MGT101 Tutorial 4 - Lecture 4: Decision Making (Qs)

I: MCQs Practice

1. Which of the following means that a decision has clear-cut goals and that good information is
available, but the future outcomes associated with each alternative are subject to chance?
a. Certainty
b. Risk
c. Uncertainty
d. Ambiguity
e. Brainstorming

2. ____ means that managers know which goals they wish to achieve, but information about alternatives
and future events is incomplete.
a. Certainty
b. Risk
c. Uncertainty
d. Ambiguity
e. Advocacy

3. Bobby, a product manager, wants to increase the market share of his product. He is unsure about how
to go about it, not knowing for sure how costs, price, the competition, and the quality of his product
will interact to influence market share. Bobby is operating under a condition of
a. risk.
b. ambiguity.
c. certainty.
d. uncertainty.
e. brainstorming.

4. Which of the following means that the goals to be achieved or the problem to be solved is unclear,
alternatives are difficult to define, and information about outcomes is unavailable?
a. Certainty
b. Risk
c. Uncertainty
d. Ambiguity
e. Brainstorming

5. The classical model of decision making is based on ____ assumptions.

a. philosophical
b. irrational
c. economic
d. uncertainty
e. technological

6. Riley is a manager at the Tinker Tools. She is expected to make decisions that are in the
organization's best economic interests. Her decisions should be based on which of the following
models?
a. The administrative model of decision making
b. The garbage can model of decision making
c. The scientific management model of decision making
d. The classical model of decision making
e. The humanistic model of decision making

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 7. Which approach defines how a decision-maker should make decisions?
a. normative
b. scientific
c. descriptive
d. reflective
e. humanistic
8. Which model of decision making is associated with satisficing, bounded rationality, and uncertainty?
a. classical
b. administrative
c. quantitative
d. rational
e. political

9. The ____ model of decision making describes how managers actually makes decisions in situations
characterized by nonprogrammed decisions, uncertainty, and ambiguity.
a. normative
b. classical
c. administrative
d. scientific management
e. objective

10. The concept that people have the time and cognitive ability to process only a limited amount of
information on which to base decisions is known as
a. satisficing.
b. bounded rationality.
c. classical model of decision making.
d. normative approach.
e. scientific approach.

11. The essence of ____ is to choose the first solution available.

a. bounded rationality
b. creativity
c. decision maximization
d. satisficing
e. the classical model of decision making

12. Melissa is a manager at InStylez Clothing. Her job is very complex and she feels that she does not
have enough time to identify and/or process all the information she needs to make decisions. Melissa's
situation is most consistent with which of the following concepts?
a. Bounded rationality
b. The classical model of decision making
c. Satisficing
d. Brainstorming
e. Scientific management

13. The ____ model closely resembles the real environment in which most managers and decision-makers
operate.
a. normative
b. administrative
c. descriptive

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 d. classical
e. political
II: Short Answer/Essay Questions
1. List and describe the four basic assumptions of the political model (Short Answer)
- Organizations are made up of groups with diverse interests, goals, and values. Managers disagree
about problem priorities and may not understand or share the goals and interests of other
managers.
- Information is ambiguous and incomplete. The attempt to be rational is limited by the complexity
of many problems, as well as personal and organizational constraints.
- Managers do not have the time, resources, or mental capacity to identify all dimensions of the
problem and process all relevant information. Managers talk to each other and exchange viewpoints
to gather information and reduce ambiguity.
- Managers engage in the push and pull of debate to decide goals and discuss alternatives. Decisions
are the result of bargaining and discussion among coalition members.
2. Compare decision conditions of certainty, risk, uncertainty, and ambiguity (Short Answer)

- Decisions made under the condition of certainty have a high possibility of success. All of the
information that the decision-maker needs is available. The decision-maker knows the
alternatives, the objectives, and the outcomes. Risk is a situation where the decision-maker
knows the alternatives and the objectives. However the outcomes are not known with
certainty, but the probabilities of the outcomes are known. under conditions of uncertainty,
the decision-maker does not know the probabilities of the outcomes, while she knows some
of the alternatives and the objectives. with ambiguity, the objectives are unclear,
alternatives are difficult to define, and information about outcomes is incomplete or
unavailable.

3. Differentiate the rationality model of decision making, bounded rationality (Administrative) model
from political model (Essay)

Features Classical (Rational) Bounded Political Model

(Administrative)
Rationality
Nature of Problem Clear cut problem & Vague problems & goals Pluralistic; conflicting
goal goals
Conditions of DM Certainty= (elaborate) Uncertainty (elaborate) Uncertainty (elaborate)&
Ambiguity (elaborate)
Choices Full information about Limited information Inconsistent ambiguous
alternatives about alternatives information and
viewpoints about
alternatives
Outcomes Maximise outcomes Satisficing, may not be Bargaining & discuss 
the best solution coalition building

III: Case Study

HP’s Tough Decision (Tutorial 4 Appendix)
Case Study Questions:
(a). What do you think about Meg Whitman’s decision to keep the PC business at HP? Would you
have made the same decision?

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(b). Using the rational decision-making process, evaluate Whitman’s decision. In other words, what
was the existing the problem, what were the possible alternatives, etc?
(c). How would you characterise the scope of Whitman’s decision? What levels of management were
affected? Finally, should Whitman have used consensus in making her choice? Why or why not?

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