Problems are usually of the following type(s):
Answer: D
Correct answer: all of the above
All three arise. A crisis demands immediate attention; a routine problem recurs and is handled by procedure; and a missed opportunity is a problem too, though a less visible one. The third is the easiest to overlook, since nothing has gone wrong - something has merely not gone right.
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Which of these does not form part of the key streams identified by March (1988) in decision making in highly ambiguous environments?
Answer: A
Correct answer: Expectations
March’s garbage can model identifies four streams flowing independently through an organisation: problems, solutions, participants and choice opportunities. A decision happens when they happen to coincide. Expectations is not among them - and the absence of anything so orderly is the point of the model.
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A process for arriving at an evaluation of decisions, in which selected individuals are asked to respond individually to key questions about a problem, then are provided with a summary of the responses, all members have given and invited to respond again is called:
Answer: A
Correct answer: delphi technique
The Delphi technique gathers judgements in writing and in rounds, with a summary of the group’s responses fed back before each new round. Because the participants never meet, no one dominates and no one is swayed by status, which is what makes it useful for forecasting and for genuinely contested questions.
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Costs that behaves as irrelevant costs in process of decision making are classified as
Answer: A
Correct answer: past costs
A cost already incurred is the same whatever is now decided, so it cannot distinguish between the alternatives and is irrelevant to the choice. Only costs that differ between the alternatives - future and differential - are relevant, and opportunity costs are relevant for precisely that reason: they differ according to what is chosen.
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Fourth step in decision making process is
Answer: B
Correct answer: making decisions
Having predicted the outcomes of the alternatives in the third step, the fourth chooses among them. Implementation and evaluation follow as the fifth, which is where the feedback for the next cycle comes from.
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third step in decision making process is
Answer: C
Correct answer: making predictions
The five steps run: identify the problem and the uncertainties; obtain information; make predictions about the future; choose among alternatives; and implement, evaluate and learn. Prediction is the third because it depends on the information gathered in the second and must precede the choice made in the fourth.
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What is the term for decisions limited by human capacity to absorb and analyse information?
Answer: C
Correct answer: Bounded rationality
Bounded rationality is Simon’s term for the gap between the rational ideal and human capability. The decision maker cannot gather all the information, cannot hold it all in mind, and cannot evaluate every alternative - so rationality operates within bounds set by the person and the situation rather than absolutely.
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A decision for repetitive or routine problems for which the responses have been already been decided and been known to the person who will make the decision is called:
Answer: A
Correct answer: programmed
The defining features are in the stem: the problem recurs, and the response has already been worked out and is known to whoever must decide. Nothing is left to judgement, so the decision can be delegated, embedded in a procedure, or automated entirely.
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What is the term for the 'rule of thumb' type of bias in decision making?
Answer: D
Correct answer: Heuristics
A heuristic is a rule of thumb that shortens a judgement by substituting an easy question for a hard one. It usually works, which is why it persists, and its failures are systematic rather than random - which is what makes availability, representativeness and anchoring predictable biases rather than mere carelessness.
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What are characteristics of a programmed decision?
Answer: D
Correct answer: Routine and non-complex
A programmed decision is one that recurs often enough for a standard response to have been worked out, so it can be settled by rule or procedure rather than by fresh analysis. Complexity, risk and uncertainty are the marks of the non-programmed decision, which has no precedent to fall back on.
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