3.3 Decision Making
3.3.1 Decision-Making Styles
According to Scott and Bruce (1995), decision making styles are clustered into four scopes. Firstly, rational decision-making style which entails extensive inquiry for and sound assessment of options; secondly, Intuitive decision-making style which concentrates on adopting premonitions; thirdly, Dependent decision-making style where guidance is sought from other parties, and fourthly, avoidant decision-making style where the decision maker evades making an option In this study, the focus is on rational decision making and intuitive decision making because, in the study, decision making is not an option making avoidant decision-making style not applicable and dependent decision making has been considered as a personal trait and not as a way of making decisions.
3.3.1.1 Rational Decision Making
Rational decision making has been elucidated in terms of intuitive decision making in that it is the reverse of intuitive decision making where evidence and
information, scrutiny of the collected data, and a methodical approach is applied to find the option to select making rational decision making a more sophisticated way of making choices (Uzonwanne 2016). Rational decision-making focuses on the lasting results of the decision and includes enough evidence to support the decision hence the
73 rational decision making can be explained by being intentional, investigative, and reasonable (Russ, McNeilly and Comer 1996).
In rational decision making, reasonable assessment is undertaken that consists of collecting relevant information, using common sense to arrange and examine the
information such that it can provide basis for making the most correct decision and by considering the characteristics of rational decision making, it is the most probable decision making that is used by senior managers to select a solution through undertaking comprehensive analysis of factual information and using probability measures to gauge probable substitutes from diverse settings (Uzonwanne 2016).
Therefore, rational decision making is used when the decision consequences have great impact such as an increase in costs for projects, and therefore, the decision is made after ensuring dependable information is collected relating to the subject matter and analysed so as to provide a successful decision since a thoroughly investigated issue usually leads to an efficient resolution (Uzonwanne 2016).
Oliveira (2007) describes rationality as the integration of selection and significance implying that rational behavior strives to boost the significance of the results, therefore, the main intention of rational decision making is to choose as opposed to looking at the choice. In management research and practice, rationality in decision making is indirectly or clearly deliberated as the best way to handle issues even in situations that wholly inhibit a rational view (Calabretta, Gemser and Wijnberg 2017).
Although this approach has been acknowledged to be effective, the efficacy of the decision will rely on the ability of the decision maker to gather enough and relevant information to be analysed and for the decision to be made making this process depends on the information available to the decision maker (Uzonwanne 2016). Further, due to
74 its organized structure in analyzing information before making a decision, rational decision-making takes time and much effort hence it is not suitable in scenarios which require urgent decisions, have high complexity, and those settings with lack of clarity in how decisions are made (Calabretta et al 2017).
3.3.1.2 Intuitive Decision Making
There has been no clear definition to the notion of intuition (Julmi 2019) prompting this view to be contradictory but a globally acknowledged description is provided by Dane and Pratt (2007) who defined intuition as selections are done based on the effect that is quickly formulated unwittingly and combines various information related to the issue. In this description of intuition decision making, it has been
differentiated from analytical decision making in terms of speed of executing the solution, the intention and the manner in which the decision is formulated which follows the widely accepted view that intuition and analytical procedures are two separate ways of mental processing of information concluding intuition is not a way of reducing scrutiny regarding a problem (Julmi 2019). Similarly, research by Wang, Scott, Christopher, Nicole and Thaddeus (2017) in which two meta-analyses were conducted where the first was a meta-analysis of the historical studies and the second was a meta‐analysis integrating scales from numerous cognitive styles found that intuition and analysis are not related.
Previously, intuitive decision making had been explained as the selection of an option that is undertaken in a hurry with minimal information at hand and thus it involves the mental processing of information through using instincts to make a decision (Russ et al 1996) which ignored the fact that in intuitive decision making the procedure encompasses of identifying the problem, analyse the problem through
75 amalgamation of facts related to the issue just like in rational information processing, although in intuitive decision making, the phases in processing are much quicker with interrelation of information conducted unknowingly or unintentionally differently from the case of rational decision making where the analysis is undertaken intentionally to provide the best option to choose (Calabretta et al 2017).
Further, Russ et al (1996) proposes that in intuitive decision making, the decision changes when the instinct is not satisfactory and the decisions are prone to mistakes and inconsistency resulting in unclear situations which introduce distrust to the decision maker but Dane and Pratt (2007) noted that decision-makers that adopt
intuition, knowingly identify an issue which needs a decision to be made by the insight associated with respective clues and pattern, unknowingly stimulate the mental schemas allied to the issue, unknowingly categorize the relations between the mental schemas and then knowingly provide a resolution and hence intuitive decision making is not inferior to analytical decision making.
In circumstances where the impact of the decision is weighty, intuitive decision making becomes very risky as the outcome might worsen with increase in risk through intuitive decision making is also used when there is urgent need to a solution for an issue or when the situation is complicated and in such circumstances, it incorporates a collection of evidence (Uzonwanne 2016). Paul, Fischhoff, and Lichtenstein (1977) in their explanation of decision theory claimed that decisions made through using opinions have some element of vagueness or unclear settings. In addition to assisting decision makers to handle unclear settings and quickly make decisions, intuitive decision making also excites the mental processes that are fundamental in the initiation of the drive to develop innovative solutions to issues, prompt new ideas, and associated advantages
76 (Calabretta et al 2017). More, Calabretta et al (2017) noted that even though intuitive decision making is considered to neglect reasonable investigation of the issue before making a decision, the decision usually is followed by an emotion of sureness that the option or options chosen are accurate and important to note is that the sentiment of confidence evolves to be more certain with an increase in the decision maker’s area specific aptness. With intuition being applicable in diverse situations, intuitive decision making is discrete with its strong points and flaws (Julmi 2019).
Studies on intuition in management distinguish the kind of intuition between professional intuition and problem-solving intuition where the mental information processing is systemized and rational by using the experience gained over time and thorough knowledge of the issue features Calabretta et al (2017).
3.3.1.2.1 Herbert Simon’s view on intuition
Herbert Simon in his various literature suggested a unique approach to view intuition decision making and has since been adopted in the creation of the natural decision-making notion and the fast and frugal heuristics theory (Julmi 2019). Simon described intuition as an unintentional way of mental information process that uses the arrangement of similar events to acknowledge acquainted configuration where
experience gained over a period of time by the decision maker results to effectiveness in intuitive decision making. With much experience, the decision maker is able to relate upcoming issues with previous issues that were solved through a particular decision and thus the decision maker easily makes the decision subject to the success rate in the previous resolution of the issue.
On the other hand, Simon, does not agree with the notion that intuition and analysis are two separate ways of cognitive processes as he proposes intuition is
77 analysis that has become a habit and using familiarity to recognize the problem, the decision maker is able to make a quick response to the issue (Simon, 1987). In 1993, Simon declared that in his opinion, it is not correct to explain decision making using analysis and intuition approaches as according to him, intuition is a multifaceted method of cognitive information processing that a professional possesses and adopts through experience in a specific field and thus intuition develops through experience that previously applied analytical process (Prietula and Simon 1989). To add, intuition encompasses of analytical process showing that intuition and analysis are two basic corresponding elements of the same cognitive process (Simon and Gilmartin 1973) where the main differentiating factor between the two is that intuition happens unknowingly whereas and analysis is intended but the sense implemented in both processes are the same (Simon 1987).
Using the concept of bounded rationality, intuitive and analytical processes are both limited by the amount of information possessed by the decision maker and hence both can be rational if the attitude shown conforms to the objectives (Simon, 1993).
3.3.1.2.2 Criticisms to Herbert Simon’s view
One of the criticisms to Simon’s notion is that the view does not agree to the reality of actual issues facing decision making which makes decisions vulnerable to diverse explanations and using the proposal that an issue can be disintegrated into lesser attributes so as to ease decision making eliminates the probability of a complex scenario or it can only be applicable when there is no complexity involved which is not the case (Mumby and Putnam 1992).
Likewise, Dreyfus (1999) criticized Simon’s view by proclaiming that the view does not consider the implicit structure of cognitive process which is not convertible to
78 the explicit structure such as when people have the capability of managing settings with complexity without having to convert them by a specific function is an implicit structure of mental information process that differs from the known techniques of analytical process (Julmi 2019).
In Simon’s view on intuition, the efficacy of either intuition or analytical decision making cannot be gauged and also the view does not acknowledge the possibility of the mental process occurring concurrently as opposed to in a systematic order. Moreover, the view intuition is rational is attributed to the fact that it incorporates analytical process but recognizes the habitual element (Julmi 2019). In the view,
familiarity acknowledgment is linked to past decisions that are methodologically formulated but present studies indicate that familiarity is connected to concurrent mental processing (Julmi 2019).