3746306 the Role of Intuition in Managerial Decision Making
-
Upload
summer-mamun -
Category
Documents
-
view
20 -
download
5
Transcript of 3746306 the Role of Intuition in Managerial Decision Making
Abstract:
Today’s fast changing organization and uncertain surroundings have been searching managers
who can approach with not only rational mind set but also his intuition. Some times
overemphasizing the intuition can be led to disastrous decision and fully rational thinking will
lead to a decision which is far too late to implement. So to mix these two with proper proportion
can give an efficient solution with less time to waste. So, we analysis the measures which deal
with intuition and how to enhance the intuition power. Though much of the research on decision
making is from rational perspective but with responsibility of managers getting bigger and bigger
and much quicker decisions are necessary so, decision in crisis and effect of emotional condition
are also getting importance along with analysis and systematic ways.
There is a difference of quality in an intuitive leader and intuitive expert, the first one is more like
an emotion driven steps and the later is a combination of both technical sound knowledge and
experience. Some may confuse this with “non-rationality” but this is not.In many occupation
people may have to give decision in an unguent manner like in police, fighters, paramedics but
they develop this skill by vigorous training, drill and practice .this training make them this as
their second nature. Also we can find intuitive decision in sports also .but some one can get all
this by thorough analysis which will take much more time to get a complex but proper solution.
Introduction:
Highly complex and important decisions are the most prone to distortion because they tend to
involve the most assumptions, the most estimates, and the most inputs from the most people
(Hammond, 2006:84).adding to this, in real world the better manager is who can give good
enough decision much quicker not who can give the best decision which is too late. Most people
can’t understand a problem from a holistic point of view; they have to curve it down to a smaller
portion so that it covers the area of their expertise though most of the time the optimum solution
may have been slipped out by this. Researchers say, smart, motivated people are rational and less
Smart, less well-motivated people are less rational (stanovich, Keith, Thompson, Valier,
2001:77). Though smarter and more motivated ones may be more rational but none can formulate
and solve complex problem with full rationality.
A person being a fully rational or bounded rational, some times situations demand instant
decision which can’t give much time for acquire data, evaluate, formulate and viewing the
alternatives. There comes the importance of intuition. when it comes to good quality intuitive
decisions, there is a close relationship between natural ability to sense the essential elements of a
sound decision, and nurturing the ability to do so(patton,2003:989).intuition decision making
depends on managers awareness, experience and knowledge rather than acquiring of
information. .time doesn’t always permit a clear thought out idea to put in. a study showed how
decision-makers rely on their past experiences to recognize situations in natural settings (Klein,
1993:137-148).so when pressure situation comes intuition works better but overemphasizing the
intuition can be of serious mistake on the part of a manger, cause hunch and guess cant be a
standard model for every problem. The intuitive decision-making model may not leave out
rationality completely; instead, it may be the integration and combination of rationality and
intuition (Simon, 1987).so, using both rational and intuitive thinking it’s possible to make better
decision much quicker.
Background:
Researchers are enthralled by intuition even more. When someone is jumbled with huge amount
of information, when some one has to deal with lot of uncertain events and in crisis intuition has a
great role to play. One might call intuition as a totally irrational, instant and fully emotionally
decision to a situation. On the other hand, intuition might be an option to the decision maker as
fairly during systematic analysis about the choices available. (Patton, 2003:989).since 1950s, it
has been known that organization of material in the brain provides neural receptors and prepares
pathways for storing new information (Vaughan, 1966: 1293-1294)
Herbert Simon is one of the greats who studied human decision making for decades and has come
to the ending that, past practice helps man to store essential events in their minds and recover
them as situation demands. Despite the fact that there are few examination in the business field,
some disagree with Simon’s argument that “intuition and judgments are simply analysis frozen
into habit” (Simon, 1987:57-64).According to many great researchers in decision making field
there are three restrictions to the control of human in reasoning that could turn skill and
performance into proficiency and in to idea by outline involvement and chunking of the
connected information. The first one is limitation of attention area, lack of perfection in the case
of multitasking and lesser parallel dealing. Second one is limitation in solving a problem with
thorough analysis. Third one is power of individual memory. Experts, though, emerge to
understand and assess large quantities of information rapidly. They do not essentially scrutinize
the surroundings or process information any quicker than an inexpert individual; rather they have
learned to produce the sense of certain patterns of action and activity. The experienced veteran
recognizes and reacts to prepared patterns by portioning. (Agor, 1988:68-70)
Expertise is a combination of both analysis and intuition. Only experts can see and diagnose the
problems and understand that the new problems really are not that new and not independent of
old ones. Simon (1965:57-64) proposed every organization as a three layer cake. Bottom layer
performs the basic work and process them. The middle one does the systematic designs works
and the top layer are all about intuitive decisions. When experts examined the middle part, they
came to learn that they all avoid the irregular, uncertain options and maintain an organized
system to take a decision. ultimately the top layer link all the middle layer decisions and group
the applicable patterns, after connecting every thing it seems like a fully sole unit and it takes
fewer memory and consideration .
According to Simon, when we take any decision based on intuition we follow the rules and
regulation that we are not fully clear, it’s more like based on perception.
Source of intuition:
Intuition is something that eludes scientific analysis for years. Too difficult to define and measure
with our gadgets at present available. It’s been thrown to field of philosophy. Main question is
how to map intuition. Most experiential exploration was originally limited to qualitative
techniques. Most of the experiment was done for small groups of individuals, so those result
wasn’t capable of stand on them at best. We define intuition as a non-sequential information
processing mode, which compromises both cognitive and affective elements and results in direct
knowing without any use of conscious reasoning (Epstein, 1996:390).
There are three sources of intuition.
a. Inborn reaction: the feelings that brings our suitable reaction but in an unintentional mind
for a decision taking circumstances. Some times, this thing happens for animals, human
beings when they are alert without being warned before.
b. General practice: the knowledge that mount up with aging and understanding.
c. Attentive learning: the spirit within individual which drives each of us to learn to develop
intuition.
Types of intuition:
Common use of intuition suggests three types of intuition. The first one is socioaffective intuition
.which affects interpersonal relationships and operates normally when asking to solve a person or
a circumstance. It also includes sympathy to other people’s requirement and emotion. Immediate
liking of disliking and the aptitude to appreciate and direct situations connecting touching
parameters. This kind of intuition is alike what we call “intellectual sympathy” which relates one
to another. The second one is more like an applied one. It is a result of completion of a specific
task or giving solution to something. Famous people mostly experience this sort of intuition. The
final type is like some perception towards future with incomplete information, a great example of
this kind is Winston Churchill. when he once had a feeling that he should sit in the car on the side
opposite to where he sit usually , later a bomb exploded under his usual seat
(Rockenstein,1988:77-84)
Intuition in management and other domain:
when it comes to taking a good decision there is a close relation ship between natural ability and
enriching the ability by practicing. Even, executives and managers can give better intuitive
decisions if they consciously develop decision making habits. When the amount of information
increases, it’s become more and more difficult to take proper decision by intuition .because at
lower level organization leader are more successful at taking decision .according to Simon
(1997), there are two types of managers. One type mostly depends on intuition and other type
solely depends on analytic techniques. The effectiveness of problem solving can be higher if
proper mixing of these two can be ensured.
Intuitive reactions are necessary, or helpful, whenever we are uncovered to the requirement for
quick, instant and proper actions, or when the circumstance is very difficult. While mainly,
academic, there is certainly also a natural part because some one can place out from others no
stuff how hard it can be tried. In a more simple fashion, the process of obtaining intuitive analysis
is obvious in learning to read. It begins with practicing recognizing letters and then commences
from there to appreciation of words and even of full phrases till the capability to read matures
from stringing collectively letters to confident voicing of widespread printed material. However,
this is important to remember that all the intuitive decision is not instantaneous but that they
might be, sometimes is an intuitive constituent in carefully measured decisions. A decision
maker, who is aware of affect of consequence of an intuitive decision, is likely to hit an effective
equilibrium between reflection of analyzed data and options, and the intuitive part (Patton,
2003:989)
Four measures that deals intuition :
Now we turn our notice to the result stage and inspect how to calculate the use of intuition in
decision making .there are four actions that compact with intuition.
a. intuitive management survey (Agor,1989:46)
Intuitive management survey is one of the very views that deal with the measurement of intuition
by researcher rather than explorer. The main target of intuitive management survey is to make
further development of ability of making practical management decisions successfully on the
base of feelings, even the person who is taking decision in support of inadequate information.
b. international survey on intuition : (Parikh ,1994: 255)
In this survey it shows that intuition is a multilevel and multi-contextual occurrence.
Isis mainly deals with person’s perception of dealing with intuition rather than thinking it as a
general use. It was introduced for large scale association research in to intuitive decision making.
c. rational-experiential inventory : (Pacini,1999:972)
This research shows intuition and rationality as two different entities. Also, this research tries to
differentiate between these two and skill and commitment in both scales. This degree measures
ability as a dispositional inclination not real, however. Opposing to other two measures we
reviewed this survey items measure expressive elements of intuition.\
d. intuitive profile: (Cappon,1993:40)
This measurement instrument only deals with visual test rather than verbal use. But this doesn’t
include emotional elements. Also, it contains trouble solving pace and aptitude to solve with
partial data, which is similar to taking decision in uncertain and vague state and time force.
Enhancing intuition:
there is very little to do with increasing natural intuition power, thinking and measurements .But
with general experience and focused learning we can do a lot improvement and analysis.. . (The
first of those two components is general experience needs more sense towards any situation and
more effective knowledge of the problem and heightened capability to deal with situations.
practicing daily positive and negative of every decision can make some one to get a greater
knowledge of general experience to apply this in a intuitive decision making process.. If, at the
same time, the assumptions, which promote the decision, are also examined, the effect of general
experience will be more prominent on making decision. How many parts of that solution come
from intuition and how much part from analysis is a silent question. But whatever intuition
contributes towards decision making, the portion is not that important. The main target is to grow
a habit to increase the insight which might help to better analysis the situation which will improve
decision making.
Focused learning is the third type of intuition where most of the work can be done to improve.
Whether it is for immediate, unconscious, proper responses to, or actions in emergency, or for
enhancing the eminence of measured decisions, growth of habits is the solution. For the instant
reactions where mindful thought is only a little determinant of act, habitual practice is the way
towards behavior that get to the "gut-level" or become part of "muscle-memory"
(Patton,,2003:989).
Conclusion:
For suitable natural, intuitive decisions and performance. To emergencies and to circumstances
involve immediately proper reply, widespread drill, even practice, is one of the best likely
training. For decisions when time is not a constraint, the practice of the ability of making sound
decision that take in to consideration all surrounding issues fast and successfully comes into view
to be the most excellent preparation. Certainly, there are limitations to intuitive decisions but
as more is learned from cognitive science and experiential dimensions, the more training,
usage and understanding of intuitive decision making will be commonplace, and this will
undoubtedly become much more widespread in business administration and management
(Patton,2003:989).
“It is by logic that we prove, it is by intuition that we invent for logic remains barren unless
fertilized by intuition “(Ploicastro, 1995:99-113)
REFERENCES:
Agor, W. 1989.”Intuition in Organizations: Leading and Managing Productivity”. Sage,
Newbury Park, CA
Agor, W. 1988, "Finding and developing intuitive managers", Training and Development
Journal, Vol. 42 No. 3, March, pp. 68-70.
Cappon, D. 1993. “The Anatomy of Intuition”. Psychology Today, 26(May-June): 40-91.
Epstein, S., Pacini, R., Denes-Raj, V. and Heier, H. 1996 “Individual Differences in Intuitive-
experiential and Analytical-rational Thinking Styles”. Journal of Personality and Social
Psychology 71 (2): 390-405.
Hammond .2006.”The hidden traps in decision making”. Harvard Business Review.Vol. 84,
Issue 1
Klein, G.A. 1993. “Decision making in action: Models and methods”. Ablex, Norwood, NJ, pp.
138–147.
Pacini, R. and Epstein, S. 1999.”The Relation of Rational and Experiential Information
Processing Styles to Personality, Basic Beliefs, and the Ratio-bias Phenomenon.” Journal
of Personality and Social Psychology 76(6): 972-87.
Parikh, J., Neubauer, F. and Lank, A. G. 1994. “Intuition: The New Frontier in Management”.
Cambridge, MA: Blackwell.
Patton Jh. 2003. “Intuition in decisions”. Management
Decision 41, no. 10, (November 30): 989-996.
Policastro e. 1995.”Creative intuition: an integrative review” creativity research Journal.2,
pp.99-113.
Rockenstein z.1988.” intuitive process in executive decision making”. Journal of creative
behavior. 22:2, pp.77-84, 1988
Stanovich, Keith E, & Thompson, Valerie .2001.” Who is rational: studies of individual
differences in reasoning? “Canadian Journal of Experimental Psychology, 55(1): 77-79.
Simon, H. 1965.” The Shape of Automation.” Harper & Row, New York, NY.
Simon, H. 1987."Making management decisions: the role of intuition and emotion". Academy
of Management Executive, Vol. 1 No. 1, pp. 57-64.
Simon, H.A., 1967. “Motivational and emotional controls of cognition.” Psychologica-l
Review 74 1, pp. 29–39
Sayegh L. Anthony W. Perrewe P. 2004. “Managerial decision-making under crisis: The role of
emotion in an intuitive decision process “.Human Resource Management Review.
vol.14.issue 2.pp:179-199.
Vaughan, F. E. 1979. “Awakening Intuition.” New York: Doubleday.