The role of intuition in strategic decision making

Abstract

Marta Sinclair, Eugene Sadler-Smith and Gerard P. Hodgkinson Introduction The strategic decisions confronting senior managers and other key stakeholders in modern organizations are complex judgemental problems that demand expertise gained through an amalgam of practical experience and learning for their resolution. At the heart of the strategy formation process is the ability of decision makers to synthesize ‘vast arrays of soft information’ into new perspectives (Mintzberg et al., 1998: 164) achieved as much by insights which are visioned, imagined and intuited as through a rational analytical process of defining, diagnosing, designing and deciding (see Mintzberg and Westley, 2001: 89). Although many organizations place a premium on analytical skills, analysis is a necessary but insufficient basis for effective strategic decision making (Louis and Sutton, 1991; Simon, 1997; Hodgkinson and Sparrow, 2002; van der Heijden et al., 2002). The situations confronting strategic actors are not so much tightly structured ‘puzzles’ to be solved as loosely structured problems that require both detailed information processing and holistic interpretation. Adopting the metaphor of photography, the strategy formation process is akin to the use of a ‘zoom lens’ camera that can be adjusted both in order to view the world narrowly to capture detail and more widely, in order to capture overall patterns and trends. In this chapter we explore the role that intuition plays in strategic decision making, a process that demands a delicate balance between rational analysis and intuitive judgement. There is a considerable volume of work on intuition in the….