ANTECEDENTS OF EFFECTIVE DECISION-MAKING: A COGNITIVE APPROACH

Allard Van Riel, Hans Ouwersloot and Jos Lemmink

The IUP Journal of Managerial Economics, 2006, vol. IV, issue 4, 7-28

Abstract: The effectiviness of decision-making has been associated with how well managers adapt their cognitive style to task requirements. In this paper, theories regarding decision-making under uncertainty, and the use of judgment and intuition are reviewed and integrated. The Cognitive Continuum Theory (CCT), positing a one-dimensional continuum of cognitive styles anchored by intuition and analysis, is extended: Four fundamental decision styles are identified and evaluated for their relative effectiveness under various task conditions. Propositions are developed with respect to the relationships between decision task characteristics and the likelihood of using two cognitive systems, with respect to potential moderators of decision-making effectiveness. The propositions are integrated into a comprehensive theoretical model. The major contributions of the study are a conceptual clarification of the distinctions between intuition, heuristics and bounded rationality, and the assessment of the scope of various cognitive styles as well as the identification of moderators of their effectiveness. Research implications and some suggestions for managerial practice are also provided.

Date: 2006
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Persistent link: https://EconPapers.repec.org/RePEc:icf:icfjme:v:04:y:2006:i:4:p:7-28

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