ORGB364 - Chapter 7 - Decision-Making and
Creativity Exam Questions With Verified
Answers
decision making
The conscious process of making choices among alternatives with the intention of moving toward
some desired state of affairs.
TERM
rational choice paradigm
DEFINITION
The view in decision making that people should — and typically do — use logic and all available
information to choose the alternative with the highest value.
LOCATION
Image: rational choice paradigm
subjective expected utility
The probability (expectation) of satisfaction (utility) resulting from choosing a specific alternative in a
decision.
rational choice decision-making process
1. Identify problem or opportunity
2. Choose the best decision process
3. Develop alternative solutions
4. Select the best alternative (highest SEU)
5. Implement the selected alternative
6. Evaluate decision outcomes
opportunity
a deviation between current expectations and a potentially better situation that was not previously
expected
programmed decisions
follow standard operating procedures; they have been resolved in the past, so the optimal solution
has already been identified and documented
non-programmed decisions
require all steps in the decision model because the problems are new, complex, or ill-defined
5 concerns with problem identification
1) stakeholder framing
2) perceptual defense
3) mental models
4) decisive leadership
5) solution-focused problems
stakeholder framing
, Employees, clients, and other stakeholders with vested interests try to "frame" the situation by
persuading decision makers that the available information points to a problem or an opportunity or
does not have any importance at all
perceptual defense
protecting oneself against objects and ideas that are threatening
mental models
visual or relational images in our mind of the external world; these can restrict a person's perspective
of the world
decisive leadership
includes quickly forming an opinion of whether an event signals a problem or opportunity
solution-focused problems
Decision makers have a tendency to define problems as veiled solutions (people with strong need for
cognitive closure are prone to this)
bounded rationality
The view that people are bounded in their decision-making capabilities, including access to limited
information, limited information processing, and tendency toward satisficing rather than maximizing
when making choices.
TERM
implicit favorite
DEFINITION
A preferred alternative that the decision maker uses repeatedly as a comparison with other choices
LOCATION
Image: implicit favorite
decision heuristics
unstructured and often nonconscious modes of reasoning or rules of thumb
anchoring and adjustment heuristic
A natural tendency for people to be influenced by an initial anchor point such that they do not
sufficiently move away from that point as new information is provided (ex. in price negotiations)
availability heuristic
A natural tendency to assign higher probabilities to objects or events that are easier to recall from
memory, even though ease of recall is also affected by non-probability factors (e.g., emotional
response, recent events)
representativeness heuristic
A natural tendency to evaluate probabilities of events or objects by the degree to which they
resemble (are representative of) other events or objects rather than on objective probability
information (ex. stereotyping)
Creativity Exam Questions With Verified
Answers
decision making
The conscious process of making choices among alternatives with the intention of moving toward
some desired state of affairs.
TERM
rational choice paradigm
DEFINITION
The view in decision making that people should — and typically do — use logic and all available
information to choose the alternative with the highest value.
LOCATION
Image: rational choice paradigm
subjective expected utility
The probability (expectation) of satisfaction (utility) resulting from choosing a specific alternative in a
decision.
rational choice decision-making process
1. Identify problem or opportunity
2. Choose the best decision process
3. Develop alternative solutions
4. Select the best alternative (highest SEU)
5. Implement the selected alternative
6. Evaluate decision outcomes
opportunity
a deviation between current expectations and a potentially better situation that was not previously
expected
programmed decisions
follow standard operating procedures; they have been resolved in the past, so the optimal solution
has already been identified and documented
non-programmed decisions
require all steps in the decision model because the problems are new, complex, or ill-defined
5 concerns with problem identification
1) stakeholder framing
2) perceptual defense
3) mental models
4) decisive leadership
5) solution-focused problems
stakeholder framing
, Employees, clients, and other stakeholders with vested interests try to "frame" the situation by
persuading decision makers that the available information points to a problem or an opportunity or
does not have any importance at all
perceptual defense
protecting oneself against objects and ideas that are threatening
mental models
visual or relational images in our mind of the external world; these can restrict a person's perspective
of the world
decisive leadership
includes quickly forming an opinion of whether an event signals a problem or opportunity
solution-focused problems
Decision makers have a tendency to define problems as veiled solutions (people with strong need for
cognitive closure are prone to this)
bounded rationality
The view that people are bounded in their decision-making capabilities, including access to limited
information, limited information processing, and tendency toward satisficing rather than maximizing
when making choices.
TERM
implicit favorite
DEFINITION
A preferred alternative that the decision maker uses repeatedly as a comparison with other choices
LOCATION
Image: implicit favorite
decision heuristics
unstructured and often nonconscious modes of reasoning or rules of thumb
anchoring and adjustment heuristic
A natural tendency for people to be influenced by an initial anchor point such that they do not
sufficiently move away from that point as new information is provided (ex. in price negotiations)
availability heuristic
A natural tendency to assign higher probabilities to objects or events that are easier to recall from
memory, even though ease of recall is also affected by non-probability factors (e.g., emotional
response, recent events)
representativeness heuristic
A natural tendency to evaluate probabilities of events or objects by the degree to which they
resemble (are representative of) other events or objects rather than on objective probability
information (ex. stereotyping)
