Decision-Making Basics
This type of decision is routine and follows established rules or guidelines.
Programmed
What is it called when a company expands backward or forward along its supply chain through this strategy.
Vertical integration
Planning starts with identifying an organization’s purpose, also known as this.
Mission Statement
This happens when a group values harmony over critical thinking, leading to poor decisions.
groupthink
A bakery’s oven breaks down the week before Thanksgiving. The manager realizes production will fall behind unless something changes.
Which step of the decision-making process is this?
Recognizing the need for a decision
This model assumes managers have all the information they need and can make the best possible choice.
classical model of decision making
A company entering an entirely unrelated industry, like Virgin moving from music to airlines, is using this strategy.
Unrelated diversification
These three questions help define the business: Who are our customers, what needs are we satisfying, and ________?
How are we statisfying those needs
A person assigned to challenge the group’s ideas and point out flaws is playing this role.
Devil's Advocate
After noticing customer complaints about slow service, a café owner lists several options: hire another barista, buy a faster espresso machine, or simplify the menu.
Which step is she performing?
Generating alternatives
When a manager makes a “good enough” choice rather than the perfect one, they are practicing this.
satisficing
Tesla built its own Gigafactory to produce batteries instead of relying on outside suppliers.
Is this forward or backward vertical integration?
backward vertical integration
because it gives greater control over inputs, reduces supplier costs, and strengthens supply chain reliability.
The three levels of planning are corporate, business (or divisional), and this level.
Functional
This is the loss of productivity that occurs when brainstorming gets too chaotic or unstructured.
production blocking
A small retailer compares the cost, risk, and potential payoff of three marketing plans before choosing one.
Which step is this?
evaluating alternatives
Name one reason information is often incomplete when managers make decisions.
risk, uncertainty, ambiguity, or time constraints
Selling the same standardized product globally uses this strategy.
global strategy
These two words describe how a company plans to outperform rivals and create value.
Competitive advantage
This technique has group members write down ideas first, then discuss and rank them.
nominal group technique
A manager decides to implement flexible scheduling for employees but must train supervisors and adjust payroll systems to make it work.
Which step of the decision-making process is this?
implementing the decision
A manager at a local restaurant is deciding whether to add online delivery. She has limited data and little time but must still choose.
Which decision-making model best describes her situation, and why is it more realistic than the Classical Model?
Administrative Model, because it recognizes uncertainty, incomplete information, and satisficing rather than perfect rationality.
Customizing products and marketing strategies for each country reflects this international approach.
Multi-domestic Strategy
A planning exercise that identifies internal strengths and weaknesses, and external opportunities and threats.
SWOT analysis
A company that encourages employees to think creatively and learn from mistakes is called this.
learning organization
A local gym launches a social media campaign to attract new members but finds it didn’t increase sales. The manager reviews the data, talks to staff, and identifies what went wrong before planning next steps.
Which step is this and why is it important?
Learning from feedback; it helps managers identify what worked or failed so they can improve future decisions.