OAM 330 (Jake Jo) – 1st Midterm Exam – Study Guide & Practice Questions
What is Organizational Behavior? - correct answer ✔✔a systematic study of how people act in
organizations
what are the goals of organizational behavior? - correct answer ✔✔to be able to :
1. understand why people behave
2. predict how they will behave
What is decision making? - correct answer ✔✔refers to selecting choices among alternative
courses of action, which may also include inaction
note: decisions are not just made at the top but by every employee that is part of an
organization
what are three kinds of decision making models? - correct answer ✔✔1. rational decision
making model
2. intuitive decision making model
3. bounded rationality model
what are the steps for rational decision making? - correct answer ✔✔1. identify the problem
2. establish decision criteria
3. weigh decision criteria
4. generate alternatives
5. evaluate the alternatives
6. choose the best alternative
7. implement the decision
8. evaluate the decision
,what are the advantages of rational decision making? - correct answer ✔✔1. establishes clear
criteria for how options should be evaluated
2. urges decision makers to generate an exhaustive set of alternatives
what are some assumptions about rational decision making? - correct answer ✔✔1. that people
know all their available choices
2. that people want to make the optimal decision
3. that people have NO COGNITIVE BIASES
what is intuitive decisions making? - correct answer ✔✔- arriving at decisions without conscious
reasoning
- decisions are NOT MADE between a list of well thought-out alternatives
* make a decision based on gut feeling*
what is bounded rationality model? - correct answer ✔✔- recognizes the limitations of decision-
making processes
extra:
- individuals knowingly LIMIT their options to a manageable set
- individuals choose the first acceptable alternative
what is satisficing? (under bounded rationality model) - correct answer ✔✔- accepting the first
alternative that meets your minimum criteria
what is the upside to satisficing? - correct answer ✔✔- we tend to save cognitive time and effort
extra:
,- people tend to rely on HEURISTICS which allows us to make decisions quickly
what are heuristics? - correct answer ✔✔mental shortcuts or rules of thumb
what is the downside to satisficing? - correct answer ✔✔over reliance on heuristics can result in
COGNITIVE BIASES
what are cognitive biases? - correct answer ✔✔are ERRORS in perception that result in faulty
decision making
- people fall into predictable decision making traps due to an over reliance on HEURISTICS or
GUT INSTINCT
- biases lead pole to have DISTORTED picture or INACCURATE understanding of the environment
what are biases? - correct answer ✔✔biases refers to a tendency for people to OVER (OR
UNDER) ESTIMATE the true parameter
what is availability bias? - correct answer ✔✔- situation in which information that is READILY
AVAILABLE is viewed as MORE LIKELY to occur
- events that are emotional, vivid, or more easily imagined also tend to be more available in our
memory
what is conjunction fallacy? - correct answer ✔✔- people judge that two more more events
happening is more likely than one event
* in reality more likely one will happen NOT two***
what is representativeness bias? - correct answer ✔✔- tendency to assess an event as MORE
LIKELY to occur based on our own STEREOTYPES
, - people tend to disregard or ignore potentially relevant information
ex. sample sizes, base rates, etc.
how is representativeness bias and availability bias different? - correct answer
✔✔representativeness is largely based on your own personal experience
what is anchoring and adjustment bias? - correct answer ✔✔- refers to the tendency to rely too
heavily on an INITIAL REFERENCE POINT when making decisions and FAILING TO ADJUST
sufficiently (the initial reference point is often arbitrary and unrelated to subject)
- people are not good at perceiving things in absolute terms (only relative terms)
what is framing bias? - correct answer ✔✔refers to the tendency to be influences by THE WAY
that problems are PRESENTED?
(half full vs. half empty)
what is loss aversion? - correct answer ✔✔losers tend to loom larger psychologically than gains
ex. the negative emotion of letting you out late by 5 mins > the positive emotion of getting let
out 5 mins early
what is confirmation bias? - correct answer ✔✔refers to the tendency to process and analyze a
person's preexisting ideas
what is ego-affirming? - correct answer ✔✔people see what they want to see
- people tend to not seek out disconfirming information or evidence by the contrary
what are the three way to change biases? - correct answer ✔✔1. awareness and training
2. check yourself and try to think from a 3rd person perspective
3. expand your information search and play devil's advocate
What is Organizational Behavior? - correct answer ✔✔a systematic study of how people act in
organizations
what are the goals of organizational behavior? - correct answer ✔✔to be able to :
1. understand why people behave
2. predict how they will behave
What is decision making? - correct answer ✔✔refers to selecting choices among alternative
courses of action, which may also include inaction
note: decisions are not just made at the top but by every employee that is part of an
organization
what are three kinds of decision making models? - correct answer ✔✔1. rational decision
making model
2. intuitive decision making model
3. bounded rationality model
what are the steps for rational decision making? - correct answer ✔✔1. identify the problem
2. establish decision criteria
3. weigh decision criteria
4. generate alternatives
5. evaluate the alternatives
6. choose the best alternative
7. implement the decision
8. evaluate the decision
,what are the advantages of rational decision making? - correct answer ✔✔1. establishes clear
criteria for how options should be evaluated
2. urges decision makers to generate an exhaustive set of alternatives
what are some assumptions about rational decision making? - correct answer ✔✔1. that people
know all their available choices
2. that people want to make the optimal decision
3. that people have NO COGNITIVE BIASES
what is intuitive decisions making? - correct answer ✔✔- arriving at decisions without conscious
reasoning
- decisions are NOT MADE between a list of well thought-out alternatives
* make a decision based on gut feeling*
what is bounded rationality model? - correct answer ✔✔- recognizes the limitations of decision-
making processes
extra:
- individuals knowingly LIMIT their options to a manageable set
- individuals choose the first acceptable alternative
what is satisficing? (under bounded rationality model) - correct answer ✔✔- accepting the first
alternative that meets your minimum criteria
what is the upside to satisficing? - correct answer ✔✔- we tend to save cognitive time and effort
extra:
,- people tend to rely on HEURISTICS which allows us to make decisions quickly
what are heuristics? - correct answer ✔✔mental shortcuts or rules of thumb
what is the downside to satisficing? - correct answer ✔✔over reliance on heuristics can result in
COGNITIVE BIASES
what are cognitive biases? - correct answer ✔✔are ERRORS in perception that result in faulty
decision making
- people fall into predictable decision making traps due to an over reliance on HEURISTICS or
GUT INSTINCT
- biases lead pole to have DISTORTED picture or INACCURATE understanding of the environment
what are biases? - correct answer ✔✔biases refers to a tendency for people to OVER (OR
UNDER) ESTIMATE the true parameter
what is availability bias? - correct answer ✔✔- situation in which information that is READILY
AVAILABLE is viewed as MORE LIKELY to occur
- events that are emotional, vivid, or more easily imagined also tend to be more available in our
memory
what is conjunction fallacy? - correct answer ✔✔- people judge that two more more events
happening is more likely than one event
* in reality more likely one will happen NOT two***
what is representativeness bias? - correct answer ✔✔- tendency to assess an event as MORE
LIKELY to occur based on our own STEREOTYPES
, - people tend to disregard or ignore potentially relevant information
ex. sample sizes, base rates, etc.
how is representativeness bias and availability bias different? - correct answer
✔✔representativeness is largely based on your own personal experience
what is anchoring and adjustment bias? - correct answer ✔✔- refers to the tendency to rely too
heavily on an INITIAL REFERENCE POINT when making decisions and FAILING TO ADJUST
sufficiently (the initial reference point is often arbitrary and unrelated to subject)
- people are not good at perceiving things in absolute terms (only relative terms)
what is framing bias? - correct answer ✔✔refers to the tendency to be influences by THE WAY
that problems are PRESENTED?
(half full vs. half empty)
what is loss aversion? - correct answer ✔✔losers tend to loom larger psychologically than gains
ex. the negative emotion of letting you out late by 5 mins > the positive emotion of getting let
out 5 mins early
what is confirmation bias? - correct answer ✔✔refers to the tendency to process and analyze a
person's preexisting ideas
what is ego-affirming? - correct answer ✔✔people see what they want to see
- people tend to not seek out disconfirming information or evidence by the contrary
what are the three way to change biases? - correct answer ✔✔1. awareness and training
2. check yourself and try to think from a 3rd person perspective
3. expand your information search and play devil's advocate
