OAM 330 MIDTERM EXAM QUESTIONS AND VERIFIED
ANSWERS
What is Organizational Behavior? - Answers - a systematic study of how people act in
organizations
what are the goals of organizational behavior? - Answers - to be able to :
1. understand why people behave
2. predict how they will behave
What is decision making? - Answers - refers to selecting choices among alternative
courses of action, which may also include inaction
note: decisions are not just made at the top but by every employee that is part of an
organization
what are three kinds of decision making models? - Answers - 1. rational decision
making model
2. intuitive decision making model
3. bounded rationality model
what are the steps for rational decision making? - Answers - 1. identify the problem
2. establish decision criteria
3. weigh decision criteria
4. generate alternatives
5. evaluate the alternatives
6. choose the best alternative
7. implement the decision
8. evaluate the decision
what are the advantages of rational decision making? - Answers - 1. establishes clear
criteria for how options should be evaluated
2. urges decision makers to generate an exhaustive set of alternatives
what are some assumptions about rational decision making? - Answers - 1. that people
know all their available choices
2. that people want to make the optimal decision
3. that people have NO COGNITIVE BIASES
what is intuitive decisions making? - Answers - - arriving at decisions without conscious
reasoning
- decisions are NOT MADE between a list of well thought-out alternatives
* make a decision based on gut feeling*
,what is bounded rationality model? - Answers - - recognizes the limitations of decision-
making processes
extra:
- individuals knowingly LIMIT their options to a manageable set
- individuals choose the first acceptable alternative
what is satisficing? (under bounded rationality model) - Answers - - accepting the first
alternative that meets your minimum criteria
what is the upside to satisficing? - Answers - - we tend to save cognitive time and effort
extra:
- people tend to rely on HEURISTICS which allows us to make decisions quickly
what are heuristics? - Answers - mental shortcuts or rules of thumb
what is the downside to satisficing? - Answers - over reliance on heuristics can result in
COGNITIVE BIASES
what are cognitive biases? - Answers - are ERRORS in perception that result in faulty
decision making
- people fall into predictable decision making traps due to an over reliance on
HEURISTICS or GUT INSTINCT
- biases lead pole to have DISTORTED picture or INACCURATE understanding of the
environment
what are biases? - Answers - biases refers to a tendency for people to OVER (OR
UNDER) ESTIMATE the true parameter
what is availability bias? - Answers - - situation in which information that is READILY
AVAILABLE is viewed as MORE LIKELY to occur
- events that are emotional, vivid, or more easily imagined also tend to be more
available in our memory
what is conjunction fallacy? - Answers - - people judge that two more more events
happening is more likely than one event
* in reality more likely one will happen NOT two***
what is representativeness bias? - Answers - - tendency to assess an event as MORE
LIKELY to occur based on our own STEREOTYPES
- people tend to disregard or ignore potentially relevant information
ex. sample sizes, base rates, etc.
,how is representativeness bias and availability bias different? - Answers -
representativeness is largely based on your own personal experience
what is anchoring and adjustment bias? - Answers - - refers to the tendency to rely too
heavily on an INITIAL REFERENCE POINT when making decisions and FAILING TO
ADJUST sufficiently (the initial reference point is often arbitrary and unrelated to
subject)
- people are not good at perceiving things in absolute terms (only relative terms)
what is framing bias? - Answers - refers to the tendency to be influences by THE WAY
that problems are PRESENTED?
(half full vs. half empty)
what is loss aversion? - Answers - losers tend to loom larger psychologically than gains
ex. the negative emotion of letting you out late by 5 mins > the positive emotion of
getting let out 5 mins early
what is confirmation bias? - Answers - refers to the tendency to process and analyze a
person's preexisting ideas
what is ego-affirming? - Answers - people see what they want to see
- people tend to not seek out disconfirming information or evidence by the contrary
what are the three way to change biases? - Answers - 1. awareness and training
2. check yourself and try to think from a 3rd person perspective
3. expand your information search and play devil's advocate
are heuristics a bad thing? - Answers - no, they help save us significant mental
resources, but they CAN BIAS us in our decision making
what are the different kinds of cognitive biases? - Answers - - availability
- representativeness
- anchoring and adjustment
-framing
- confirmation
what is commitment bias? - Answers - - when individuals continue on a failing course of
action AFTER information reveals this is a poor path to follow
- people don't like to admit they were wrong and continue poor course of action to rely to
save face
what is sunk cost fallacy? - Answers - continuing with decision because you've already
invested a significancy amount of time or money
what is hindsight bias? - Answers - when people LOOK AT THE PAST and JUDGE a
mistake that was made as it should've been recognized IN THE MOMENT
, - in a given moment, it is unclear what the right decision should be, but things appear
obvious after the after with the benefit of knowing what happened
what is correlation and causality bias? - Answers - confusing an ASSOCIATION or
CONNECTION between two events as a "cause and effect relationship"
ex. fires and fire trucks
what is perception? - Answers - process with how people DETECT and INTERPRET
objects or actions in the environment
what is self-perception biases? - Answers - 1. self-enhancing bias
2. self-serving bias
what is self enhancement bias? - Answers - people have a tendency to SEE
THEMSELVES MORE POSITIVELY than OTHERS actually do
- applies to abilities, performance and even ethically or morality
what is self serving bias? - Answers - people tend to attribute their SUCCESSES to
INTERNAL characteristics and FAILURES to EXTERNAL situations
what is overconfidence bias? - Answers - - people have a tendency to OVERESTIMATE
their abilities
- people also tend to consistently overestimate their abilities to PREDICT future events
what is planning fallacy? - Answers - - people often UNDERESTIMATE the amount of
time they will need to COMPLETE a future task
- occurs regardless of the individual's knowledge or familiarity with the task at hand
what is the endowment effect? - Answers - - people have a tendency for individual to
value something THEY OWN at a HIGHER VALUE than its market value
- people's positive self- concepts tend to spill over into their possessions
what are first impressions? - Answers - - INITIAL thoughts and perceptions about
people tend to be stable and have a LASTING IMPACT
- once formed, first impressions are surprisingly RESILIENT to contrary information
course evals = no different start of year to end
what is selective perception? - Answers - - we often IGNORE other parts of the
environment when we perceive OTHERS
- people have a tendency to ignore factors that might contradict their prior beliefs
we see what we want and ignore what we dont
ANSWERS
What is Organizational Behavior? - Answers - a systematic study of how people act in
organizations
what are the goals of organizational behavior? - Answers - to be able to :
1. understand why people behave
2. predict how they will behave
What is decision making? - Answers - refers to selecting choices among alternative
courses of action, which may also include inaction
note: decisions are not just made at the top but by every employee that is part of an
organization
what are three kinds of decision making models? - Answers - 1. rational decision
making model
2. intuitive decision making model
3. bounded rationality model
what are the steps for rational decision making? - Answers - 1. identify the problem
2. establish decision criteria
3. weigh decision criteria
4. generate alternatives
5. evaluate the alternatives
6. choose the best alternative
7. implement the decision
8. evaluate the decision
what are the advantages of rational decision making? - Answers - 1. establishes clear
criteria for how options should be evaluated
2. urges decision makers to generate an exhaustive set of alternatives
what are some assumptions about rational decision making? - Answers - 1. that people
know all their available choices
2. that people want to make the optimal decision
3. that people have NO COGNITIVE BIASES
what is intuitive decisions making? - Answers - - arriving at decisions without conscious
reasoning
- decisions are NOT MADE between a list of well thought-out alternatives
* make a decision based on gut feeling*
,what is bounded rationality model? - Answers - - recognizes the limitations of decision-
making processes
extra:
- individuals knowingly LIMIT their options to a manageable set
- individuals choose the first acceptable alternative
what is satisficing? (under bounded rationality model) - Answers - - accepting the first
alternative that meets your minimum criteria
what is the upside to satisficing? - Answers - - we tend to save cognitive time and effort
extra:
- people tend to rely on HEURISTICS which allows us to make decisions quickly
what are heuristics? - Answers - mental shortcuts or rules of thumb
what is the downside to satisficing? - Answers - over reliance on heuristics can result in
COGNITIVE BIASES
what are cognitive biases? - Answers - are ERRORS in perception that result in faulty
decision making
- people fall into predictable decision making traps due to an over reliance on
HEURISTICS or GUT INSTINCT
- biases lead pole to have DISTORTED picture or INACCURATE understanding of the
environment
what are biases? - Answers - biases refers to a tendency for people to OVER (OR
UNDER) ESTIMATE the true parameter
what is availability bias? - Answers - - situation in which information that is READILY
AVAILABLE is viewed as MORE LIKELY to occur
- events that are emotional, vivid, or more easily imagined also tend to be more
available in our memory
what is conjunction fallacy? - Answers - - people judge that two more more events
happening is more likely than one event
* in reality more likely one will happen NOT two***
what is representativeness bias? - Answers - - tendency to assess an event as MORE
LIKELY to occur based on our own STEREOTYPES
- people tend to disregard or ignore potentially relevant information
ex. sample sizes, base rates, etc.
,how is representativeness bias and availability bias different? - Answers -
representativeness is largely based on your own personal experience
what is anchoring and adjustment bias? - Answers - - refers to the tendency to rely too
heavily on an INITIAL REFERENCE POINT when making decisions and FAILING TO
ADJUST sufficiently (the initial reference point is often arbitrary and unrelated to
subject)
- people are not good at perceiving things in absolute terms (only relative terms)
what is framing bias? - Answers - refers to the tendency to be influences by THE WAY
that problems are PRESENTED?
(half full vs. half empty)
what is loss aversion? - Answers - losers tend to loom larger psychologically than gains
ex. the negative emotion of letting you out late by 5 mins > the positive emotion of
getting let out 5 mins early
what is confirmation bias? - Answers - refers to the tendency to process and analyze a
person's preexisting ideas
what is ego-affirming? - Answers - people see what they want to see
- people tend to not seek out disconfirming information or evidence by the contrary
what are the three way to change biases? - Answers - 1. awareness and training
2. check yourself and try to think from a 3rd person perspective
3. expand your information search and play devil's advocate
are heuristics a bad thing? - Answers - no, they help save us significant mental
resources, but they CAN BIAS us in our decision making
what are the different kinds of cognitive biases? - Answers - - availability
- representativeness
- anchoring and adjustment
-framing
- confirmation
what is commitment bias? - Answers - - when individuals continue on a failing course of
action AFTER information reveals this is a poor path to follow
- people don't like to admit they were wrong and continue poor course of action to rely to
save face
what is sunk cost fallacy? - Answers - continuing with decision because you've already
invested a significancy amount of time or money
what is hindsight bias? - Answers - when people LOOK AT THE PAST and JUDGE a
mistake that was made as it should've been recognized IN THE MOMENT
, - in a given moment, it is unclear what the right decision should be, but things appear
obvious after the after with the benefit of knowing what happened
what is correlation and causality bias? - Answers - confusing an ASSOCIATION or
CONNECTION between two events as a "cause and effect relationship"
ex. fires and fire trucks
what is perception? - Answers - process with how people DETECT and INTERPRET
objects or actions in the environment
what is self-perception biases? - Answers - 1. self-enhancing bias
2. self-serving bias
what is self enhancement bias? - Answers - people have a tendency to SEE
THEMSELVES MORE POSITIVELY than OTHERS actually do
- applies to abilities, performance and even ethically or morality
what is self serving bias? - Answers - people tend to attribute their SUCCESSES to
INTERNAL characteristics and FAILURES to EXTERNAL situations
what is overconfidence bias? - Answers - - people have a tendency to OVERESTIMATE
their abilities
- people also tend to consistently overestimate their abilities to PREDICT future events
what is planning fallacy? - Answers - - people often UNDERESTIMATE the amount of
time they will need to COMPLETE a future task
- occurs regardless of the individual's knowledge or familiarity with the task at hand
what is the endowment effect? - Answers - - people have a tendency for individual to
value something THEY OWN at a HIGHER VALUE than its market value
- people's positive self- concepts tend to spill over into their possessions
what are first impressions? - Answers - - INITIAL thoughts and perceptions about
people tend to be stable and have a LASTING IMPACT
- once formed, first impressions are surprisingly RESILIENT to contrary information
course evals = no different start of year to end
what is selective perception? - Answers - - we often IGNORE other parts of the
environment when we perceive OTHERS
- people have a tendency to ignore factors that might contradict their prior beliefs
we see what we want and ignore what we dont
