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Intuitive Decision Making

In the vernacular, intuition is equated with “trusting your gut” and involves knowing something without knowing how you know it. A subject of scholarly discourse for hundreds of years, intuition has become a topic in management primarily in the last few decades. While conceptualizations in philosophy, psychology, and management vary to some degree, Erik Dane and Michael Pratt suggest four characteristics that are fundamental to intuiting. With regard to the process of intuitive decision making, or intuiting, they note that information processing during intuiting is (a) nonconscious, (b) happens quickly, (c) holistic rather than analytic, and (d) affectively charged, from start to finish. With regard to the outcomes of intuiting, we argue that intuiting results in the formation of a judgment. Put plainly, intuition is a relatively fast way to make judgments that involves seeing patterns across data or stimuli. The process of intuition occurs outside conscious awareness; thus, one arrives at a judgment without knowledge of what went into that judgment. Intuiting is also infused with emotions. Researchers suggest that emotions (especially positive ones) can trigger the intuitive process; emotions can be part of the intuitive processing of information; and the intuitive judgment one arrives at also has an affective tint to it (e.g., one might feel positive and confident). This entry distinguishes intuition from other types of decision making, provides an overview of what makes for “effective” intuiting, and discusses some controversies in the field. It concludes by proposing some future research directions as well as practical managerial implications of extant research.

Fundamentals

Intuiting is most often contrasted with rational decision making. The latter is often conceptualized as conscious, deliberate, analytical, and according to some, largely devoid of emotion. Some suggest that intuition and rational decision making may even correspond to different information-processing systems within human beings (e.g., experiential vs. rational, or System 1 vs. System 2). However, the existence of two separate or dual information-processing systems has been questioned in recent years.

Intuition is often confused with “guessing,” “instinct,” and “insight.” Although fast, intuition is different from blind guessing; it involves drawing on deeply ingrained cognitive structures, such as heuristics or schemas, to make affectively charged associations. As a consequence, individuals tend to have more confidence in intuition than in guesses. Intuition is different from instinct in that the former draws on experience, while the latter is based on one’s biological “hardwiring,” such as automatic reflexes. Intuition is also different from insight, which involves both conscious deliberation (and thus is not totally nonconscious) and an incubation period (which makes it slower than intuiting).

Apart from identifying what it is, much research has focused on when intuition is likely to be effective. Historically, rational analytic approaches are often seen as providing superior outcomes compared with intuition, although this decision-making process is much slower. Hence, some talk about a speed versus effectiveness trade-off in decision making. Intuitions, however, can yield better outcomes than rational models depending on (1) the level of the experience of the decision maker and (2) the nature of the task at hand. Put simply, individuals who have a lot of experience (i.e., experts) in a particular area are primed to be more effective with intuition than rational decision making depending on the type of task they face. By expert is meant someone who has learned domain-relevant information either consciously—through deliberate practice and receiving quick and relevant feedback—or unconsciously (i.e., implicit learning) by paying close attention to one’s environment. While there is no “magic number” of practice time needed to become an expert, some estimates place it at 10 years, while others 10,000 hours.

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