HBRI HBRI - Hogan Business Reasoning Inventory Causal and Consequential Thinking 1 — Questions and Answers
Question 1: A retail chain observes that stores with longer operating hours consistently report higher customer complaints. A manager concludes that longer hours cause dissatisfaction. What is the most likely flaw in this reasoning?
- The manager should have used a larger sample
- A confounding variable — such as higher customer volume — may explain both factors (Correct answer)
- Longer hours always reduce service quality
- The conclusion is correct because the correlation is strong
Correct answer: A confounding variable — such as higher customer volume — may explain both factors
Confounding variables (e.g., more customers) can create spurious correlations that do not indicate causation.
Question 2: A software firm delays a product launch by 6 weeks to add features. Which is the most likely direct consequence of this decision?
- Marketing costs will decrease
- Competitor products may capture the market window the firm was targeting (Correct answer)
- Customer satisfaction will automatically improve
- Development costs will stay the same
Correct answer: Competitor products may capture the market window the firm was targeting
Delaying a launch allows competitors to enter the market first, potentially capturing the targeted customer base.
Question 3: Employee absenteeism rises sharply after a new performance-monitoring system is introduced. Which causal explanation is most well-supported by the sequence of events?
- Employees were already planning to be absent before the system launched
- The monitoring system likely increased stress or reduced morale, causing higher absenteeism (Correct answer)
- The absenteeism increase is unrelated to the new system
- Performance monitoring always reduces absenteeism over time
Correct answer: The monitoring system likely increased stress or reduced morale, causing higher absenteeism
The temporal sequence — system introduction followed by rising absenteeism — supports the monitoring system as a probable cause through increased stress.
Question 4: A company cuts its training budget by 30% to reduce costs. Over the following year, defect rates in production increase by 20%. What is the most reasonable causal inference?
- Defect rates increased due to unrelated equipment failures
- Reduced training likely degraded worker skill levels, causing more defects (Correct answer)
- Training budget cuts always improve productivity
- The 20% defect increase is within acceptable variance
Correct answer: Reduced training likely degraded worker skill levels, causing more defects
Reduced training reduces employee competency, making process errors and defects more likely.
Question 5: Sales of a product decline after a price increase. A manager claims the price increase caused the decline. Which additional evidence would best confirm this causal claim?
- The product was not advertised during the same period
- Surveys show customers switched to cheaper alternatives specifically because of the higher price (Correct answer)
- Sales of other products also declined at the same time
- The price was raised by only a small amount
Correct answer: Surveys show customers switched to cheaper alternatives specifically because of the higher price
Direct customer feedback linking the purchase decision to price change provides the strongest confirmation of the causal claim.
Question 6: A department implements flexible work hours and subsequently reports higher employee engagement scores. What is the most cautious interpretation of this finding?
- Flexible hours definitively caused higher engagement
- Flexible hours are correlated with higher engagement, but other factors may also contribute (Correct answer)
- The engagement increase will persist indefinitely
- The policy should be reversed to test the causal link
Correct answer: Flexible hours are correlated with higher engagement, but other factors may also contribute
Observing correlation after a change suggests a relationship, but controlled conditions are needed to establish definitive causation.
HBRI HBRI - Hogan Business Reasoning Inventory Causal and Consequential Thinking 1
A retail chain observes that stores with longer operating hours consistently report higher customer complaints.
A manager concludes that longer hours cause dissatisfaction.
What is the most likely flaw in this reasoning?