When rational decision-making becomes irrational: a critical assessment and re-conceptualization of intuition effectiveness

• Published in: Business Research 2019-04, Vol.12 (1), p.291-314
• Main Author: Julmi, Christian
• Format: Article
• Language: English
• Subjects: Accounting/Auditing; Analysis; Business and Management; Business Strategy/Leadership; Corporate Finance; Decision making; Decision-making effectiveness; Equivocality; Information processing; Intuition; Intuition effectiveness; Marketing; Organization information processing theory; Original Research; Rationality
• ISSN: 2198-2627; 2198-3402; 1866-8658; 2198-2627
• DOI: 10.1007/s40685-019-0096-4

Intuition can lead to more effective decision-making than analysis under certain conditions. This assumption can be regarded as common sense. However, dominant research streams on intuition effectiveness in decision-making conceptualize intuition inadequately, because intuition is considered either detrimental or as a form of analysis. Current findings in general intuition research show that intuition is a holistic form of information processing that is distinct from analysis and can be superior in some cases. To reconcile this mismatch, this article first critically assesses dominant conceptions on intuition effectiveness and then offers a re-conceptualization that builds on current findings of general intuition research. Basically, the article suggests the structuredness of the decision problem as the main criterion for intuition effectiveness, and proposes organization information processing theory to establish this link conceptually. It is not the uncertainty but the equivocality of decision problems that call for an intuitive approach. The article conclusively derives implications for further research and discusses potential restrictions and constraints.