Reference no: EM133299949

1. Christos recently inherited his favorite uncle's summer home. With no need for the summer home, he decided to sell it. Given his attachment and memories of the home, he has priced the home at 35% above the market value and comparable summer homes.

This would be an example of which cognitive bias?

endowment effect

controllability bias

confirmation bias

sunk cost fallacy

2. Kaya is a manager to a regional grocery store. Profits have been declining in recent months and she is under a lot of pressure from corporate headquarters. She understands the problem, but she is not sure what would be the solution. She decides to use a rational decision-making model to determine the best path for a solution.

Since the problem has been defined, now Kaya has to:

generate alternative solutions

evaluate the alternative solutions

identify additional opportunities

evaluate the solution

3 .Top management at Techland wants to maintain its good reputation for treating customers fairly, so the company's salespeople are on a fixed salary rather than being paid on commission. Richard is an experienced salesperson with strong sales skills who is known to care a lot about only selling customers what they need. Marty on the other hand, is a salesperson who is relatively inexperienced and sometimes pressures customers by trying to sell every possible feature, without much regard for the customers' needs. Marty has higher sales figures and is seen as a star, whereas Richard is seen as only average.

Marty's higher standing is most likely arising from:

slippery slope

overvaluing outcomes

ill-conceived goals

indirect blindness

4. Roberta is the CEO of a highly profitable, mid-sized, auto supply company. Her CFO has raised concerns that the vice-president for sales might be providing favoritism to certain sales managers in their annual bonuses, but Roberta doesn't think there is a problem. Based upon the CFO's concern, Roberta briefly asked the top three performing sales managers if they have any concerns about their assignments and their bonuses. All report no problems, so Roberta doesn't follow up.

Roberta is most likely being influenced by which of the following decision-making biases?

confirmation bias

distortion of consequences bias

anchoring bias

endowment bias

5. At Miraclewidget, the salespeople make most of their earnings through commissions for sales that they make. Marty has a reputation for trying to sell every possible feature, without much regard for the customers' wants or needs. Marty tells another salesperson that he knows he's selling customers something they don't really want, but that is fine, because that's what management wants. "It's really their fault, not ours-just look at how they pay big commissions," he says.

What type of rationalization does Marty seem to be using here?

moral justification

advantageous comparison

displacement of responsibility

distortion of consequences

blaming the victim

6. Which of the following biases is likely to be evident in entrepreneurs who start new ventures, despite the high rate of new business failures for similar ventures?

representativeness

overconfidence

anchoring effect

framing

confirmation

7. A software company has agreements with several large companies to license their software. After many months of development, a new software has been released and sold. Recently, two companies have asked about the software's security features since their internal reports show some potential for hackers to access the software. Management disregards this information and continues to push for the software to be sold in order to reach their sales goals.

This is an example of which ethical barrier:

ill-conceived goals

indirect blindness

motivated blindness

slippery slope

8. At Regional Bank One, top management created a quota system that incentivized the bank managers and employees to cross-sell multiple financial products to their clients. Failure to meet those quotas resulted in severe repercussions, including termination in some cases. To meet these expectations, hundreds of fake accounts were created.

This example best describes which ethical challenge?

ill conceived goals

indirect blindness

undervaluing outcomes

utilitarianism

9. Alex manages a team responsible for developing a new manufacturing process. Unfortunately, piloting the new process has been costly and has been showing limited success. Alex feels that his team just needs to work harder and continues to invest more resources into the project.

Which of the following biases is Alex likely experiencing?

overconfidence

confirmation bias

escalation of commitment

present bias

10. A student who is caught plagiarizing a small portion of an exam question says, "but other students cooperated and shared entire answers off of a website."

This is an example of:

moral justification

advantageous comparison

blaming the victim

distortion of consequences