3746306 the Role of Intuition in Managerial Decision Making

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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

Transcript of 3746306 the Role of Intuition in Managerial Decision Making

Page 1: 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

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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

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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.

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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,

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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.

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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).

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“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)

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