Managerial Decision Making Exam Questions and Correct Answers Latest Update (100% Pass)
Decision making - Answers process through which managers identify and resolve problems and
capitalize on opportunities
Problem - Answers a situation in which some aspect of organizational performance is less than desirable
Opportunity - Answers situation that has the potential to provide additional beneficial outcomes
Steps in decision making process - Answers 1. identify opportunities and diagnosing problems
2. identifying objectives
3. generating alternatives
4. evaluating alternatives
5. reaching decisions
6. choosing implementation strategies
7. monitoring and evaluating
Identifying Opportunities and diagnosing problems - Answers decision makers must know where action
is required. The first step in decision making process is the clear identification of opportunities or the
diagnosis of problems that require a decision.
Identifying objectives - Answers Objectives reflect the results the organization wants to attain. Objective
is the desired result to be attained when making decisions.
Generating Alternatives - Answers once an opportunity has been identified or a problem diagnosed,
managers develop various ways to solve the problem and achieve objectives. Alternatives: a strategy
that might be implemented in decision making situation.
Evaluating Alternatives - Answers this step involves determining the adequacy and value of the
alternatives. which solution is best? Ability to assess the advantages and disadvantages of each
alternative
Reaching Decisions - Answers Making a final choice
Choosing Implementation strategies - Answers keys to effective implementation:
1. sensitivity to those who will be affected by the decision
2. proper planning and consideration of the resources necessary to carry out the decision.
, Monitoring and evaluating feedback - Answers decision making process is complete when the impact of
decisions have been evaluated. managers must obtain the impact of the decision as objectively as
possible.
Models of decision making - Answers 1. rational economic decision model
2. behavioral decision model
Rational-economic model - Answers 1. Prescriptive model- suggests how decisions SHOULD be made.
2. Basic Premise: decision making will be rational, systematic, and logical.
3. Assumes the decision maker: -has "perfect" information; -operates to accomplish objectives that are
known and agreed on and has extensive list of alternatives to choose from; -work for organizations best
interest; - no ethical dilemmas arise in the decision making process.
Behavioral Model - Answers 1. Descriptive Model- suggests how decisions are actually made.
(descriptive framework for understanding that a persons cognitive ability to process information is
limited)
2. Basic premise: human limitations make rational decision making difficult to achieve.
3. Accompanying Assumptions:
-Bounded rationality affects decision making process.
-Experience-based intuition will affect the decision making process.
-Decision makers will accept a satisfying decision.
-Escalation of commitment may occur.
Behavioral Decision Model: Bounded Rationality - Answers this notion recognizes that people cannot
know everything; they are limited by such organizational constraints as time, information, resources,
and their own mental capacities.
Behavioral Decision Model: Intuition - Answers An unconscious analysis based on past experience
Behavioral Decision Model: Satisficing - Answers The search for and acceptance of something that is
satisfactory rather than perfect or optimal.
Behavioral Decision Model: Escalation of Commitment - Answers the tendency to increase commitment
to a previously selected course of action beyond the level that would be expected if the manager
followed and effective decision making process.
Participative Model: Vroom and Yetton Model - Answers 1.Helps managers determine when group
decision making is appropriate.
Decision making - Answers process through which managers identify and resolve problems and
capitalize on opportunities
Problem - Answers a situation in which some aspect of organizational performance is less than desirable
Opportunity - Answers situation that has the potential to provide additional beneficial outcomes
Steps in decision making process - Answers 1. identify opportunities and diagnosing problems
2. identifying objectives
3. generating alternatives
4. evaluating alternatives
5. reaching decisions
6. choosing implementation strategies
7. monitoring and evaluating
Identifying Opportunities and diagnosing problems - Answers decision makers must know where action
is required. The first step in decision making process is the clear identification of opportunities or the
diagnosis of problems that require a decision.
Identifying objectives - Answers Objectives reflect the results the organization wants to attain. Objective
is the desired result to be attained when making decisions.
Generating Alternatives - Answers once an opportunity has been identified or a problem diagnosed,
managers develop various ways to solve the problem and achieve objectives. Alternatives: a strategy
that might be implemented in decision making situation.
Evaluating Alternatives - Answers this step involves determining the adequacy and value of the
alternatives. which solution is best? Ability to assess the advantages and disadvantages of each
alternative
Reaching Decisions - Answers Making a final choice
Choosing Implementation strategies - Answers keys to effective implementation:
1. sensitivity to those who will be affected by the decision
2. proper planning and consideration of the resources necessary to carry out the decision.
, Monitoring and evaluating feedback - Answers decision making process is complete when the impact of
decisions have been evaluated. managers must obtain the impact of the decision as objectively as
possible.
Models of decision making - Answers 1. rational economic decision model
2. behavioral decision model
Rational-economic model - Answers 1. Prescriptive model- suggests how decisions SHOULD be made.
2. Basic Premise: decision making will be rational, systematic, and logical.
3. Assumes the decision maker: -has "perfect" information; -operates to accomplish objectives that are
known and agreed on and has extensive list of alternatives to choose from; -work for organizations best
interest; - no ethical dilemmas arise in the decision making process.
Behavioral Model - Answers 1. Descriptive Model- suggests how decisions are actually made.
(descriptive framework for understanding that a persons cognitive ability to process information is
limited)
2. Basic premise: human limitations make rational decision making difficult to achieve.
3. Accompanying Assumptions:
-Bounded rationality affects decision making process.
-Experience-based intuition will affect the decision making process.
-Decision makers will accept a satisfying decision.
-Escalation of commitment may occur.
Behavioral Decision Model: Bounded Rationality - Answers this notion recognizes that people cannot
know everything; they are limited by such organizational constraints as time, information, resources,
and their own mental capacities.
Behavioral Decision Model: Intuition - Answers An unconscious analysis based on past experience
Behavioral Decision Model: Satisficing - Answers The search for and acceptance of something that is
satisfactory rather than perfect or optimal.
Behavioral Decision Model: Escalation of Commitment - Answers the tendency to increase commitment
to a previously selected course of action beyond the level that would be expected if the manager
followed and effective decision making process.
Participative Model: Vroom and Yetton Model - Answers 1.Helps managers determine when group
decision making is appropriate.
