Principles of Management Chapter 2 Test Bank and Solutions 2025/ 2026 Complete Guide on Management Theories and Organizational Behavior

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Chapter 2 MANAGERIAL DECISION-MAKING


TRUE-FALSE QUESTIONS

Title: ANSWER: T REFERENCE: Overview of Managerial Decision-Making LEARNING OUTCOME: 1
1. Effective managers recognize that given the complexity of many tasks, some failures are inevitable.
a. True
b. False

Title: ANSWER: T REFERENCE: Overview of Managerial Decision-Making LEARNING OUTCOME: 1
2. Maximizing shareholder wealth is often a short-sighted decision because it can harm the organization’s
financial viability in the future.
a. True
b. False

Title: ANSWER: F REFERENCE: How the Brain Processes Information to Make Decisions: Reflective and
Reactive Systems LEARNING OUTCOME: 2
3. Research finds that the logical, analytical route always leads to superior decisions.
a. True
b. False

Title: ANSWER: F REFERENCE: How the Brain Processes Information to Make Decisions: Reflective and
Reactive Systems LEARNING OUTCOME: 2
4. Effective decision-making relies on logic and not emotions.
a. True
b. False

Title: ANSWER: T REFERENCE: Programmed and Nonprogrammed Decisions LEARNING OUTCOME: 3
5. For programmed decisions, managers often develop heuristics, or mental shortcuts, to help reach a
decision.
a. True
b. False

Title: ANSWER: F REFERENCE: Programmed and Nonprogrammed Decisions LEARNING OUTCOME: 3
6. With programmed decisions, information is more likely to be ambiguous, and the manager may need to
exercise some thoughtful judgment and creative thinking to reach a good solution.
a. True
b. False

Title: ANSWER: F REFERENCE: Programmed and Nonprogrammed Decisions LEARNING OUTCOME: 3
7. The final step in the decision making process is to select an alternative.
a. True
b. False

Title: ANSWER: T REFERENCE: Barriers to Effective Decision-Making LEARNING OUTCOME: 4
8. Process conflict refers to conflict about the best way to do something as individuals explore various
options together in order to identify superior solutions.
a. True

, Principles of Management


b. False

Title: ANSWER: F REFERENCE: Barriers to Effective Decision-Making LEARNING OUTCOME: 4
9. Time pressures causes managers to neglect heuristics and engage in deep processing for decision
making.
a. True
b. False

Title: ANSWER: F REFERENCE: Improving the Quality of Decision-Making LEARNING OUTCOME: 5
10. When satisficing, a decision maker selects the best solution.
a. True
b. False

Title: ANSWER: T REFERENCE: Improving the Quality of Decision-Making LEARNING OUTCOME: 5
11. With evidence-based decision-making, managers are encouraged to rely on data and information
rather than their intuition.
a. True
b. False

Title: ANSWER: F REFERENCE: Improving the Quality of Decision-Making LEARNING OUTCOME: 5
12. Ad hominem fallacy refers to “If we have always done it one particular way, that must be the right or
best way.”
a. True
b. False

Title: ANSWER: T REFERENCE: Group Decision-Making LEARNING OUTCOME: 6
13. An advantage to involving groups in decision-making is that you can incorporate different perspectives
and ideas.
a. True
b. False

Title: ANSWER: T REFERENCE: Group Decision-Making LEARNING OUTCOME: 6
14. In order to reduce groupthink, groups can assign a member to play the devil’s advocate.
a. True
b. False

Title: ANSWER: F REFERENCE: Group Decision-Making LEARNING OUTCOME: 6
15. Brainstorming occurs when group members choose not to voice their concerns or objections because
they would rather keep the peace and not annoy or antagonize others.
a. True
b. False




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April 30, 2019 2