Lic adm

...

Making Management Decisions: the Role of Intuition and Emotion
By Herbert A. Simon Camegie- M ellon U niversity

The work of a manager includes making decisions (of participating in their making), communicating them to others, and monitoring bow they are carried out. Managers must know a great deal about the industrial and social environment in which they work and the making processitself to make decisions well. Over the past 40 years, the technique of decision making has been greatly advanced by the development of a wide range of tools -in particu1ar, the tools of operations research and management science, and the technology of expert systems. But these advances have not applied to the entire domain of decision making. They have bad their greatest impact on decision makingthat is wellstructured, deliberative and quantitative; they have had less impact on decision making that is loosely structured, intuitive, and qualitative; and they have bad the least impact on face to face interactions between a manager and his or her coworkers-the give and take of everyday work. In this article, I will discuss these two relatively types of decision making: "intuitive"decision-making and decision making that involves interpersonal. Interaction. What, if anything, do we know about how judgmental and intuitive processes work and how they can be made to work better? And why do managers often fail to do what they know they should do – even what they have decided to do? What can be done to bring action into closer accord with intention? My artic1e will therefore have the formof a diptych, which one half devoted to each of these topics. First, I will discuss judgmenta1 and intuitive decision-making; then I will turn to the subject of the manager 's behavior and the influence of emotions on that behavior. Sometimes the term rationa1 (or logical) is applied to decision making that is consciously analytic, the term nonrational to decision making that is intuitive and theterm irrational to decision

lntuition and Judgment
As an appendix to the Functions of the Executive (Harvard University Press. 1938), Chester L Barnard published an essay, based on a talk he bad given in 1936 at Princeton, entitled "Mind in Everyday Affairs." The central motif of that essay was a contrast between what. Barnard called "logical" and "nonlogical" processes for making decisions. Hespeaks of "the wide divergence of opinion . . . as to what constitutes a proper intellectual basis for opinion or deliberate action." And he continues:

By "logical processes" I mea n conscious thinking which could be expressed in words or by other symbols, that is, reasoning. By "non-Logical processes" I mean those not capable of being expressed in words or as reasoning, which are only madeknown by a judgment, decision or action.
Barnard's thesis was that executive. as contrasted. say, with scientists, do not often enjoy the luxury of making their decisions on the basis of orderly rational analysis, but depend largely on intuitive or judgmental responses to decision-demanding situations. .

making behavior that responds to the emotions or that

deviates from action chosen"rational1y." We will be concerned, then, with the nonrational and the irrational components of managerial decision making and behavior Our task. you might say, is to discover the reason that underlies unreason.

Although Barnard did not provide a set of forma! criteria for distinguishing between logical and judgmenta1 decision making, he did provide a phenomenological characterization of the twostyles that make them easily recognizable. at least in their more extreme forms. In logical decision making, goals and alternatives are made explicit, the consequences of pursuing di1ferent alternatives are calculated, and these consequences are evaluated in terms of how close they are to the goals. In judgmenta1 decision making, the response to the need for a decision is usually rapid, too rapid to...