Testbank of fundamental of management 7e by robin ch 03

6 Identifying the wrong problem is just as much a failure for a manager as identifying the right problem and failing to solve it.Answer: TRUE Explanation: Problem identification is a cri

Fundamentals of Management, 7e (Robbins/DeCenzo/Coulter)

Chapter 3 Foundations of Decision Making

1) In decision making, a problem can be defined as a discrepancy between what exists and what the problem solver desires to exist

Answer: TRUE

Explanation: A problem is a difference between a desired state and an existing state For

example, suppose a person is hungry—the existing state of not having food The desired state is

to obtain food So the problem is defined as the difference between the no-food state and the food state

Diff: 2 Page Ref: 58

Explanation: Decision criteria are comprised of factors that will affect a decision If the decision

is between driving or riding a bike to work, criteria might include cost, weather, convenience, ecological considerations, time, clothing, and so on

Diff: 2 Page Ref: 59

Diff: 3 Page Ref: 59

Objective: 3.1

5) All criteria are equally important in the decision-making process

Answer: FALSE

Explanation: Criteria have differing values, depending on their importance The importance of

an individual criterion is indicated by how it is weighted The greater the weight assigned to the criterion, the greater its importance

Diff: 2 Page Ref: 59

AACSB: Analytic Skills

Objective: 3.1

6) Identifying the wrong problem is just as much a failure for a manager as identifying the right problem and failing to solve it.

Answer: TRUE

Explanation: Problem identification is a critical part of problem solving and decision making Solving the wrong problem does nothing to further a manager's goals so it is no value

Diff: 2 Page Ref: 59

AACSB: Analytic Skills

Objective: 3.1

8) A heuristic can simplify the decision-making process

Answer: TRUE

Explanation: A heuristic is a rule of thumb that is used to simplify the decision-making process

by allowing the decision maker to focus on just a few variables, rather than all variables When used wisely, heuristics make decision making easier and simpler

Diff: 1 Page Ref: 62

Diff: 1 Page Ref: 62

AACSB: Analytic Skills

Diff: 1 Page Ref: 62

AACSB: Analytic Skills

Objective: 3.1

11) A basketball coach who takes a very good shooter out of a game because she missed her last two shots has availability bias.

Answer: TRUE

Explanation: Availability bias is the tendency to over-accentuate recent history and discount long-term patterns This basketball coach is ignoring long-term patterns—the player is a good shooter—in favor of very recent history—two missed shots—so he is displaying availability bias

Diff: 1 Page Ref: 63

AACSB: Analytic Skills

Diff: 3 Page Ref: 64

AACSB: Analytic Skills

Diff: 2 Page Ref: 65

AACSB: Analytic Skills

Diff: 2 Page Ref: 65

AACSB: Analytic Skills

Objective: 3.2

15) A synonym for the word satisfice is maximize.

Answer: FALSE

Explanation: The words satisfice and maximize are opposites rather than synonyms When a manager does not have enough information to maximize, or find the best possible solution to a problem, he or she must compromise, or satisfice When you satisfice you accept not the best

solution, but a solution that is "good enough."

Diff: 2 Page Ref: 65

AACSB: Analytic Skills

Diff: 2 Page Ref: 66

AACSB: Analytic Skills

Diff: 2 Page Ref: 66

AACSB: Analytic Skills

Diff: 2 Page Ref: 66

AACSB: Analytic Skills

Diff: 2 Page Ref: 66

AACSB: Analytic Skills

Objective: 3.2

20) Emotions should always be strictly ignored in a decision-making process.

Diff: 2 Page Ref: 67

AACSB: Analytic Skills

Diff: 1 Page Ref: 68

AACSB: Analytic Skills

Objective: 3.3

22) A rule is simpler than a policy or a procedure to implement

Answer: TRUE

Explanation: A rule is a simple statement that can be applied directly to a situation For

example, a broker can easily follow a rule to sell a specific stock when it reaches a specific price point A procedure or policy may have an identical outcome, but a more complicated series of steps must be taken to arrive at that outcome

Diff: 2 Page Ref: 68-69

AACSB: Analytic Skills

Objective: 3.3

23) Implementing a procedure requires more judgment and interpretation than implementing a policy

Answer: FALSE

Explanation: A procedure is a series of steps that must be followed to arrive at a decision, each

of the steps being clear and straightforward A policy provides guidelines rather than steps for the decision maker to follow Each guideline must be interpreted and evaluated for the situation

at hand Therefore a policy requires much more judgment and interpretation than a procedure.Diff: 2 Page Ref: 69

AACSB: Analytic Skills

Diff: 2 Page Ref: 69

25) Managerial decisions are likely to become more programmed as managers rise in an

organizational hierarchy

Answer: FALSE

Explanation: Problems that managers face become more unique, ambiguous, and difficult as the status of a manager rises, not more programmed Top managers are paid more than lower-level managers specifically because they are expected to make difficult decisions More routine decisions are made by lower-level managers

Diff: 2 Page Ref: 70

Diff: 1 Page Ref: 70

Diff: 3 Page Ref: 70

AACSB: Analytic Skills

confident of a position involving risk

Diff: 3 Page Ref: 70

AACSB: Analytic Skills

30) An advantage of group decisions is that they increase the perception of the legitimacy of the solution.

Answer: TRUE

Explanation: When decisions that affect many people are made without their consent, they tend

to be less well accepted than group decisions in which all parties are consulted A group decision

is perceived to be more legitimate because it was made in a more democratic manner

Diff: 1 Page Ref: 71

AACSB: Communication

Objective: 3.4

31) A drawback of group decision making is groupthink

Answer: FALSE

Explanation: When a group experiences groupthink, members do not freely express their

opinions for fear of standing out and having to assume responsibility for their actions

Groupthink often results in bland, unimaginative decisions that fail because they are too timid.Diff: 1 Page Ref: 72

Diff: 2 Page Ref: 73

Diff: 2 Page Ref: 74

AACSB: Technology

Objective: 3.4

34) A country with high uncertainty avoidance and high power distance is more likely to engage

in groupthink than a country with low uncertainty avoidance and low power distance

Answer: TRUE

Explanation: High uncertainty avoidance makes managers avoid difficult decisions and be overly agreeable and accommodating High power distance allows high-status individuals to dominate groups Both of these attributes would contribute to groupthink, the tendency of groups

to avoid controversy and conform to conventional positions

Diff: 2 Page Ref: 75

AACSB: Analytic Skills

35) Creative solutions to problems are valued because they are new and different from traditionalsolutions.

Answer: FALSE

Explanation: Creative solutions are valued only if they solve problems in ways that are superior

to conventional solutions Often, solving a problem in a creative way can give a company a competitive edge on its competitors

Diff: 1 Page Ref: 71

Diff: 2 Page Ref: 58

Objective: 3.1

37) Which of the following defines a problem in the decision-making process?

A) a discrepancy between what exists and what the decision maker desires to exist

B) a discrepancy between the ideal and the practical

C) something that causes irritation

D) something that calls for attention

Answer: A

Explanation: A) Though problems certainly can irritate, and merit attention, these characteristicsare not universal enough by themselves to define what a problem is in the decision-making process In this process, a problem is defined as a discrepancy, or difference between how things are and how the decision maker wants things to be A problem is not a difference between the ideal and the practical, but rather just a situation in which things are less than satisfactory, and the decision maker intends to take action to make them satisfactory

Diff: 1 Page Ref: 58

Objective: 3.1

38) The decision-making process consists of a series of eight steps that identify a problem and work toward ultimately .

A) determining if there is a solution to the problem

B) solving the problem

C) making a plan to solve the problem

D) breaking down the problem into a series of steps

Diff: 1 Page Ref: 58

AACSB: Analytic Skills

Objective: 3.1

39) To identify a problem, a manager

A) compares one set of standards or goals to a second set of standards or goals

B) looks for unhappy customers

C) uses intuition to see that things don't look right

D) compares the current state of affairs with some standard or goal

Answer: D

Explanation: D) A manager compares what she has now to some standard or goal to identify a problem The standard or goal may represent some level of performance from the past, or it could be an as yet unreached level that the manager thinks can be attained Looking for unhappy customers or using intuition to see when things don't look right may be ways to identify

problems but they are not general problem identification methods Finally, comparing one set of standards or goals to a second set is incorrect because a problem is always identified by

comparing an actual state to a standard or goal, not one set of standards or goals to another.Diff: 1 Page Ref: 58

Objective: 3.1

40) A manager can faithfully execute the decision-making process, but still end up with nothing

of value if

A) he fails to identify the correct problem

B) he fails to assign number values to different criteria

C) he solves the problem inefficiently

D) he fails to correctly identify the steps of the process

Answer: A

Explanation: A) Assigning number values to decision criteria may often be helpful in the

decision-making process, but they are not required for a successful outcome Solving the

problem inefficiently may not be ideal, but it is not without value Identifying the steps of the process have little to do with the success of the process That leaves failing to identify the correctproblem—it does no good to solve a problem if it is the wrong problem Solving the wrong problem has no benefit for the organization or its goals

41) A manager is considering purchasing new computers for her department The manager spends time assessing the computers her department now has Which stage of the decision-making process is she going through?

Explanation: A) The first thing the manager needs to do is identify the problem More

specifically, she needs to determine whether she actually has a problem or not If the computers her department now has are performing satisfactorily, she may decide that she doesn't have a problem and doesn't need to purchase new computers The other choicesidentifying criteria, developing alternatives, or implementing an alternativeall come later in the process, after the manager has determined what her problem is

Diff: 2 Page Ref: 58-59

AACSB: Analytic Skills

Objective: 3.1

42) A manager is determining what kind of new computers she should purchase for her

department She has made a list of five different computer models for consideration Which stage

of the decision-making process is this?

Diff: 2 Page Ref: 58-59

AACSB: Analytic Skills

Objective: 3.1

43) After purchasing new computers for her department, a manager is now comparing the

performance of the new computers to the computers they replaced Which stage of the making process is she carrying out?

Diff: 2 Page Ref: 58-62

AACSB: Analytic Skills

Objective: 3.1

44) For a high-tech bicycle buyer, decision criteria would be determined by

A) whatever most bike buyers recommend

B) expert ratings in bike magazines

of bike features or technical specifications might enter into the decision-making process, but only

if the buyer thought they were important In other words, the only factors that are important for selection of decision criteria for a bike buyer are the personal preferences of the buyer

Diff: 2 Page Ref: 59

AACSB: Analytic Skills

Diff: 2 Page Ref: 59

AACSB: Analytic Skills

Objective: 3.1

46) Which of the following would be a fairly objective criterion by which a bicycle buyer could assess different bike models?

Diff: 2 Page Ref: 60

AACSB: Analytic Skills

Objective: 3.1

47) A manager chooses to ignore a rigorous decision-making process and select TV monitor A over monitor B because he "trusts" company A more than company B If the decision he made was rational, which of the following is true?

A) Monitor A is really the better choice

B) The manager should have included "trust" as a criterion

C) Monitor B is really the better choice

D) The manager must have made a mistake in calculating his weighted criteria

Answer: B

Explanation: B) There is no way of knowing whether monitor A was really a better choice than

B or if the manager made a calculation error What is true is that the manager should have included "trust" as one of his criteria categories If trust was an overriding factor, then the

manager should have weighted it heavily so it tilted the score toward what his true feelings were

In essence, the manager made a mistake in selecting and weighting criteria

Diff: 3 Page Ref: 60-61

AACSB: Analytic Skills

Objective: 3.1

48) In allocating weights to the decision criteria, which of the following is most helpful to remember?

A) All weights must be the same

B) The total of the weights must sum to 100

C) The high score should be a 10, and no two criteria should be assigned the same weight

D) Assign the most important criterion a score, and then assign weights against that standard.Answer: D

Explanation: D) There are no set rules for weighting criteria All weights can be the same, but inmost cases they will be different Similarly, there is no total amount that all weights should sum

to The high score may or may not be assigned a 10, and in many cases two or more criteria can

be assigned with the same weight Only assigning the most important criterion a score and assigning weights against that standard offers helpful advice—measuring each criterion against astandard in most cases will result in a reliable representation of values

Diff: 3 Page Ref: 60

AACSB: Analytic Skills

Objective: 3.1

49) What is a heuristic?

A) a complicated and systematic method of decision making

B) a purely intuitive method of decision making

C) a totally unreliable method of decision making

D) a shortcut or rule of thumb that is used for decision making

Diff: 2 Page Ref: 62

Objective: 3.1

50) Because they are not systematic or comprehensive, using heuristics in place of an eight-step decision-making process can lead to

A) errors and biases

B) consistently better decisions

C) more imaginative decisions

D) decisions that more directly solve problems

Answer: A

Explanation: A) Though heuristics can be very useful in saving time and effort, they can also lead to mistakes, making "errors and biases" the correct response here There is no evidence that using heuristics results in more imaginative decisions or decisions that solve problems more directly Finally, since heuristics are known to lead to errors and biases, they clearly do not lead

to better decisions, so "consistently better decisions" is incorrect

Diff: 2 Page Ref: 62

AACSB: Analytic Skills

Objective: 3.1

51) Which of the following is NOT a reason why managers often resort to using heuristics?A) They seem to eliminate complexity

B) They seem to eliminate ambiguity

C) They save time

D) They thoroughly explore all alternatives

Answer: D

Explanation: D) The one thing that a heuristic does not do is explore all alternatives for solving

a problem Instead, a heuristic looks at only a small part of the problem and uses key features to arrive at a decision and avoid a complete examination of the options Heuristics often do

successfully seem to make complicated, ambiguous situations easier to understand and deal with,

so eliminating complexity and ambiguity are eliminated as correct answers Without a doubt, heuristics save time which eliminates "saving time" as the correct answer

Diff: 2 Page Ref: 62

AACSB: Analytic Skills

Objective: 3.1

52) A banker opts for short-term gain despite indications that his decision might not pay off in the long run Which error or bias is the banker guilty of?

long-is the correct response here

Diff: 2 Page Ref: 62-63

AACSB: Analytic Skills

predictable, something that is not relevant here Neither is self-serving, blaming outcomes on outside factors rather than taking responsibility for your own errors Finally, the anchoring effect describes an individual who fails to adjust to incoming information, again not something that the scientist is doing in this situation

Diff: 2 Page Ref: 62

AACSB: Analytic Skills

Objective: 3.1

54) One legislator sees decreased tax revenue as the key problem in the budget A second

legislator sees increased spending as the problem Each of these legislators has a(n) .A) representation bias

B) self-serving bias

C) availability bias

D) framing bias

Answer: D

Explanation: D) A representation bias is a false parallel of current events to other events,

something that is not occurring here A self-serving bias, blaming the situation on outside

influences, is also not relevant to this situation Availability bias occurs when decision makers value only the most recent events that are relevant to the situation, also not occurring here What

is occurring is that the legislators are framing the problem in different ways This framing results

in them coming to very different conclusions about how to solve the problem

Diff: 2 Page Ref: 63

AACSB: Analytic Skills

Objective: 3.1

56) The three main models that managers use to make decisions are

A) rational, bounded rational, and intuitive

B) rational, irrational, bounded rational

C) intuitive, unintuitive, rational

D) bounded rational, intuitive, systematic

Answer: A

Explanation: A) Models that managers use to make decisions include the rational model, the bounded rational model, and the intuitive model The rational model focuses on being logical andobjective The bounded rational model assumes limitations on the rational model and makes

"good enough" decisions The intuitive model employs emotions and subconscious modes of thinking within a rational context The other three choices are all incorrect because they include categories that do not identify decision-making methods: irrational, unintuitive, and systematic.Diff: 1 Page Ref: 64-66

Objective: 3.2

57) It is assumed that a rational decision maker .

A) would never make a wrong choice

B) would be subjective and impractical

C) would face only difficult decisions

D) would be objective and logical

Answer: D

Explanation: D) A perfectly rational decision maker would always make a "good" decision based on sound reasoning, but he or she could still make the wrong choice in a given situation Arational decision maker would face both easy and difficult problems Subjectivity and

impracticality are not characteristics of a rational decision maker The important characteristics

of a rational decision maker are that he or she is rational and logical, meaning that being

objective and logical is the correct response

Diff: 2 Page Ref: 64

AACSB: Analytic Skills

Objective: 3.2

58) What does it mean for a decision maker to maximize value?

A) to make the decision to be as clear and logical as possible

B) to make the achievement of goals as likely as possible

C) to waste as little time and energy as possible

D) to make decision making as simple as possible

Answer: B

Explanation: B) Maximizing value is a question of achieving goals When a decision maker maximizes value, he or she makes the decision that is most likely to achieve his or her goal Being clear and logical, efficient, or simple are worthy goals for a decision maker, but they do not define maximizing value so they are incorrect responses for this question

Diff: 2 Page Ref: 64

AACSB: Analytic Skills

Objective: 3.2

59) Maximizing value for an organization means making sure that

A) the organization makes money

B) the best interests of the organization are addressed

C) the decision made is as rational as possible

D) the decision is as simple as possible

Diff: 2 Page Ref: 64

AACSB: Analytic Skills

Objective: 3.2

60) Which of the following is NOT assumed in a rational decision?

A) a clear and specific goal

B) a clear and unambiguous problem

C) many alternatives and consequences are known

D) value is maximized

Answer: C

Explanation: C) The ideal rational decision will feature a clear and specific goal, a problem that

is clear and unambiguous, and value is maximized This ideal decision would also require that all, not just many alternatives and consequences, would be known

Diff: 2 Page Ref: 64

AACSB: Analytic Skills

Objective: 3.2

61) It is assumed that in most cases, the decisions of all managers are limited by .A) greed and short-sightedness

B) having too much information

C) not being able to analyze all information for all alternatives

D) not being able to act rationally or in the best interests of their organization

Answer: C

Explanation: C) Greed and short-sightedness may affect the decisions of some, but clearly not all managers Most managers are rational in that they are reasonable, logical, and have the best interests of their organization in mind What limits the decisions of managers most of the time is not having too much information but having too little, and not having the time or resources to be able to analyze all of the information that is relevant to all of the alternatives in a given situation.Diff: 2 Page Ref: 65

AACSB: Analytic Skills

Objective: 3.2

62) Which term best characterizes a decision that has bounded rationality?

A) virtually perfect

B) rigorous and comprehensive

C) not good enough

D) good enough

Answer: D

Explanation: D) Rather than thought to be perfect or rigorous and thorough, a bounded

rationality decision is considered to be just "good enough."

Diff: 2 Page Ref: 65

AACSB: Analytic Skills

Objective: 3.2

63) Software programs that use a series of questions to aid humans in decision making are called .

A) text reading software

Diff: 2 Page Ref: 65

Explanation: A) Expert systems are primarily used by non-experts to make high quality

decisions These non-experts are typically lower-level managers Top managers, senior

managers, or experts may all use expert systems from time to time, but the systems are designed specifically to guide non-experts in making useful decisions

Diff: 2 Page Ref: 65

AACSB: Technology

Objective: 3.2

65) Neural networks are able to outdo the performance of humans by

A) analyzing symbols

B) handling up to three variables at once

C) handling hundreds of variables at once

D) reading facial expressions

Answer: C

Explanation: C) Humans typically can only process two or three variables at once when problemsolving Neural networks can handle hundreds of variables, outdoing human performance Analyzing symbols is incorrect because both computers and humans can analyze symbols As yet, no computers are proficient at extracting important information by reading facial

expressions

Diff: 2 Page Ref: 65

AACSB: Technology

Objective: 3.2

66) Neural networks differ from expert systems in that they can .

A) draw conclusions from data

B) ask questions to the decision maker

C) perform sophisticated calculations

D) learn from experience

Answer: D

Explanation: D) Neural networks are special because they can learn from experience Situations are shown to the network and the network learns to recognize keys to these situations so that it can recognize them and employ what was learned to make decisions in the future Drawing conclusions, asking questions, or performing complicated calculations are all normal functions for a software program and not special to neural networks

Diff: 2 Page Ref: 65

AACSB: Technology

Objective: 3.2

67) Neural networks outperfom expert systems in uncovering

A) credit card fraud

B) false positives for pregnancy

C) potential credit card customers

D) credit problems in bank mortgages

Answer: A

Explanation: A) Expert systems were flawed in dealing with credit card fraud in that they kept giving false positives—finding fraud where it didn't exist Neural networks proved to be much better at discovering credit card fraud without many false positives Neural networks were not used for pregnancy tests, finding new credit card customers, or finding credit problems in mortgages

Diff: 2 Page Ref: 65

AACSB: Technology

Objective: 3.2

68) Herbert Simon won the Nobel Prize in economics for his work in describing .A) how people spend money

B) how most people are perfectly rational

C) how people make decisions

D) how people avoid decisions

Answer: C

Explanation: C) Rather than study how people spend money, Simon studied how people made decisions He found that people were limited in their ability to use logic and were not perfectly rational in their decision making Simon did not investigate how people avoid decisions

Diff: 2 Page Ref: 65

Objective: 3.2

69) Which of the following is the best definition for the word satisfice?

A) very satisfying

B) not sufficient

C) accepts a less than perfect solution

D) requires a perfect solution

Answer: C

Explanation: C) When you satisfice you are accepting a "good enough" or less than perfect solution to a problem Not sufficient is incorrect because satisficing is often sufficient to solve a

problem Very satisfying is wrong because though satisfice sounds like satisfy, it has nothing to

with that word Finally, requires a perfect solution is incorrect because the term does not require the perfect solution, but rather a compromise on perfection

Diff: 2 Page Ref: 66

C) deal with difficult situations

D) grasp present conditions and anticipate future conditions

Answer: D

Explanation: D) Simon found that people were limited in fully understanding their current situation Without understanding the present, they also had trouble planning for the future Though people may have trouble being honest, dealing with difficult situations, and thinking independently, none of these items were involved in Simon's work

Diff: 2 Page Ref: 66

Objective: 3.2

71) A person who satisfices fails to

A) maximize his or her decision

B) understand his or her position

C) accept the truth of a situation

D) make any kind of decision

Answer: A

Explanation: A) Satisficing is accepting a "good enough" position, rather than maximizing a decision When a decision is maximized, goals are reached and the best possible solution is found Satisficing does not entail failing to: understand one's position, accept the truth, or make adecision to begin with Instead, satisficing involves going with a less than thorough examination

of all outcomes to find a "good enough" solution

Diff: 2 Page Ref: 66

Objective: 3.2

72) Sticking to a decision despite evidence that it is a mistake is called .

Diff: 2 Page Ref: 66

Objective: 3.2

73) Escalation of commitment can occur when people don't

A) want to make a decision

B) want to admit that an earlier decision was flawed

C) accept current conditions

D) understand that conditions have changed

Answer: B

Explanation: B) Escalation of commitment can occur when people cling to an earlier decision Rather than admit it was wrong and that they should start over, they stick with their original decision Failing to make a decision in the first place, accepting current conditions, or

understanding that conditions have changed are not situations in which escalation of commitmentoccurs

Diff: 2 Page Ref: 66

Explanation: C) Intuitive decision making uses feelings, memories, experiences, and

unconscious reasoning to arrive at decisions Unlike strictly rational decision making, intuitive decision making is not a systematic approach Intuitive decision making is rational to a degree, making non-rational an incorrect choice Factual is not a correct choice because it is not

recognized as a decision making model

Diff: 2 Page Ref: 66

AACSB: Analytic Skills

Objective: 3.2

75) Compared to fully rational decision making, what is a major advantage of intuitive decision making?

Explanation: D) Intuitive decision making is somewhat reliable, but definitely not totally

reliable, eliminating that choice Intuitive decision making is not at all thorough In fact, it is often employed as a short-cut in decision making Since the process is never spelled out on paper

in terms of numbers and values, intuitive decision making is almost never quantified Intuitive reasoning is fast, often because decision makers are using years of experience to make a single judgment

Diff: 2 Page Ref: 66

AACSB: Analytic Skills

Objective: 3.2

76) How often do managers typically use intuitive decision making?

A) 100 percent of the time

B) almost never

C) almost all of the time

D) more than half of the time

Answer: D

Explanation: D) Studies show that intuitive decision making is used more frequently than formalanalysis, meaning that managers use it more than half of the time No managers claim to use the method all or almost all of the time Almost never can be eliminated because managers say they use intuitive decision making frequently

Diff: 2 Page Ref: 66

AACSB: Analytic Skills

Objective: 3.2

77) Intuitive decision making can complement

A) rational decision making only

B) bounded rationality only

C) both rationality and bounded rationality

D) neither rationality nor bounded rationality

Answer: C

Explanation: C) Intuitive decision making does not conflict with a rational mode of thinking Instead, intuitive decision making uses experience and feelings to provide shortcuts to rational decision making For these reasons, it is clear that both formal rationality and bounded rationalitycan have intuitive elements

Diff: 2 Page Ref: 67

AACSB: Analytic Skills

Objective: 3.2

78) Which of the following is NOT a way in which intuition guides people who are making decisions?

A) Intuition provides ethics and values guidelines

B) Intuition provides a formal analysis method

C) Intuition provides experiences to draw from

D) Intuition draws on knowledge, skills, and training

Diff: 2 Page Ref: 67

AACSB: Analytic Skills

Objective: 3.2

80) Structured problems are

A) ambiguous

B) undefined and vague

C) clear and straightforward

D) incomplete

Answer: C

Explanation: C) A structured problem involves a clear, unambiguous, well-defined situation in which all information is provided The essence of a structured problem is that it is

straightforward and complete

Diff: 2 Page Ref: 68

AACSB: Analytic Skills

Objective: 3.3

81) Unstructured problems are .

A) perfectly rational

B) clear and straightforward

C) situations in which all options are known

D) situations in which all options are not known

Answer: D

Explanation: D) The essence of an unstructured problem is that information is missing All alternatives are not known The problem solver must analyze the situation based on assumptions that may or may not be true This means that situations in which all options are not known is the correct answer The situation is not perfectly rational or straightforward Information in an unstructured problem is incomplete, so all options are not known

Diff: 2 Page Ref: 68

AACSB: Analytic Skills

Objective: 3.3

82) Which of the following is an example of a structured problem?

A) designing a new MP3 player

B) hiring a lawyer

C) deciding shipping options for a vacuum cleaner

D) drafting a quarterback for a pro football team

Answer: C

Explanation: C) A structured problem should be straightforward and clear-cut Of the four choices, only "determining shipping options" requires a simple analysis of choices and priorities The other optionsdesigning a new product, hiring a person to represent you in the legal system,and choosing a football player to lead your teamall are much less defined and more open ambiguity than the correct choice; in other words they are unstructured problems

Diff: 2 Page Ref: 68

AACSB: Analytic Skills

Objective: 3.3

83) Which of the following is an example of an unstructured problem?

A) finding the list price of different copy machines

B) choosing the best wardrobe for an executive

C) comparing gas mileage for different car models

D) measuring pollution levels in a power plant

Answer: B

Explanation: B) An unstructured problem requires judgment and discrimination among options

in a situation in which not all information is available Only "choosing the best wardrobe for an executive" fits this description, as choosing a wardrobe is a subjective act that can be

accomplished in many different ways The other choicesfinding prices, comparing mileage, or measuring pollutionare straightforward and do not include this ambiguous, subjective element,

so they are incorrect responses

Diff: 2 Page Ref: 68

AACSB: Analytic Skills

Objective: 3.3