The first step in decision making is to:
Answer: B
Correct answer: establish specific goals and objectives.
Until it is clear what the decision is meant to achieve, there is no standard against which a problem can be recognised as a problem or an alternative judged better than another. Establishing the goals therefore precedes identifying the problem, which is the second step.
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Type of accounting which measures, reports and analysis of the non-financial and financial information to help in decision making is called
Answer: B
Correct answer: management accounting
Management accounting exists to inform decisions inside the organisation, so it reports whatever helps - financial and non-financial, historical and forecast, at whatever level of detail is useful. Financial accounting reports to those outside and is bound by standards and by the requirement of comparability.
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What is the term for a sub-optimal but acceptable outcome of negotiations between parties?
Answer: B
Correct answer: Satisficing
Satisficing is Simon’s companion term to bounded rationality: rather than searching for the best option, the decision maker searches until one is found that is good enough against the criteria that matter, and stops there. The result is acceptable rather than optimal, which is what makes deciding possible at all under real constraints.
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An employee in a company is working out a schedule to ensure that all the sales staff arrive at the company conference on time. This is a:
Answer: B
Correct answer: programmed decision
Scheduling travel to a conference is a routine and well-understood problem with a known method, so it can be settled by applying the usual procedure. Nothing about it is novel or contentious, which is exactly what makes a decision programmed.
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A process in which a group of individuals generate and state ideas, but in which the rules prohibit questioning, evaluating, or rejecting any ideas, even if they seem ridiculous is called:
Answer: B
Correct answer: brainstorming.
Brainstorming separates generating ideas from judging them, and the prohibition on criticism is what makes it work: judgement suppresses the unconventional suggestion that might have led somewhere. Evaluation comes afterwards, as a distinct stage with its own rules.
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What is intuitive decision making based on?
Answer: C
Correct answer: Instinct
Intuitive decision making draws on experience and pattern recognition that the decision maker cannot fully articulate, so it feels like instinct rather than reasoning. It is not guesswork: the judgement rests on a great deal of accumulated experience, which is why an expert’s intuition is worth more than a novice’s.
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