Type 1 error occurs when...

• A. The environment is actually stable, but leaders perceive turbulence and take unneeded actions
• B. The environment is turbulent but leaders fail to act
• C. The environment is stable and leaders take no action
• D. There is no data to inform decisions

Answer: (A)

Type I error means acting on a false signal of change. When the environment is actually stable but leaders perceive turbulence and take unneeded actions, they are responding to a problem that isn’t real. That false positive—detecting change where there is none—leads to unnecessary actions and wasted resources.

In contrast, if the environment is turbulent but leaders fail to act, that’s a missed response to real change (a Type II error). If the environment is stable and no action is taken, there’s no erroneous signal being acted on. If there’s no data to inform decisions, that’s about uncertainty and decision quality, not specifically about incorrectly detecting change.