HBRI - Hogan Business Reasoning Inventory Causal and Consequential Thinking Flashcards
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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?
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.
A software firm delays a product launch by 6 weeks to add features. Which is the most likely direct consequence of this decision?
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.
Employee absenteeism rises sharply after a new performance-monitoring system is introduced. Which causal explanation is most well-supported by the sequence of events?
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.
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?
Answer: Reduced training likely degraded worker skill levels, causing more defects
Reduced training reduces employee competency, making process errors and defects more likely.
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?
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.
A department implements flexible work hours and subsequently reports higher employee engagement scores. What is the most cautious interpretation of this finding?
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.