Role of Intuition in Managerial Decision Making - Brief Literature Review

Antecedents of Effective Decision Making: A Cognitive Approach

Allard C.R. van Riel
Hans Ouwersloot
Jos Lemmink
Faculty of Economics and Business Administration, Maastricht University, The Netherlands
2003
http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.611.4742&rep=rep1&type=pdf

Propositions

P1: There will be a positive relationship between the amount of information available to the
decision-maker and the extent to which decision-makers are likely to make use of rational
analysis to increase useful knowledge.

P2: There will be a positive relationship between the perceived importance of tacit knowledge
to the solution of a decision problem and the extent to which decision-makers are likely to use
their intuition to increase knowledge utility.

P3: There will be a positive relationship between the perceived structuredness of the decision
context and the extent to which a decision-maker is likely to use rational analysis to increase
knowledge utility.

P4: There will be a negative relationship between the perceived structuredness of the decision
problem and the extent to which decision-makers are likely to use their intuition to increase
knowledge utility.

P5: There will be a positive relationship between the perceived complexity of the decision
problem and the extent to which a decision-maker is likely to make use of rational analysis to
increase knowledge utility.

P6: There will be a positive relationship between the perceived complexity of the decision
problem and the extent to which decision-makers are likely to use their intuition to increase
knowledge utility.

P7: There will be a negative relationship between perceived time pressure and the extent to
which the decision-maker is likely to use rational analysis to increase knowledge utility.

P8: There will be a positive relationship between perceived need for justification of individual
decisions, and the extent to which the decision-maker is likely to use rational analysis to
increase knowledge utility.

P9: There will be a negative relationship between perceived need for justification of individual
decisions and the extent to which the decision-maker is likely to use intuition to increase
knowledge utility.

P9: There will be a negative relationship between perceived need for justification of individual
decisions and the extent to which the decision-maker is likely to use intuition to increase
knowledge utility.

P10: The extent to which a decision-maker will be able to increase knowledge utility by making
use of rational analysis will be moderated by various bounds imposed on the rationality of the
decision-maker.

P11a: The extent to which a decision-maker will be able to increase knowledge utility by
making use of intuitive cognition will be moderated by the presence of valid individual
experience or expertise in the mind of the decision-maker.

P11b: There will be a positive relationship between the extent to which the area of expertise, or
the domain within which the decision-maker acquired experience, match the decision-problem,
and the validity of experientially gathered knowledge.

P11c: The extent to which a decision-maker will be able to increase knowledge utility by
making use of intuitive cognition will be moderated by the amount of turbulence in a decision
problem domain.

P11d: There will be an inverse relationship between the extent to which the decision-maker was
emotionally involved while acquiring the experience, and the objective validity of the
experientially gathered knowledge.

A Research Agenda for Future

A range of issues requires further research.
In the first place, the conceptual model that was developed should be operationalized. Reliable measurement instruments must be developed, allowing a quantification of the relations between constructs.

Second, to confirm the proposed independence of the two cognitive systems, and to obtain insight in the relative effects of various antecedents and moderators on decision-making effectiveness, the model should be empirically validated and refined.

Third, research into the information requirements and validity of the hybrid style of active sense making, which seems to play a pervasive role in dynamic and complex business environments, as well as in scientific and medical problem solving, is now of great importance.

Fourth, various task characteristics have been identified and studied in many
different research streams and research is needed to increase and systematize the existing
knowledge. Interaction and/or hierarchical effects should also be investigated.

Fifth, the outcome variables need to be carefully operationalized and measured.

EXPLORING INTUITION AND ITS ROLE IN MANAGERIAL DECISION MAKING.
DANE, ERIK; PRATT, MICHAEL G.

Academy of Management Review. January 2007, Vol. 32 Issue 1, p33-54.

Like other authors, we view the process of intuition as relating to the domain of the “nonconscious” information processing system (e.g., Epstein 1990, 1994, 2002; Kahneman, 2003).

We view learning as an input to intuition effectiveness, but do not see intuition as a learning process per se.

we conceptualize intuition both by its process (which we refer to as intuiting), as well as its outcome (which we term intuitive judgments)

our review of the various literature on intuition has tended to
converge on four characteristics that make up
the core of the construct: intuition is a (1) nonconscious
process (2) involving holistic associations
(3) that are produced rapidly, which (4)
result in affectively charged judgments. We explore
these characteristics in detail below.

Proposition 1: Individuals who can bring complex, domain-relevant schemas to bear on a problem are more likely to make effective intuitive decisions than those who employ heuristics and simpler, domain-independent schemas.

Proposition 2: Explicit learning will positively influence the effectiveness of intuitive decision making through the formation of complex, domain relevant schemas.

Proposition 3a: The relationship between explicit learning and the formation of complex, domain-relevant schemas will be strengthened when individuals engage in focused, repetitive practice over long periods of time.
Proposition 3b: The relationship between
explicit learning and the formation
of complex, domain-relevant
schemas will be strengthened when
individuals perform in the presence of
“kind” learning structures (rapid and
accurate feedback and exacting consequences).

Proposition 4: Implicit learning will
positively influence the effectiveness
of intuitive decision making through
the formation of complex, domainrelevant
schemas.

Proposition 5: The relationship between
implicit learning and the formation
of complex, domain-relevant
schemas will be enhanced when individuals
focus attention on the stimulus
environment.

Proposition 6: As the problem structure
associated with a task becomes more
judgmental, the effectiveness of intuitive
decision making will increase.

Proposition 7: The relationship between
environmental uncertainty and
the effectiveness of intuition is mediated
by judgmental task characteristics.

Proposition 8: The relationship between
complex, domain-relevant schemas
and the effectiveness of intuitive
decision making is moderated by task
characteristics such that as tasks become
more judgmental, the strength of
the relationship will increase.


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Updated  14 November 2016, 15 November 2012