Critical Thinking and Decision Making Flashcards

Which of the following best describes the concept of 'critical thinking'?

Answer: Evaluating arguments and evidence to form well-reasoned judgments

Critical thinking is the objective analysis and evaluation of an issue in order to form a judgment, rather than passively accepting information.

In decision making, 'bounded rationality' refers to:

Answer: Making decisions within the limits of available information and cognitive capacity

Bounded rationality, coined by Herbert Simon, recognizes that decision makers operate with limited information, time, and cognitive resources rather than perfect rationality.

Project A has a 70% chance of earning $100,000 and a 30% chance of losing $50,000. What is the expected monetary value of Project A?

Answer: $55,000

Expected value = (0.70 × $100,000) + (0.30 × −$50,000) = $70,000 − $15,000 = $55,000.

Which decision-making model assumes that decision makers have complete information and always select the best possible option?

Answer: Rational model

The rational model assumes perfect information, clear objectives, evaluation of all alternatives, and selection of the optimal solution—an idealized approach rarely achievable in practice.

'Confirmation bias' in decision making refers to the tendency to:

Answer: Seek information that confirms pre-existing beliefs

Confirmation bias is the tendency to search for, interpret, and recall information in a way that confirms one's pre-existing beliefs, leading to poor decision quality.

Which analytical tool helps decision makers evaluate options under uncertainty by mapping out possible choices and their outcomes?

Answer: Decision tree

A decision tree is a diagram that maps possible decisions, their outcomes, and associated probabilities, helping managers evaluate alternatives under uncertainty.

The 'devil's advocate' approach in group decision making is used to:

Answer: Challenge the prevailing view to improve the quality of analysis

The devil's advocate approach assigns someone to critique the dominant solution, forcing the group to examine assumptions and improve the quality of the final decision.

Which of the following best illustrates 'groupthink' in an organizational setting?

Answer: Team members suppress dissenting views to maintain group harmony

Groupthink occurs when the desire for group harmony overrides realistic appraisal of alternatives, causing members to suppress doubts and conform to the apparent consensus.

In critical thinking, an 'ad hominem' fallacy occurs when:

Answer: An argument attacks the person making it rather than addressing the argument itself

An ad hominem fallacy occurs when someone attacks the character or circumstances of the person making an argument rather than addressing the argument's actual merits.

Which problem-solving technique involves generating a large number of ideas without initial judgment or criticism?

Answer: Brainstorming

Brainstorming is a creative technique where participants generate a large number of ideas freely, with evaluation deferred to a later stage to encourage creativity and volume.

A manager notices that sales dropped after launching a new marketing campaign and concludes the campaign caused the drop. What logical error has been committed?

Answer: Post hoc ergo propter hoc

Post hoc ergo propter hoc is the fallacy of assuming that because one event followed another, the first must have caused the second, without establishing actual causation.

The 'Pareto Principle' (80/20 rule) applied to decision making suggests that:

Answer: 20% of causes produce approximately 80% of effects

The Pareto Principle states that roughly 80% of effects come from 20% of causes, helping managers focus attention and resources on the most impactful factors.

In decision making under risk, which technique calculates the average outcome by weighting each scenario by its probability?

Answer: Expected Monetary Value (EMV)

Expected Monetary Value (EMV) is calculated by multiplying the value of each outcome by its probability and summing all products, providing an average outcome across all scenarios.

Which of the following best represents 'lateral thinking' as a problem-solving approach?

Answer: Approaching problems from unexpected or creative angles

Lateral thinking, a term coined by Edward de Bono, involves approaching a problem from creative, indirect angles rather than through conventional step-by-step logic.

The 'satisficing' approach to decision making, proposed by Herbert Simon, means:

Answer: Selecting the first acceptable solution rather than exhaustively seeking the best one

Satisficing refers to choosing a solution that is 'good enough' rather than searching exhaustively for the optimal one, recognizing practical limits of time and information.

Which of the following is a key characteristic of 'wicked problems'?

Answer: They are complex, ill-defined challenges with conflicting stakeholder values

Wicked problems are complex, ill-defined challenges with no single correct solution, often involving conflicting stakeholder values and incomplete or contradictory information.

A 'SWOT analysis' is primarily used to:

Answer: Assess an organization's strategic position relative to its environment

SWOT analysis evaluates internal strengths and weaknesses alongside external opportunities and threats to support strategic decision making.

Which of the following best represents 'divergent thinking'?

Answer: Generating multiple possible solutions to an open-ended problem

Divergent thinking is a creative thought process that generates multiple ideas or solutions for an open-ended problem, contrasting with convergent thinking that seeks a single correct answer.

In decision making, 'risk aversion' describes a preference for:

Answer: A certain outcome over an uncertain one with the same expected value

A risk-averse decision maker prefers a certain outcome over a gamble with an equal or even slightly higher expected value, prioritizing security and predictability over potential gain.

The 'Five Whys' technique is used in problem solving to:

Answer: Identify the root cause of a problem by repeatedly asking 'why'

The 'Five Whys' technique involves asking 'why' up to five times in succession to uncover the root cause of a problem, moving beyond surface-level symptoms.