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Chapter 12
Enhancing Decision Making
True-False Questions
- Unstructured decisions are novel and nonroutine, and there is no well-understood or agreed- on procedure for making them.
Answer: True Difficulty: Easy Reference: p. 474
- A structured decision can be made by following a well-defined set of procedures. No “feel” or intuition is necessary.
Answer: True Difficulty: Easy Reference: p. 474
- Unstructured decision making is most prevalent at lower organizational levels.
Answer: False Difficulty: Easy Reference: p. 475
- Middle management tends to face more structured decision scenarios, and rarely include unstructured components.
Answer: False Difficulty: Easy Reference: p. 475
- Rank-and-file employees tend to make more structured decisions.
Answer: True Difficulty: Easy Reference: p. 475
- The intelligence phase of decision making consists of discovering, identifying, and understanding the problems occurring in the organization.
Answer: True Difficulty: Easy Reference: p. 476
- The implementation phase of Simon’s decision making model includes choosing among solution alternatives.
Answer: False Difficulty: Medium Reference: p. 476
- The first stage in Simon's decision-making process model is the design stage.
Answer: False Difficulty: Easy Reference: p. 476
- The classical model of management does not address what exactly managers do when they plan, decide things, and control the work of others.
Answer: True Difficulty: Medium Reference: p. 477
- MIS typically produce fixed, regularly scheduled reports based on data extracted and summarized from the firm’s underlying transaction processing systems.
Answer: True Difficulty: Easy Reference: p. 480
- DSS primarily address structured problems.
Answer: False Difficulty: Easy Reference: p. 480
- The earliest DSS were data-driven.
Answer: False Difficulty: Medium Reference: p. 480
- What-if analysis works forward from known or assumed conditions.
Answer: True Difficulty: Easy Reference: p. 482
- Backward sensitivity analysis software is used for goal seeking.
Answer: True Difficulty: Easy Reference: p. 482
- Data visualization technologies help distill large amounts of information into easily read lists of text.
Answer: False Difficulty: Easy Reference: p. 490
- A geographic information system is a decision support system designed specifically to work with spatial information.
Answer: True Difficulty: Easy Reference: p. 490
- DSS are a special category of GIS.
Answer: False Difficulty: Easy Reference: p. 490
- With an environmental scanning facility, ESS are able to detect signals of problems in the organizational environment that indicate strategic threats and opportunities
Answer: True Difficulty: Easy Reference: p. 494
- Web-based tools for videoconferencing and electronic meetings are the primary tools for GDSS.
Answer: False Difficulty: Hard Reference: p. 496
- During a GDSS electronic meeting, the attendees control the use of GDSS tools.
Answer: False Difficulty: Easy Reference: p. 4 97
- Analysis
Which type of decision is deciding whether to introduce a new product line?
a. Structured b. Unstructured c. Recurring d. Nonrecurring
Answer: b Difficulty: Easy Reference: pp. 474– 475
Analysis in terms of categorize
- Analysis
Which type of decision is calculating gross pay for hourly workers?
a. Structured b. Unstructured c. Recurring d. Nonrecurring
Answer: a Difficulty: Easy Reference: p. 475
Analysis in terms of categorize
- Which type of decision is more prevalent at lower organizational levels?
a. Procedural b. Unstructured c. Structured d. Semistructured
Answer: c Difficulty: Easy Reference: p. 475
- Which type of decision is most common at higher levels of management?
a. Semistructured b. Unstructured c. Structured d. Undocumented
Answer: b Difficulty: Easy Reference: p. 475
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- Rank-and-file employees tend to make more of these types of decisions:
a. semistructured. b. unstructured. c. structured. d. procedural.
Answer: c Difficulty: Easy Reference: p. 475
- Simon’s description of decision making consists of four stages:
a. planning, financing, implementation, and maintenance. b. planning, design, implementation, and maintenance. c. intelligence, design, choice, and implementation. d. intelligence, design, financing, and implementation.
Answer: c Difficulty: Medium Reference: p. 476
- Which phase of decision making finds or recognizes a problem, need, or opportunity?
a. Design b. Intelligence c. Choice d. Implementation
Answer: b Difficulty: Easy Reference: p. 476
- In contrast to the classical model of management, behavioral models see the actual behavior of managers as being __________.
a. more systematic b. more informal c. more reflective d. more well organized
Answer: b Difficulty: Medium Reference: p. 477
- Mintzberg’s classification of managerial roles defines three main categories:
a. interpersonal, informational, and decisional. b. symbolic, decisional, and interpersonal. c. symbolic, interpersonal, and technical. d. technical, interpersonal, and informational.
Answer: a Difficulty: Medium Reference: p. 477
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- The concern that the structure of data is consistent within an information source reflects which quality dimension of information?
a. Accuracy b. Integrity c. Validity d. Consistency
Answer: b Difficulty: Hard Reference: p. 479
- MIS typically produce:
a. new ways of looking at data that emphasize change, flexibility, and rapid response. b. fixed, regularly scheduled reports based on data extracted from the organization’s TPS. c. solutions to semistructured problems appropriate for middle management decision making. d. assumptions, responses to ad hoc queries, and graphic representations of existing data.
Answer: b Difficulty: Easy Reference: p. 480
- Analysis
An information system for a building company that tracks construction costs for various projects across the United States would be categorized as a type of:
a. DSS. b. MIS. c. GIS. d. CDSS.
Answer: b Difficulty: Easy Reference: p. 480
- These systems support decision making by enabling users to extract useful information that was previously buried in large quantities of data:
a. GSS. b. ESS. c. TPS. d. DSS.
Answer: d Difficulty: Easy Reference: p. 481
- The components of a DSS are the:
a. internal corporate database, external data sources, and analysis tools. b. data visualization tools, software, and graphics capabilities. c. database, graphics capabilities, and analysis tools. d. database, software system, and user interface.
Answer: d Difficulty: Medium Reference: p. 481
- A DSS database is a collection of:
a. historical data extracted from transaction processing systems. b. current or historical data from several applications or groups. c. external data typically mined from the Internet and other third-party sources. d. the corporation’s current transaction data.
Answer: b Difficulty: Medium Reference: p. 481
- Which type of model asks what-if questions repeatedly to determine the impact on outcomes of changes in one or more factors?
a. Optimization b. Sensitivity analysis c. Statistical d. Forecasting
Answer: b Difficulty: Medium Reference: p. 482
- Which type of model is used to help managers use historical data to estimate future conditions and sales figures resulting from these conditions?
a. Optimization b. Sensitivity analysis c. Statistical d. Forecasting
Answer: d Difficulty: Medium Reference: p. 482
- Backward sensitivity analysis software is used for:
a. supply chain optimization. b. historical what-if analysis. c. goal seeking. d. reverse forecasting.
Answer: c Difficulty: Hard Reference: p. 482
- Analysis
You would use an optimization model to:
a. project future conditions and predict the effect of these conditions on sales. b. determine the proper mix of products within a given market to maximize profits. c. determine the price of a product given fluctuating sales and advertising budget. d. establish the best relationship between price and sales and marketing budgets.
Answer: b Difficulty: Medium Reference: p. 482 Analysis in terms of categorize
- Analysis
Dell Computer’s online tools for selecting and customizing a new PC are a type of:
a. DSS. b. CDSS. c. Web-based GIS. d. Intelligent agent.
Answer: a Difficulty: Medium Reference: p. 491
- Analysis
As discussed in the chapter case, the COMPSTAT system developed by the New York City Police was a type of:
a. CDSS. b. PDSS. c. GIS. d. GDSS.
Answer: c Difficulty: Easy Reference: p. 492
- The easy use of graphics in an ESS allows the user to:
a. look at more data in less time with greater clarity. b. use creative analysis. c. quickly manipulate TPS and historical data. d. decentralize decision making.
Answer: a Difficulty: Easy Reference: pp. 493– 504
- ESS:
a. support the structured decision making of senior executives. b. have the ability to drill down into lower levels of detail. c. easily integrate data from different systems. d. are primarily driven by information derived from a company’s transaction processing systems.
Answer: b Difficulty: Medium Reference: p. 494
- Executives need a wide range of __________________ as well as internal data.
a. structured b. informal c. system d. external
Answer: d Difficulty: Easy Reference: p. 494
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- A well-designed ESS will allow management to:
a. have greater span of control. b. allow lower levels of management greater control. c. lessen the need to review lower levels of operation. d. all of the above.
Answer: d Difficulty: Medium Reference: p. 494
- The traditional measurement of value for companies includes financial metrics such as:
a. double-entry bookkeeping. b. ING metrics analysis. c. balanced scorecards. d. return on investment.
Answer: d Difficulty: Easy Reference: p. 495
- Which of the following features of an ESS supplements traditional financial metrics with measurements from additional perspectives, such as customers, or learning and growth?
a. Balanced scorecards b. Digital dashboard c. Graphic visualization tools d. Drill-down capabilities
Answer: a Difficulty: Easy Reference: p. 495
- Analysis
The information system used by Caesar’s Entertainment, which combines data from internal TPS with information from financial systems and external sources to deliver reports such as profit-loss statements, impact analyses, is an example of:
a. DSS b. ESS c. CDSS d. MIS
Answer: b Difficulty: Easy Reference: p. 49 6
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- In an electronic meeting system, group interaction activities include:
a. session planning, documenting organizational memory, enhancing personal productivity, and enterprise analysis. b. session planning, prioritizing, policy development and organizational memory. c. idea generation, evaluating complex problems, and large groups. d. idea generation, idea organization, prioritizing, and policy development.
Answer: d Difficulty: Hard Reference: p. 4 98
- GDSS:
a. are designed to allow meeting attendees to share their thoughts in real-time with their peers. b. support decisions that require knowledge about the geographic distribution of resources. c. are typically used with geographically dispersed attendees. d. implement structured methods for organizing and evaluating ideas.
Answer: d Difficulty: Hard Reference: p. 498
- GDSS are most useful for tasks involving:
a. session planning, organizational memory, personal productivity, and enterprise analysis. b. idea generation, complex problems, and large groups. c. idea generation, idea organization, prioritizing, and policy development. d. session planning, prioritizing, policy development, and organizational memory.
Answer: b Difficulty: Medium Reference: p. 4 99
- Synthesis
The chapter case discussing CPOE systems illustrates:
a. the quantifiable advantages of even simple CPOE systems in reducing the high rates of adverse drug events. b. the health risks engendered by physician non-compliance with CPOE systems. c. the complexity of merging legacy systems with new CPOE systems. d. the complexity of evaluating and managing new CPOE systems.
Answer: d Difficulty: Medium Reference: pp. 505 – 508
Synthesis in the sense of apply
Fill In the Blanks
- S tructured decisions are repetitive and routine, for which known algorithms provide solutions.
Difficulty: Easy Reference: p. 474
- The third stage in Simon’s description of decision making is choice.
Difficulty: Medium Reference: p. 4 76
- The concept of management filters describes situations in which managers act on biases that reject information that does not conform to their expectations.
Difficulty: Medium Reference: p. 479
- Model - driven DSS have analysis capabilities based on strong theories and used to perform “what-if” and similar kinds of analyses.
Difficulty: Easy Reference: pp. 4 80 – 481
- Of the three main DSS components, the software system comprises the tools used for data analysis.
Difficulty: Easy Reference: p. 4 82
- A(n) model is an abstract representation illustrating the components or relationships of a phenomenon.
Difficulty: Easy Reference: p. 4 82
- A(n) optimization model determines the best resource allocation to maximize or minimize specified variables.
Difficulty: Medium Reference: p. 4 82
- A(n) customer decision-support system (CDSS) supports the decision-making processes of an existing or potential customer.
Difficulty: Easy Reference: p. 4 91
- A Digital dashboard uses an easy-to-understand display to provide management with a comprehensive view of firm performance on a single screen.
Difficulty: Hard Reference: p. 495
- Group decision-support systems (GDSS) facilitate the solution to unstructured problems by a set of decision-makers working together as a group.
Difficulty: Easy Reference: p. 4 96
Essay Questions
- What is the business value of a DSS?
DSS can help companies improve supply chain management and customer relationship management. Some take advantage of the company-wide data provided by enterprise systems. DSS today can also harness the interactive capabilities of the Web to provide decision-support tools to both employees and customers.
Difficulty: Hard Reference: p. 490
- Analysis
If both contemporary ESS and DSS incorporate tools for modeling and analysis, what qualities distinguish the two types of system?
DSS are concerned with solving more specific business problems, such as determining the best pricing for a product, establishing optimized delivery routes, whereas ESS are designed specifically for executives to use as a way of managing the company and seeing an overview of both external and internal information in order to monitor more general business situations. The ESS modeling tools would be used to provide different views of status, rather than to analyze large amounts of data to arrive at a solution for a specific problem.
Difficulty: Medium Reference: p. 490 Analysis in terms of differentiate
- Synthesis
List and describe at least three ways in which GIS can be used by modern business.
Geographic information systems are a special category of DSS that use data visualization technology to analyze and display data for planning and decision making in the form of digitized maps. GIS can best be used to support decisions that require knowledge about the geographic distribution of people or other resources in scientific research, resource management, and development planning. GIS have modeling capabilities, allowing managers to change data and automatically revise business scenarios to find better solutions.
For instance, a company could display its customers on a map and then design the most efficient delivery route for its products. A second way in which it could be used would be to analyze demographic information to decide where to open branch restaurants. A third use could be customer demographic data and map information to locate people who are likely to become customers for the company’s services.
Difficulty: Hard Reference: p. 490
Synthesis in terms of propose, model
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- Evaluation
What do you see as the business value of a GDSS?
GDSS helps groups make decisions about unstructured problems. Firstly, because GDSS provides value by allowing collaboration over important decisions—the decision doesn’t rest in the hands of one person alone. By having more people working on the problem, the decision is more likely to realistically reflect the needs and goals of the group, rather than just one person. Secondly, because anonymity is a feature, people are encouraged to be more honest. This will also enhance the accuracy of the solution. The ability of the GDSS to record the meeting and decisions means that the decision-making process, its ideas and solutions, can be made part of the company’s knowledge base. Additionally, by providing structure, the GDSS may enhance the efficiency of the particular type of unstructured decision making.
Difficulty: Medium Reference: pp. 498 – 499
Evaluation in terms of assess, judge
- Describe and explain how a GDSS works to enhance group decision making. What are at least four factors involved in the successful outcome of any group meeting?
Beyond three to five attendees the traditional meeting process breaks down. GDSS software tools contribute to a more collaborative atmosphere by guaranteeing contributors’ anonymity so that attendees can focus on evaluating the ideas themselves. The GDSS software tools follow structured methods for organizing and evaluating ideas and for preserving the results of meetings, allowing non-attendees to locate needed information after the meeting. The documentation of the meeting by one group at one site can also be used as input to another meeting on the same project at another site. If properly designed and supported, GDSS meetings can increase the number of ideas generated and the quality of decisions while producing the desired results in fewer meetings.
The nature of electronic meeting technology is only one of a number of factors that affect meeting processes and output. The outcome of group meetings depends upon the composition of the group, the manner in which the problem is presented to the group, the facilitator’s effectiveness, the organization’s culture and environment, the quality of the planning, the cooperation of the attendees, and the appropriateness of tools selected for different types of meetings and decision problems.
Difficulty: Medium Reference: pp. 498– 499
