OAM 330 MIDTERM QUESTIONS AND VERIFIED
ANSWERS
organizational behavior - Answers - a systematic study of how people act in
organizations
goals of organizational behavior - Answers - to understand and predict how people will
behave
rational decision making model - Answers - Describes a series of steps if goal is to
maximize outcome and make the best choice
advantages of rational decision making model - Answers - Establishes decision criteria
(parameters) and generates alternatives
disadvantages of rational decision making model - Answers - Too much information and
too many
choices can lead to analysis paralysis; people have biases and may not be aware of all
possible choices
intuitive decision making model - Answers - Arriving at decisions without
conscious reasoning
▪ Only one option is considered at a time
▪ Workable solution --> action
bounded rationality model - Answers - Decision makers have a tendency to satisfice:
Limit their options to a manageable set and choose the first "good enough" option
heuristics - Answers - mental shortcuts
cognitive biases - Answers - overreliance on heuristics; errors in perception that lead to
faulty decision-making
bias - Answers - tendency for people to over- or under-estimate the true parameter
availability bias - Answers - • Information that is more readily available (that we are
more frequently exposed to) is viewed as more likely to occur
• Events that are emotional, vivid, or more
easily imagined tend to be more available in our memory
representativeness bias - Answers - • Tendency to assess an event as more likely to
occur based on our own stereotypes
, • Representativeness is largely based on personal experience or familiarity with a
situation
• People tend to disregard or ignore potentially relevant information (Sample sizes, base
rates, etc.)
anchoring and adjustment bias - Answers - • Tendency to rely too heavily on an initial
figure and failing to adjust sufficiently
• Occurs even when numbers are arbitrary or irrelevant
• People are not good at perceiving things in absolute terms
framing bias - Answers - • Tendency to be influenced by the way problems are
presented
• Occurs due to loss aversion: people are more sensitive to losses than gains
• When problems are framed as losses, people tend to engage in riskier behavior to try
and avoid the pain of dealing with a loss
confirmation bias - Answers - • Tendency to process and analyze information that
supports one's preexisting ideas or beliefs
• Occurs because people tend to be ego-affirming
escalation of commitment bias - Answers - • When people continue on a failing course
of action after information reveals this maybe a poor path to follow
• Occurs because people don't want to admit they were wrong
sunk cost fallacy - Answers - People are reluctant to abandon decisions they've already
invested significant time, resources, or energy into
hindsight bias - Answers - • When people look at the past and judge a mistake that was
made as if it should have been recognized in the moment
• Once we know the outcome, it is harder to imagine how someone would have acted
without such knowledge
correlation and causality bias - Answers - • When people confuse an association
between two events as a "cause and effect" relationship
• People mistakenly believe "because X,
therefore Y"
remedies to biases - Answers - awareness & training
think from a 3rd person perspective
play devil's advocate
when is rational decision making best? - Answers - important, long-term decisions
when is intuitive decision making best? - Answers - when analysis paralysis would be
costly
ANSWERS
organizational behavior - Answers - a systematic study of how people act in
organizations
goals of organizational behavior - Answers - to understand and predict how people will
behave
rational decision making model - Answers - Describes a series of steps if goal is to
maximize outcome and make the best choice
advantages of rational decision making model - Answers - Establishes decision criteria
(parameters) and generates alternatives
disadvantages of rational decision making model - Answers - Too much information and
too many
choices can lead to analysis paralysis; people have biases and may not be aware of all
possible choices
intuitive decision making model - Answers - Arriving at decisions without
conscious reasoning
▪ Only one option is considered at a time
▪ Workable solution --> action
bounded rationality model - Answers - Decision makers have a tendency to satisfice:
Limit their options to a manageable set and choose the first "good enough" option
heuristics - Answers - mental shortcuts
cognitive biases - Answers - overreliance on heuristics; errors in perception that lead to
faulty decision-making
bias - Answers - tendency for people to over- or under-estimate the true parameter
availability bias - Answers - • Information that is more readily available (that we are
more frequently exposed to) is viewed as more likely to occur
• Events that are emotional, vivid, or more
easily imagined tend to be more available in our memory
representativeness bias - Answers - • Tendency to assess an event as more likely to
occur based on our own stereotypes
, • Representativeness is largely based on personal experience or familiarity with a
situation
• People tend to disregard or ignore potentially relevant information (Sample sizes, base
rates, etc.)
anchoring and adjustment bias - Answers - • Tendency to rely too heavily on an initial
figure and failing to adjust sufficiently
• Occurs even when numbers are arbitrary or irrelevant
• People are not good at perceiving things in absolute terms
framing bias - Answers - • Tendency to be influenced by the way problems are
presented
• Occurs due to loss aversion: people are more sensitive to losses than gains
• When problems are framed as losses, people tend to engage in riskier behavior to try
and avoid the pain of dealing with a loss
confirmation bias - Answers - • Tendency to process and analyze information that
supports one's preexisting ideas or beliefs
• Occurs because people tend to be ego-affirming
escalation of commitment bias - Answers - • When people continue on a failing course
of action after information reveals this maybe a poor path to follow
• Occurs because people don't want to admit they were wrong
sunk cost fallacy - Answers - People are reluctant to abandon decisions they've already
invested significant time, resources, or energy into
hindsight bias - Answers - • When people look at the past and judge a mistake that was
made as if it should have been recognized in the moment
• Once we know the outcome, it is harder to imagine how someone would have acted
without such knowledge
correlation and causality bias - Answers - • When people confuse an association
between two events as a "cause and effect" relationship
• People mistakenly believe "because X,
therefore Y"
remedies to biases - Answers - awareness & training
think from a 3rd person perspective
play devil's advocate
when is rational decision making best? - Answers - important, long-term decisions
when is intuitive decision making best? - Answers - when analysis paralysis would be
costly
