Intuition in managerial decision-making

  • Category:
    Management
  • Document type:
    Essay
  • Level:
    High School
  • Page:
    3
  • Words:
    2054

The Role of Intuition in Managerial Decision-Making

  1. Introduction

Intuition refers to the ability to comprehend and interpret situations and events without the need for conscious way of thinking. In the management field, experts acquire this skill after several years of experience in their work environments. Intuition involves a number of experiences which are subconsciously available in an individual’s mind. Moreover, it is able to deal with multifaceted situations which could otherwise not be handled by the conscious brain. Additionally, this process is fast, in that in permits a person to figure out how to act in a given situation without spending time to analyze it. Also, it is not based on emotion. As a matter of fact, an emotional person deters his or her ability to make decisions based on intuition. Considering intuition-based decisions are derived from the subconscious mind, they are not biased. On the contrary, they are most likely to be accurate and precise. Intuition is dependent on intense comprehension of a situation. Therefore, it is used in making the most important managerial decisions besides the rational-analytical methods (Klein 43).

Past research on intuition faces some challenges. To start with, little scholarly research has been done regarding this topic. Even for the studies that have been done, they mostly relate to the field of psychology rather than business and management. Moreover, different scholars have come up with contradicting definition of the intuition process. Therefore, this affects the implications it has on managers in terms of decision-making. Lastly, despite the fact that earlier research has elaborated on the application of intuition in managerial decision-making, little has been examined regarding how organizations perform as a result of using this process (Klein 43)

This study aims at elaborating the limitations stated above. Moreover, it seeks to give a detailed definition of intuition and further expand on the relationship with organizational performance, as well as that of senior managers.

    1. Purpose of the study

To examine how intuition has been used in making decisions as well as improving behavior.

2.0. Theoretical Framework

This study is based on the contingency theory which states that managers make decisions based on factors that are significant in that current situation. In this case, leaders in an organization are free to practice different ways to solve a situation. This theory assumes that organizations are delicate structures that require careful leadership to meet internal and external needs. Moreover, it states that there is no better way of leading a business; rather, it depends on the situation at hand. Overall, the theory emphasizes on the necessity of managers to focus on organizational success (Judge 17).

Another theory related to this research is the systems theory which permits managers to examine the various patterns and structures in a working environment. Through this analysis, the management understands how employees are affected by these systems and vice versa. As a result, functional programs can be put in place to benefit the organization as well as its staff (Judge 20).

Finally, this study relates to the chaos theory which states that due to technological advancements as well as business dynamics, organizations cannot avoid change. The more organizations grow and increase their activities and events, the more likely they are to be susceptible to change. Therefore, managers are required to make careful decisions which enable the organization to exist in this constantly changing environment (Judge 22).

All the theories mentioned above relate to the topic under examination. This is because they all involve manager’s abilities to make decisions regarding the events related to a particular organization. Moreover, they are linked to various ways in which businesses could either improve or degrade their performance as a result of implementing these decisions.

  1. Literature Review

A study conducted by (Khatri 57) aimed at investigating how intuition is applied in solving organizational problems. This study examined managers in different fields of banking, computer and utility industries in the United States. Findings from this research proved that organizations apply intuitive procedures in making decisions. Moreover, in an unstable environment, intuition was found to bring positive results in an organization’s performance. On the other hand, negative results were observed in terms of performance linked to intuition-based decisions in stable environment.

Another study carried out by (Klein 40) compared how computerized decisions differed from intuitive decisions in regards to an education system. In this case, two groups of respondents were selected and requested to come up with a solution to an educational problem. One group was given a small number of ways to solve a small number of issues. This was aimed to look at the impact of the given means. Moreover, the second team was offered several alternatives to come up with solutions to a large number of criteria. As a result, both groups were observed to bring similar results to simple questions using both intuitive and computerized methods. However, these two methods brought about different results, when respondents were asked to solve complex questions.

(Hayes 403) measured the level of intuition based on gender. In other words, the study aimed at examining whether women had higher levels on intuition as opposed to men, or vice versa. This study used the cognitive study Index to calculate intuition levels of leaders working in Britain. The findings showed minimal intuition levels amid male and female leaders. However, it was interesting to note that female non-managers portrayed higher analytical skills compared to the male leaders.

(Pretz 554) investigated the consequences of experience, analysis and intuition in the process of decision-making and solving problems. Undergraduate students were taken as a sample. In this case, they were asked to respond in the study so as to examine their methods of dealing with problems regarding their lives in university. According to the responses received, individuals used different strategies to solve problems depending on their levels of experience. With that said, more experienced individuals were observed to prefer the intuitive method compared to the inexperienced respondents who chose the analytical method in solving problems.

According to a discussion done by (Ashkanasy 353) with managers of different companies, he found out that intuition and analytical methods were used together in making decisions. Moreover, he elaborated on the factors that led to decision-making styles which include: problem, context or person and the decision.

According to (Miller 43), Australian organizational leaders used intuition to make decisions. Interviews involving ten leaders were carried out to test this experiment. Findings showed that leaders preferred to use intuition to use intuition during complex situations that involved people.

(Lemminick 7) looked at the association connecting features of resolution tasks, decision styles and effectiveness of deciding on issues. According to cognitive styles, intuition and analysis is acknowledged and evaluated for their relative usefulness, under various task conditions. Propositions are made on the basis of relations between decision task features and the chance of applying two cognitive systems, considering potential moderators of decision-making usefulness. This study also elaborated on the implications as well as suggestions involving management.

    1. Research Questions:

This study is based on the below research question:

RQ 1: Does intuition play a role in managerial decision-making?

    1. Hypothesis

This study is based on the below hypothesis:

H1: There is a strong correlation between time, information, uncertainty, risk and intuition-based decision making.

Methodology

This research selected staff from five university faculties including; education, science, arts, engineering and building. These faculties were selected to make the data collection process easier. One hundred and fifty questionnaires were selected for the study using the interview method. Majority of the respondents were between the ages of 30-45 years old. Notably, the females were 43% of the total staff, totaling the male population to 57%. Most of the respondents had ten and above years in experience. The respondents were requested to state their level of intuition during decision-making using a range that included; one for powerfully concur, two for concur, three for unbiased, four for differ and five for powerfully differ (Lipusek 181)

  1. Findings

Results showed that there was no difference in terms of the level of intuition between male and female university staff regarding their style of making decisions. Moreover, from the results that were obtained, no significant difference was noted among respondents belonging to different age groups, levels of academic professions, years of experience or even gender in regards to their styles of making decisions.

Additionally, the study looked at dependent and independent variables. With that said, it can be finalized that there was a significant relationship with availability of information, management of risks, time consciousness as well as uncertainty. Using the multiple regression analysis method to examine intuition levels, findings concluded that negligible correlation was observed regarding uncertainty, time consciousness and the intuitive style of decision-making. Therefore, this automatically proposes and agrees with the hypothesis.

  1. Discussion

This study shows that most of the academic staff preferred to use intuition in their decision-making processes. When these individuals sought to decide on a situation, they resolved to use the gut feeling as well as their conscious which they believed was correct. This can be interpreted to mean that academic staff preferred to trust their opinion rather than those of others. Moreover, the findings show that the staff dependent on situation analysis which requires use of intuition to make decisions when the facts are scarce, time is limited and they are not sure about some issues. Most respondents notably focused on their level of uncertainty about events as well as availability of information about issues. On the contrary, few individuals considered risk as a factor when making intuitive decisions. In terms of demographics, there was a negligible difference in intuitive decision-making.

There was a high correlation between information availability and the ability to make decisions based on intuition. Due to the fact that academic staff were knowledgeable, skilled and had a high level of experience, they believed in their individual abilities to solve issues. Therefore, they relied on intuition for decision-making. Moreover, some respondents had little or no information regarding some issues which were complex or had never been encountered before. As a result, intuition was used to solve these problems. Notably, individuals ready to partake risks also used intuition to make decisions. On the basis of academic staffs, negligible correlation was observed between levels of uncertainty and time in regards to use of intuition. This means that these factors did not affect use of intuition to make decisions.

  1. Conclusion

The above research looks at the application of intuition when deciding on solutions to issues. Interviews were used to test staff in a University. The aim was to examine their levels of intuition in regards to making decisions and solving problems. The study discovered that due to the high levels of experience, knowledge and skill, most of the staff relied on intuition in making decisions.

Future research should not only test the intuition decision-making style but also include other ways for instance, the analytical style of decision-making so as to compare with factors such as time, uncertainty, and risk and information accessibility. Moreover, to scrutinize the effect of intuitive decision-making, other factors such as innovation, environment and learning performance should be included in order to get a clear image of intuition. Lastly, future studies should incorporate a number of universities, organizations and faculties as well as use both qualitative and quantitative methods of research. These will enable a variety of responses to add to the intuition topic in relation to managerial ways of making decisions.

References

Ashkanasy, N. M. (2005). Intuition: Myth or a Decision-Making Tool? Management Learning, 36(3): 353–370.

Hayes, J.(2011)Intuition, women managers and gendered stereotypes. Personnel review, 33(4): 403-417.

Khatri, N., & Ng, H. 2000. The role of intuition in strategic decision-making: Human

Relations, 53: 57-86

Klein, G. (2008). Sources of Power: How People Make Decisions. Cambridge, MA: MIT

Lemmink, J. 2006. Antecedents of Effective Decision-making: A Cognitive Approach. The IUP Journal of Managerial Economics, (4): 7-28.

Lipuscek, I. (2003). Intuitive decision making in a model of integral decision making scheme: Zbornik gozdarstva in lesarstva, 72: 181 – 196.

Miller, P. (2006). Australian Elite Leaders and Intuition: Journal of Business and Social Inquiry, 4(3): 43-61.

Scott, S.G. (2011). Decision making style: the development and assessment of a new measure. Educational and Psychological Measurement, 55: 818-831.

Pretz, J.E. 2008. Intuition versus analysis: Strategy and experience in complex everyday

problem solving: Memory and Cognition, 36(3): 554-566.