the decision-making process work? 16) The first stage in Simon's decision-making process model is the design stage. Answer: FALSE Difficulty: Moderate AACSB: Reflective thinking LO: 12-1: What are the different types of decisions, and how does the decision-making process work? 17) A structured decision is repetitive and routine, for which known procedures provide solutions. Answer: TRUE Difficulty: Easy AACSB: Reflective thinking LO: 12-1: What are the different types of decisions, and how does the decision-making process work? 18) The third stage in Simon's description of decision making is implementation. Answer: FALSE Difficulty: Moderate AACSB: Reflective thinking LO: 12-1: What are the different types of decisions, and how does the decision-making process work? 5 19) In your position of office manager at a legal firm, you are in charge of hiring temporary legal assistants and clerical workers. Describe how Simon's decision-making process applies to this decision. Could that decision be aided by an information system in any way, and if so, how? Answer: The decision-making process is: 1. Intelligence, or problem discovery: How many temps need to be hired, for how long, and what skills would they need? 2. Design, or solution discovery: What temp agencies are available and what are their prices? 3. Choice, or choosing solutions: Evaluate the offerings of the temp agencies, and evaluate the abilities of temps as per need. 4. Implementation, or solution testing: Evaluate the work of each temp against assignments and other needs. An information system that displayed the temps available for hire along with pertinent information such as rate, and past assignments and evaluations would help in this process. Difficulty: Moderate AACSB: Analytical thinking LO: 12-1: What are the different types of decisions, and how does the decision-making process work? 20) You are the CIO at an insurance firm and a manager has proposed implementing expensive new project management software that would help increase the efficiency of the IT staff. The idea of improved efficiency sounds good, but is there any way you can evaluate her decision before purchasing the software? Be specific. Answer: Student answers will vary but should utilize the steps of the decision-making process and/or the qualities of decisions as a means of evaluation. A sample answer is: Yes, you can ask the manager to describe her decision-making process and evaluate the decision according to the steps she has taken. For example, how was she able to identify efficiency as a problem that needed solving? Is it the most pressing problem? What were the various solutions considered to the problem and what criteria did she choose to evaluate them? You can also evaluate the manager's decision according to the various qualities of decision making: Accuracy (does the decision reflects reality?), comprehensiveness: (does the decision reflects a full consideration of the facts and circumstances?), fairness (does the decision faithfully reflects the concerns and interests of affected parties?), speed (is the decision making efficient with respect to time and other resources?), coherence (does the decision reflects a rational process that can be explained to others and made understandable?), and due process (is the decision the result of a known process and can it be appealed to a higher authority?). Difficulty: Challenging AACSB: Analytical thinking; Written and oral communication LO: 12-1: What are the different types of decisions, and how does the decision-making process work? 6 21) What are managerial roles and what are the three main categories of managerial roles? Answer: Managerial roles are expectations of the activities that managers should perform. The three main categories of managerial roles are interpersonal, informational, and decisional. Interpersonal roles involve representing companies and performing symbolic duties, while also acting as liaisons between other levels of the firm. Informational roles require the distribution of information to those who need to have it. Decisional roles require the initiation of new activities and the handling of disturbances within the organization, as well as mediation of conflicts. Difficulty: Moderate AACSB: Analytical thinking; Written and oral communication LO: 12-1: What are the different types of decisions, and how does the decision-making process work? 22) Describe high-velocity automated decision making and its dangers. Answer: High-velocity automated decision making is a class of decisions that are highly structured and performed in a manner of milliseconds, like a Google search or an automated stock trade. The danger of these types of decisions is that they are made faster than a manager can supervise or control, so mistakes can be disastrous. For example, Knight Capital lost $440 million due to trades made in error by automated systems. Human beings who write the software enabling these types of decisions must be careful to ensure that the systems operate properly. Difficulty: Challenging AACSB: Analytical thinking; Written and oral communication LO: 12-1: What are the different types of decisions, and how does the decision-making process work?