Question

When a manager knows little about the intended goals of a decision and the outcomes of the options are unclear, what type of situation are they in?
1. Ambiguity
2. Certainty
3. Uncertainty
4. Risk

Answer 1

Correct Answer - Option 1 : Ambiguity

The correct answer is Ambiguity.

• Managers make problem‐solving decisions under three different conditions: certainty, risk, and uncertainty.
• When a manager knows little about the intended goals of a decision and the outcomes of the options are unclear, they are in Ambiguity.
• When problems tend to arise on a regular basis, a manager may address them through standard or prepared responses called programmed decisions.
  • These solutions are already available from past experiences and are appropriate for the problem at hand.
• When information is so poor that managers can't even assign probabilities to the likely outcomes of alternatives, the manager is making a decision in an uncertain environment. 
  • These unstructured problems involve ambiguities and information deficiencies and often occur as new or unexpected situations.