Intuition in Organizations: Implications for Strategic Management

Long Range Planning

Volumn 42, Issue 3, 2009, Pages 277-297

  Hodgkinson, Gerard P ^a   Sadler Smith, Eugene ^a   Burke, Lisa A ^a   Claxton, Guy ^a   Sparrow, Paul R ^a  

^a NONE

Author keywords

[No Author keywords available]

Indexed keywords

ANALYTICAL APPROACH; COGNITIVE NEUROSCIENCES; FUNCTIONAL MAGNETIC RESONANCE IMAGING; NEUROPSYCHOLOGICAL; ORGANIZATIONAL DECISION MAKING; PROCESS THEORY; REASONING PROCESS; SCHOLARLY RESEARCH; SOCIAL COGNITION; STRATEGIC MANAGEMENT;

BRAIN MODELS; MAGNETIC RESONANCE IMAGING; RESEARCH; STRATEGIC PLANNING;

DECISION MAKING;

ANALYTICAL METHOD; COGNITION; CONCEPTUAL FRAMEWORK; DECISION MAKING; ENTREPRENEUR; STRATEGIC APPROACH; WORKPLACE;

EID: 68249158458     PISSN: 00246301     EISSN: None     Source Type: Journal    
DOI: 10.1016/j.lrp.2009.05.003     Document Type: Article

References (124)

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20. Interestingly, even the current UK science minister, Lord Drayson, seems to conflate the notion of intuition with instinct. See. I saw it coming, says minister of sixth sense Lord Drayson. The Sunday Times (16 Nov 2008)
21. For a more detailed discussion of such accounts see. Sadler-Smith E. Inside Intuition (2008), Routledge, Abingdon
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29. Dane and Pratt have recently proposed a new taxonomy of intuition, which distinguishes creative, problem solving and moral forms of intuition in the workplace. According to Dane and Pratt, creative intuition, like insight, is accompanied by an incubation period. For further details see:. Dane E., and Pratt M.G. Conceptualizing and measuring intuition: a review of recent trends. In: Hodgkinson G.P., and Ford J.K. (Eds). International Review of Industrial and Organizational Psychology Vol. 24 (2009), Wiley, Chichester, UK 1-40
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42. As observed by Satpute and Lieberman (2006), dual-process conceptions and the recent advances in social cognitive neuroscience have evolved largely independently of one another. However, there is sufficient common ground to conclude that there are close parallels between the essential elements of dual-process models and the neural systems identified by Lieberman and his colleagues. For details see. Satpute A.B., and Lieberman M.D. Integrating automatic and controlled processes into neurocognitive models of social cognition. Brain Research 1079 (2006) 86-97
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46. These developments notwithstanding, a number of leading scholars in strategic management still continue to deploy the basic left brain-right brain nomenclature. See, for example,. Teece D.J. Explicating dynamic capabilities: the nature and microfoundations of (sustainable) enterprise performance. Strategic Management Journal 28 (2007) 1319-1350
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59. Sadler-Smith E., and Sparrow P.R. Intuition in organizational decision- making. In: Hodgkinson G.P., and Starbuck W.H. (Eds). The Oxford Handbook of Organizational Decision Making (2008), Oxford University Press, Oxford 305-324
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62. Agor (1986) 5-18.
63. Parikh (1994).
64. Burke and Miller (1999) 91-99.
65. Clarke and Mackaness, (2001) 147-172.
66. See, for example. Gilovich T., and Griffin D. Introduction - heuristics and biases: then and now. In: Gilovich T., Griffin D., and Kahneman D. (Eds). Heuristics and Biases: The Psychology of Intuitive Judgment (2002), Cambridge University Press, Cambridge 1-8
67. Allinson C.W., and Hayes J. The cognitive style index: a measure of intuition-analysis for organizational research. Journal of Management Studies 33 (1996) 119-135
68. Hough J.R., and Ogilvie dt. An empirical test of cognitive style and strategic decision outcomes. Journal of Management Studies 42 2 (2005) 417-448
69. Khatri N., and Ng H.A. The role of intuition in strategic decision-making. Human Relations 53 (2000) 57-86
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71. Sadler-Smith E. Cognitive style and the performance of small and medium sized enterprises. Organization Studies 25 (2004) 155-182
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75. Klein (1998, 2003).
76. A useful illustration of a fast and frugal heuristic is the "recognition heuristic" identified by Gigerenzer and his team. This particular heuristic, deployed in situations where a decision maker must make inferences in respect of two alternatives, capitalises on the decision maker having a "beneficial degree of ignorance" in connection with one of those alternatives, such that they will infer that the alternative about which they are more knowledgeable has greater value. For example, when German students were asked whether Detroit or Milwaukee had the higher population, most of them got it right on the basis that they had heard of Detroit but not Milwaukee. US students, in contrast, fared considerably less well than their German counterparts because they were familiar with both alternatives; hence, they tended to deliberate. More generally, Gigerenzer and his colleagues have investigated the utility of a variety of fast and frugal heuristics in a diverse range of business-related contexts, from consumer choice to decisions pertaining to investment portfolios. For a more extensive discussion of the links between fast and frugal heuristics, intuition and the adaptive tool box notion, see. Gigerenzer G. Gut Feelings: The Intelligence of the Unconscious (2007), Allen Lane, London
77. Leonard D., and Swap W. Deep Smarts: How to Cultivate and Transfer Enduring Business Wisdom (2005), Harvard Business School Press, Boston, MA Some advocates of scenario planning and related forecasting techniques directed at challenging decision makers' underlying assumptions maintain that expertise-based intuition, informed by processes akin to the notions of RPD and deep smarts, is a vital ingredient in the construction of plausible alternative frames for managing in times of risk and uncertainty. Viewed from this perspective, the fast, unconscious pattern recognition associated with RPD and deep smarts has a generative function in that it enables experienced decision makers to aggregate information that appears fragmented to the novice into meaningful patterns which facilitates not only recognition but also forward projection into uncertain futures. See, for example
78. van der Heijden K., Bradfield R., Burt G., Cairns G., and Wright G. The Sixth Sense: Accelerating Organizational Learning With Scenarios (2002), John Wiley, Chichester
79. Saffo P. Six rules for effective forecasting. Harvard Business Review (July-August 2007) 122-131
80. For further critical assessments of progress in respect of NDM and work on fast and frugal heuristics see:. Gigerenzer G. How to make cognitive illusions disappear: beyond heuristics and biases. In: Stroebe W., and Hewstone M. (Eds). The European Review of Social Psychology Vol. 2 (1991), Wiley, Chichester 83-115
81. Gigerenzer G., and Goldstein D.G. Reasoning the fast and frugal way: models of bounded rationality. Psychological Review 103 (1996) 650-669
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84. Hodgkinson and Healey (2008) 387-417.
85. Hodgkinson, Langan-Fox and Sadler-Smith (2008) 1-27.
86. Hodgkinson and Sparrow (2008).
87. See Miller and Ireland (2005) 19-30
88. Not surprisingly, this tension concerning the relative merits and limitations of intuition as a basis of managerial decision making has been similarly played out in the realms of pedagogy. The Operational Research Society, UK, for example, markets its executive development courses on decision making on the basis that successful organizational decision makers are ones who take "bolder decisions with less gut-feel", downplaying the significance of intuition while accentuating the virtues of "advanced analytical methods to help make better decisions" (for further details visit: The Operational Research Society website at:. http://www.theorsociety.com/science_of_better/htdocs/prospect/or_executi ve_guide.pdf/ - accessed 19th November 2008 at 13:29 and 25 seconds)
89. Conversely, we know of at least one leading business school whose internationally-recognised MBA programme is designed: "to look beyond business processes and techniques to emphasise self-awareness, intuition, cross-cultural sensitivity and entrepreneurship skills as well as a socially responsible and ethical approach to business and management":. http://www.bath.ac.uk/management/courses/mba/ - accessed 15th November 2008 at 11:43 and 47 seconds)
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94. See also. Ericsson K.A., Prietula M.J., and Cokely E.T. The making of an expert. Harvard Business Review (July-August 2007) 115-121
95. Ericsson et al. (2007) 115-121.
96. Hogarth R.M. Educating Intuition (2001), The University of Chicago Press, Chicago
97. See Hayes and Allinson (1994) 53-71.
98. Candidate instruments for these purposes include the Rational Experiential Inventory (REI) developed by Epstein and colleagues, the Preference for Intuition and Deliberation (PID) scales developed by Betsch, and the scales devised by Anthony and Daake for the assessment of analytic and intuitive processing. The Cognitive Style Index (CSI), developed by Allinson and Hayes, is also potentially of value in this context, with the proviso that the scoring procedure is adapted in line with dual-process theories of cognition. For further details of these instruments see: W. P. Anthony and D. Daake, Measurement of Analysis and Tacit Knowledge in Decision Making (Unpublished working paper), Florida State University (1994);
99. Bennett R.H., and Anthony W.P. Understanding the role of intuition-tacit knowledge and analysis-explicit knowledge in bank board deliberations. In: Lant T.K., and Shapira Z. (Eds). Organizational Cognition: Computation and interpretation (2001), Lawrence Erlbaum Associates, New York
100. Epstein et al. (1996) 390-405
101. Epstein S., Pacini R., and Norris P. The Rational-Experiential Inventory. Unpublished inventory (1998), University of Massachusetts at Amherst
102. Hodgkinson G.P., and Sadler-Smith E. Complex or unitary? A critique and empirical re-assessment of the Allinson-Hayes Cognitive Style Index. Journal of Occupational and Organizational Psychology 76 (2003) 243-268
103. Betsch C. Praferenz fur intuition und deliberation, Inventar zur Erfassung von affect- und kognitionsbasiertem entscheiden (Preference for intuition and deliberation (PID): an inventory for assessing affect- and cognition-based decision-making). Zeitschrift fur Differentielle und Diagnostische Psychologie 25 (2004) 179-197
104. Betsch C. Chronic preferences for intuition and deliberation in decision making: lessons learned about intuition from an individual differences approach. In: Plessner H., Betsch C., and Betsch T. (Eds). Intuition in Judgment and Decision Making (2008), Lawrence Earlbaum Associates, New York 231-248
105. Given that these instruments rely on self-report procedures, when used in isolation they are ultimately of questionable value as a basis for determining the contribution of information processing styles and strategies to task performance. For this reason, Hodgkinson et al. (2008) have advocated the use of laboratory tasks designed to induce variously analytic and intuitive strategies. When used in conjunction with other methods, such as the aforementioned self-report measures of cognitive strategies and styles, and/or cognitive task analysis procedures and related cognitive mapping techniques, laboratory tasks provide a potentially powerful means for determining the validity of self-based knowledge. In a particularly exciting development, Lieberman and his colleagues have used functional magnetic resonance imaging (fMRI) in conjunction with reasoning tasks. See. Lieberman M.D., Jarcho J.M., and Satpute A.B. Evidence-based and intuition-based self-knowledge: an fMRI study. Journal of Personality and Social Psychology 87 (2004) 421-435
106. Hodgkinson et al. (2008) 1-27.
107. Hodgkinson and Clarke (2007) 243-255.
108. In a further study, Sadler-Smith and Shefy reported beneficial outcomes in terms of heightening managers' understanding of the conditions necessary for intuitions to arise, and an enhanced awareness of the intuitive process itself and its associated outcomes, including a sense of perspective, self-confidence and inter- and intra-personal sensitivity and meta-cognition. See. Sadler-Smith E., and Shefy E. Developing intuitive awareness in management education. Academy of Management Learning and Education 6 (2007) 186-205
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110. Dotlich D.L., Cairo P.C., and Rhinesmith S.H. Head, Heart and Guts: How the World's Best Companies Develop Complete Leaders (2006), Jossey Bass, San Francisco
111. In: Kirton M.J. (Ed). Adaptors and Innovators: Styles of Creativity and Problem Solving (1989), Routledge, London
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113. Klein (2003)
114. See also. Crossan M.M., Lane H.W., and White R.E. An organizational learning framework: from intuition to institution. Academy of Management Review 24 (1999) 522-537
115. Hodgkinson and Sparrow (2002).
116. Works supporting intuition as a precursor to creativity include. Bastick T. Intuition: How We Think and Act (1982), Wiley, New York
117. Finke R.A., Ward T.B., and Smith S.M. Creative Cognition: Theory, Research, and Applications (1992), MIT Press, Cambridge, MA
118. See also Claxton (1998) 217-220.
119. Hodgkinson and Sparrow (2002).
120. Miller and Ireland (2005) 19-30.
121. In taking this line of inquiry forward, researchers, educators and managers should heed the timely warning of Michael Gazzaniga (2006, p. 66): "The hype about neuroscience we're now seeing has happened before, with the original left brain/right brain research, which I helped pioneer. Our work got hugely distorted in the popular press, and it was impossible to find hard data for most of the claims that were being made. The failure to live up to the hype arguably obscured the real advances we did make.... no one gains from a pseudoscientific approach to business, least of all managers. While I understand the appeal of bringing scientific rigour to this area of management, the quest for certainty could well devalue the intuition that managers traditionally rely on. In the end, investors pay managers to exercise good judgment, not to read scanner printouts." The key to avoiding this pitfall is through the adoption of a social cognitive neuroscience approach, which, "requires the insights from each of the social [and organizational], cognitive and neuroscience levels of analysis" (Lieberman, 2000, p. 127). As observed by Hodgkinson and Healey (2008, p. 403), this approach holds considerable promise as a basis for enriching understanding of a variety of non-conscious cognitive and affective processes in organizations, beyond intuition per se. See Hodgkinson and Healey (2008) 387-417
122. Lieberman M.D. Intuition: a social cognitive neuroscience approach. Psychological Bulletin 127 (2000) 109-137
123. Gazzaniga M.S. The brain as boondoggle. Harvard Business Review (March-April 2006) 66
124. In 1955, Cronbach and Meehl argued that a nomological net surrounding a construct must exist if the construct is to be validated. With a fairly new construct (such as intuition) there may only be a few specifiable connections to other constructs, but as intuition research proceeds links to other constructs will become more and better established and eventually consolidated into an identifiable net of associations. See. Cronbach L.J., and Meehl P.E. Construct validity in psychological tests. Psychological Bulletin 52 (1955) 281-302