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Exam 2MGT (scored 92%)

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Louisiana State University
MGT 3200

EXAM 2DECISIONMAKING1Is decisionmaking a function of managementNo its a part of all functionsMost closely associated w planning2Why do we make decisions as managersTo accomplish goals efficiently3Whats the difference bc programmednonprogrammed decisionsstPspecific procedures developed 4 repetitiveroutine problems 1line rule or standard operating procedure used in making the decision different complexNspecific to mgt problems that are novel newunique differenthard to understand top managers if you have to think about it4Do managers make more programmed or nonprogrammed decisions in generalProgrammed makes us more efficient5What is decisionmaking under conditions of certaintyManagers know all available alternativesthe outcomes associated w each 100 probability6What is decisionmaking under conditions of riskLack of certainty regarding outcomes of various alternatives but an awareness of probabilities associated w their occurrence alternatives are known but outcomes are in doubt7What is decisionmaking under conditions of uncertaintyDont know alternatives their potential outcomes or the probability of the outcomes occurrence8Which decisionmaking condition is most common Least common Most difficultMost commonriskprobabilities 0100Least commoncertainty100 probabilitiesMost difficultuncertaintyno probabilities9What is the key to making good decisions under riskAccurately determining the probabilities associated w each alternative10How do programmednonprogrammed decisionsthe different decisionmaking conditions relateProgrammedcertaintyriskNonprogrammedriskuncertainty Every programmed decision wasone point or anothernonprogrammed decision11What does the traditional economic model assume about decisionmakers 2 assumptionsDecisions are made under conditions of certaintyaManagers seek to maximize benefits or minimize costsbManagers are completely rationalYou always select the best alternativeA prescriptive model bc its what you should do12Under what decisionmaking condition do decisions get made in the traditional economic modelCertainty13What does the behavioral model assume about decisionmakersDecisions are made under bounded rationality rather than completesatisficing rather than maximizingHow decisions are actually made14What is bounded rationality What 3 things bound ones rationalityYou dont know everything try but its limitedMangers are unable to grasp the full complexity of managerial decisions bc their rationality is bounded by limited mental capacity 7 2 emotional stateunforseeability of future events probabilities are1 less than perfect15What is satisficing How does it differ from maximizing Is it irrationalstManagers select the 1 alternative that meets a minimally acceptable standard rather than going throughevaluating all the alternativesselecting the best one can lead to a maximizing situation but must get luckyyou wouldnt know if occurredstSatisficing is a heuristicpick the 1 shortcutget a good decision wo a lot of timeeffort16What is a heuristic What are the advantages ofdisadvantages of heuristicsA labor saving device a short cut a rule of thumbAdvantages atime savingsbthey may produce more good decisions thanbad decisionsDisadvantages We adopt heuristics often wo being aware of them they implicitly guide our judgment which can be a major drawback if we over rely onthem bc they can lead to errors sometimes severe errorsHeuristicstimes canlead us to faulty conclusionsWhen heuristics lead to errors in judgment they are called biases
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