Principles of Management

Chapter 4 Homework questions

Student Name _____________________________________________

Student I.D._______________________________Section: _________

THE DECISION-MAKING PROCESS

Decisions, Decisions (Scenario)

Sondra needed help. Her insurance company’s rapid growth was necessitating making
some changes, but what changes? Should they add to the existing information system or
should they buy a new system? She was given the responsibility of analyzing the
company’s present information system and deciding what the company should do that
would give them plenty of room. She was confused and needed help in making the
correct decision.

1. According to the decision-making process, the first step Sondra should take is to
_____________.
a. analyze alternative solutions
b. identify decision criteria
c. evaluate her decision’s effectiveness
d. identify the problem

2. According to the decision-making process, the second step Sondra should take is to
____________.
a. analyze alternative solutions
b. identify decision criteria
c. evaluate her decision’s effectiveness
d. allocate weights to the criteria

3. Allocating weights to the criteria is the step in the decision-making process that
occurs between identifying the decision criteria and ______________.
a. developing the alternatives
b. selecting alternatives
c. implementing the alternative
d. identifying the problem
4. When Sondra is conveying her decision to those affected and getting their
commitment to it, she is performing which step in the decision-making process?
a. analyzing alternative solutions
b. selecting alternatives
c. implementing the alternative
d. identifying the problem

5. The very last step Sondra should take, according to the decision-making process, is to
__________.
a. analyze alternative solutions
b. select alternatives
c. implement the alternative
d. evaluate the decision’s effectiveness

The Car (Scenario)

Colleen is a student, and her older brother has loaned her an old car. The car is in need of
several repairs before she will feel comfortable driving it.

1. Colleen needs a vehicle, but she has to decide if the vehicle is worth repairing. She is
facing a(n) _____________, a discrepancy between an existing and a desired state of
affairs.
a. alternative
b. weighted problem set
c. problem
d. certainty avoidance situation

2. In talking with an automotive repair person, Colleen needs to prioritize the repairs.
Her first concern is safety of the vehicle. This step in the decision-making process is
called __________________.
a. weighting the decision criteria
b. analyzing of alternatives
c. identifying decision criteria
d. selecting an alternative
The First Job (Scenario)

Upon graduation, you search for a job with the university’s job placement center.
Although you have studied and prepared to work in an advertising agency, the first job
that you are offered is a supervisor in a manufacturing company working the afternoon
shift from 3:00 P.M. until 11:00 P.M.

1. If you had made a larger search using the Internet and other employment search
processes, you might have been able to find more employment opportunities.
This would have been a more _________ decision-making process.
a. nonprogrammable
b. uncertain
c. risky
d. perfectly rational

2. Under bounded rationality, you would be expected to search for a job by

________________.
a. looking at all the opportunities that can be analyzed in the time
available
b. looking at all the opportunities available
c. looking “outside the box” in your search
d. analyzing all the opportunities until you find the perfect job

3. If you use a shortened process of searching for a job, it is likely that you
___________ rather than maximized in your decision process.
a. minimized
b. rationalized
c. satisficed
d. agreed

4. During your job search, you depend on __________ decision making by making your
decision based on accumulated judgment and experience.
a. experiential
b. legal
c. intuitive
d. formidable
Is the Picture Clear? (Scenario)

Sharon was the regional manager of a large cable television company. She faced many
problems and decisions daily, such as how to price each market, who to hire, what kind
of technology she should purchase, and how she should handle the increasing customer
complaints. She needed some help sorting these issues out.

1. When a customer calls and requests a refund for a partial month’s usage of cable, the
fact that such situations are routine and most likely have a standard response would
make the response a ______________ decision.
a. standard
b. routine
c. policy
d. programmed

2. Sometimes Sharon follows a ______________, a series of interrelated sequential

steps for responding to a structured problem.
a. rule
b. policy
c. procedure
d. suggestion

3. Sometimes Sharon instructs her local managers to follow ______________ when

confronted with problem situations. These establish parameters for the manager
making the decision rather than specifically stating what should or should not be
done.
a. rules
b. procedures
c. policies
d. orders

4. Unfortunately, Sharon also faces issues containing information that is ambiguous or

incomplete, such as what kind of technology to purchase. These are known as
______________ problems.
a. unstructured
b. variable
c. random
d. hit-and-miss
Managing Your Career (Scenario)

Michelle has a new job and is learning to perform the tasks assigned to her. Different
situations demand different decision-making processes.

1. Michelle finds a situation that instructs her in specific, interrelated, sequential

steps to respond to a problem. This is referred to as a _____________.
a. rule
b. policy
c. broad guideline
d. procedure

2. Michelle finds a company directive that specifically restricts her from taking certain
actions. This is a _____________.
a. rule
b. policy
c. broad guideline
d. procedure

3. As she learns the general guidelines of the job, Michelle is given more decision-
making authority. The guidelines establish parameters for decision making and are
referred as a _____________.
a. rule
b. policy
c. broad guideline
d. procedure

4. Michelle eventually finds a problem that has no cut-and-dry solution. The

problem is unique and will never occur again. This problem is referred to as
_____________.
a. flexible
b. programmed
c. adaptable
d. nonprogrammed
Decision-Making Conditions (Scenario)

Sandy Jo is the manager for TrucksRUs, a medium-sized hauling service located in the
Southeast. She is responsible for scheduling trucks, initiating new routes, and staffing
both existing and new routes. She is currently struggling with existing information about
the profitability of existing and future truck routes.

1. Sandy Jo can make accurate decisions if she is willing to pay $5,000 for research
about the profitability of various truck routes. If she pays for the research, she
believes that she is operating under a condition of ____________.
a. certainty
b. risk
c. uncertainty
d. maximax

2. Joe, Sandy Jo’s best driver, tells her that he believes he can estimate that there is a 75
percent probability that they can get the business of Pork Brothers, Inc., if they
initiate a truck route through rural North Carolina. Joe is operating under a condition
of ______________.
a. certainty
b. risk
c. uncertainty
d. maximax

Essay Questions.

1) a) Define what is a decision.

 b) Discuss the steps in the decision making process.

2) Name the two categories of decisions and explain the difference between the two
with examples.
3) It is said that certainty, risk & ambiguity play a major part in finding
organizational solution . Evaluate this statement.

4) Briefly discuss what is meant by a procedure, a rule, a policy.

5) a) List different types of decision styles

b) Describe any two of these styles.

6) a) What is the difference between a structured and unstructured
problem.

b) What types of decision would one take in order to address these

problems.