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What role intuition plays in business decision making and behaviour?

Name

Research Proposal

Lecturers Name

Date of Submission
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Abstract

Intuition is one of the natural methods used to seek informations required for decision making

at different levels of managements. It is a comprehensive analysis on global challenges,

social and economic behaviours of the past and present so as to arrive at quality decision-

making process. But what roles intuition plays in business decision making and behaviour?

This is one of the questions many studies have tried to answer. Some of the answers put

forward include; intuition entrenched the decision-makers to have a broader perspective of

breaching down the barriers and bond all our integral natural abilities for positive adaptation

and improvement. However, only a few of serious scholarly work has been presented in

today’s literature. Of these, literatures on field research about business setting and behaviour

is little or practically non-existent since most of the literature published are essentially

theoretical in nature.

The objective of this study is to examine the roles intuition plays in business decision making

and behaviour. The data will be collected by conducting survey on top management of

successful companies dealing on industries, utility, banking and computer in the United

States that embrace intuition at its fundamental in organizational decision making process.

Among the factors that would be analysed is to test whether intuition influences the changes

on the behaviour of individuals, society, organization and groups. Questionnaires will be used

to collect quantitative data and SPSS will be used for data analysis.
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Title: what role intuition play in business decision making and behaviour?

Introduction

Sadler-Smith & Erella (2004) define intuition as “a form of knowing that manifests itself as

an awareness of thoughts, feelings, or bodily sense connected to a deeper perception,

understanding, and way of making sense of the world that may not be achieved easily or at all

by other means”. Intuition is one of the ordinary logical means of obtaining holistic

information necessary for making informed decisions. Literature proposed three channels of

gathering the information that aids decision making process; first channel is the natural

means of obtaining the information embedded in the unconcious. The second channel is

where the information is obtained from a knowledge base source, it involve the process of

learning information and data needed to improve decision making. The third channel is the

experience, decision making is based on the accumulated experiences that run across

generations. It involve the changes that have taken place over a long period of time regarding

social environment, civilization and generations.

Increased application of intuition in business decision making process is as a result of

changes taking place socially and economically as well as the growth and development of

human consciousness. Continuous changes and competition in the business world

complicates decision making process, thus hierarchical and linear approaches are not

sufficient enough to deliver quality decision making. Objective and subjective knowledge

does not provide all the necessary information needed to make informed decision in business

world, since past experiences are the fundamental aspects relies upon in decision making.

This means present and future anticipations are not considered in the decision making

process. As such, intuition optimize the available resources to ensure that decision making
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process involves a systematic way of thinking as well as gathering as much information as

possible addressing on the issues touching on the business.

Dissertation statement

Human nature is hardly measurable in the real word, since it continues to metamorphosis

with changes occurring daily. Thus making human life more complex and less structured,

hence intuition recognition is rather considered effective tool for making decision. It is

applicable in various areas, which include; business, medical and nursing, management,

development, education, personal selection and marketing among others. What role intuition

plays in business decision making and behaviour, is the main question that will answer by the

end of the research. To arrive at concrete conclusion to this question, benefits and limitation

of using intuition in decision making process will be analysed.

Objective of the study

The main objective of this study is to establish the roles intuition play in business decision

making and behaviour.

Hypothesis

HO: Intuition does not play any significant role in business decision making and behaviour

HA: Intuition play a significant role in business decision making and behaviour.
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Literature review

Certo & Certo (2005) define “decision making as the process of choosing the best alternative

for reaching objective” whereas Judge & Robbin (2006) define “decision as the choices made

from two or more alternative”. Decision making process is instigated by the reactions taking

place at that moment, the reaction can be a problem affecting the organization or the

opportunities prevailing. As such decision maker have the responsibility of deciding on the

best alternative course of action that would assist the organizations to achieve its objectives

(Tat et al., 2012).

Sources of intuition

Intuition depends on both expertise and feelings; expertise is clearly seen as intuitive decision

heuristics whereas feelings are expressed as the affect linked with a specific stimulus (Sadler-

Smith & Shefy, 2004). Together with subconscious, intuition therefore form a three

dimensional network needed to collect the necessary information and data essential for

making sensible decisions. However, intuition operates in two means; knowing and the

process of connecting the body and mind, the two operate concurrently and are hardly

distinguishable (Sadler-Smith & Shefy, 2004). Intuition obtained information from one’s

inner world, cosmic consciousness, a team’s collcetive conscious and organization.

Intuition and the business world

Increased competition in the business world has changed the approach of decision making to

include more competenceis associated with spiritual, emotional and energy forms of capital.

These has instigated the integration of intellectual, physical and social capital as means of

incorparating the broader interest and requirements needed to developed responsible human

resources. As such new door of thinking was open in the business world, this forced the
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managers to explore new ways of decision making. For example, successful businessmen like

Sam Walton, Bill Gates and Steven Jobs conquer the world of business by choosing not to

follow the habitual ways of solving the problem. They master the tricks of looking the

problem from a different perspective and acted on the problem guidede by the cues of

intuition (Senge et al, 2008).

Intuition-based model for making business decisions

Many studies have shown that everyone uses intuition in one way or another without

necessary knowing. As such, many theories and models have been developed to explained

how individual uses intuition and gain benefits from it. Korthagen core reflection (2009) and

Scharmer’s theory U (2010) are the two theories explaining how intuition is applied in

business decision making.

Korthagen’s core reflection (2009): he stated that individuals need to develop essential

qualities and positive insight of their identity and mission. This would help to solve the

problem primarily experienced as a result of conflicting personality as expressed in form of

onion model. Korthagen & Vasalos (2009) suggested five stages for identifying and resolving

conflicts; (1) Action; (2) Looking back at the action; (3) Awareness of essential aspects; (4)

creating alternative methods of action; and (5) Trials. There are two important aspects with

this theory; the transition from thinking to awareness, where the individuals would be able to

direct their attention to recognize the hidden aspects and the replacement of the traditional

hypothetical thinking with a new powerful consciousness of non-rational pedigrees of

knowledge.

Scharmer’s Theory U (2009): the theory suggested that the phase of recognizing presence is

an indication of being aware of the current moments. By listening carefully to our inner

feelings and trying to interprate these realities above our normal perceptions and understand
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the broader meaning, we become more aware of the present moment. Therefore, individuals

would be able to avoid the traditional habits and embrace the advancement of life. Senge et

al, (2008) associated the left arm of the U-curve the phase of avoiding traditional habits,

whereas the right arm represents embracing new habits. Scharmer (2009) further suggested

that, individuals should contiously strive to anticipate what to happen in future. The intuition-

based model for making business decisions become applicable when Korthagen’s onion

model (2004) and Scharmer’s Theory U (2010) are combined together. It is assumed to meet

at the bottom of the U- Curve as shown in the figure below

Figure 1: Intuition-based model for making business decision; source (scharmer, 2010;

Korthagen, 2004)

Many literatures indicates that intuition is not an ordinary belief, rather it is a believe that

cannot be changed by argumentation or repeated failure since it is deeply rooted within

individuals. Successful business people operate by this believe even if future seems

unpromising. Intuitive-based decision making is effective if alternative approaches are

incorporated.
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Research methodology

Data collection would be targeting the top four senior management including CEO in each

organization. The assumption is that the top four managers influence decision making process

in an organization[ CITATION Hal93 \l 1033 ]. Three control variables will be considered during

data collection in order to extract possible confounds: size of the business, geographical

region where the business is situated and the industry. Small business has a tendency of using

more intuitive/informal decision making and less of proper analysis than large organizations.

Two factors will be observed while considering the size; sale volume and statistical control.

To minimize the variations resulting from geographical regions, only business from one

region will be survey and industry-wise analysis will be used to control various unspecified

industry effects.

Sampling and data collection

Three environmental context will be analysed; utilities, computer and banking. The reason

being that computer industry experience stiff competition and turbulences as compared to gas

and electric industries where they operate in more stable and less competitive. Banking

industry operates in sensible level of instability. Questionnaires would be employed to collect

quantitative data. Each of the three construct have specific measures to be collected in the

questionnaire, hence three measures will be constructed specifically for this study as

suggested by [ CITATION Fin92 \l 1033 ]. The measures are subjective indicators expect for

banking industry.

Data analysis

Kendall’s Coefficient of Concordance will used to examine for multi-rater agreement, while

Cronbach alpha will be computed to test reliability estimates for intuitive synthesis against
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organizational performance. Harman’s single-factor test would be used to examine the

common-method bias as stated by [ CITATION Par94 \l 1033 ].

References

Certo S.C. & Certo S.T., 2005. Modern management. 10th ed. New Jersey: Pearson Hall.

Finkelstein S., 1992. Power in top management teams: Dimension, measurements and

validation. Academy of Management Journal, 32(3), pp. 505-538.

Haleblian J. & Finkelstein S., 1993. Top management team size, CEO dominance and firm

performance. Academy of Management Review, 36(4), pp. 844-863.

Judge T.A. & Robbin S.P., 2006. Organizational Behavior. 12th ed. Canada: Prentice Hall.

Korthagen A.F. & Vasalos A., 2009. FROM REFLECTION TO PRESENCE AND

MINDFULNESS: 30 years of development concerning the concept of reflection in teacher

education. New York, Springer.

Parkhe A., 1994. Strategic alliance structuring. Academy of Management Journal, 36(4), pp.

794-829.

Sadler-Smith E. & Shefy E., 2004. The intuitive executive: understanding and applying "gut

feel" in decision-making. Academy of Management Executive, 18(4), pp. 76-91.

Scharmer C.O., 2009. Theory U: Leading from the future as it emerges. San Francisco, USA:

Berrett-Koehler Publishers.

Senge, P. et al, 2008. Presence: Exploring Profound Changes in People, Organization, and

society. Landon, UK: Nicholas Brealey Publishing.

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Tat H.H., Hooi S.P.,Rasli M.A., Chin A.T. & Yusoff M.R., 2012. The role of intuition in

decision making: An empirical study on academic staff in Malaysian Public University,

Johor, Malaysia: Universiti Teknologi Malaysia.