EFFECT OF INTUITIVE DECISION ON ORGANIZATIONAL PERFORMANCE OF SELECTED MANUFACTURING FIRMS IN SOUTH-EAST, NIGERIA

ABSTRACT

The study investigated the effect of intuitive decision on organizational performance of selected manufacturing firms in South-East, Nigeria. The specific objectives of the study sought to : determine the effect of decision based on past experience of the decision maker on organizational productivity; ascertain the extent to which spontaneous decisions affect shareholders’ welfare; assess the nature of relationship existing between non-logical decision and corpoarate goal attainment; evaluate the effect of decision based on rule of thumb on corporate market share; establish the nature of relationship existing between managers’ implicit perception of employees and employees’ turnover. The study adopted the survey design. The population of the study was two hundred (200) registered members of manufacturing firms in South-East, Nigeria. A sample size of 553 was determined using Freud and Willam’s statistical formula from the staff population of 7,246 selected from 40 manufacturing firms. Systematic random sampling technique was adopted in selecting the 40 companies from two hundred (200) registered members of manufacturing association in South-East, Nigeria. Stratified random sampling technique was used to select the respondents in each of the selected firms, while Bowley’s proportional allocation was adopted to determine the allocation of questionnaire to each of participated firms. Data were collected through the use of questionnaire and oral interview guide. The questionnaire was structured on a 5-point Likert scale. Pilot study was conducted using test- retest method and tested with Spearman Ranking order Correlation coefficient. The findings revealed that Decisions based on past experience of the decision maker positively affected organizational productivity (r =0.894; t = 7.026; F = 121.012 p < 0.05). Spontaneous decisions significantly affected shareholders’ welfare (r =0.971; t = 8.112; F = 81. 721 p < 0.05).There was negative relationship between non-logical decision and profitability (r =0 .120, p >0 .05). Decision based on rule of thumb did not positively affect market share (r =0.331; t = 4.876; F = 78.213 p >0.05) and there was a positive relationship between managers’ implicit perception of employees and employees’ turnover (r =0.71, p < 0.05). The study concluded that intuitive decision plays an increasingly significant role in contemporary decision strategies. Managers who understand how to balance their use of intuition and analytic thinking may be better prepared to lead in this environment. The study recommended that managers of the manufacturing firms should support the use of intuition in organization’s work environment, by so doing, many employees will rely not solely on objective methods but also on lessons learned from their personal database of experience.

CHAPTER ONE

INTRODUCTION

1.1             Background to the Study

The origin of the study of intuitive decision can be traced back to the heuristics-and-biases approach (Kahneman, Slovic, & Tversky, 1982) that identified deviations of human judgments from normative models. Since heuristics were seen as fast, simple, and effortless mechanisms for arriving at judgments, this approach was a basic step in the direction of locating judgment and choice on the level of intuitive processes (Böhm&Brun, 2008). In later work, authors of the heuristics-and-biases program started using the term intuition for their approach (Gilovinch, Griffin, & Kahneman, 2002). Over the years, the issue of intuitive decisions on organizational performance became increasingly popular (Hogarth, 2001). Another line of research incorporating intuition into models of decision making can be seen in the development of dual-process models (Chaiken & Trope, 1999). These models assume that there are two distinct modes of operation of mental processes. One mode corresponds to the traditional view of rational deliberation, this is contrasted with an intuitive mode which is characterized by fast, automatic and effortless decisions (Kahneman, 2003).

Managerial decision is one major factor that determines the success or failure of any venture.The process used in making decision affects the quality of the decision. The decision-making behaviour theory divides human decision behaviours into the rationaldecision-making and the intuitive decision-making.In rational decision-making, goals and alternatives are made explicit, the consequences of pursuing different alternatives are calculated and these consequences are evaluated in terms of how close they are to the original goals (Barnard 1938 as cited in Pira, Gillin, McCraty, Bradley, Atkinson&Simpson 2012). For decision makers, this arises from the use of the standard analysis tools such as business plans, financial models, budgeting systems, due diligence, etc. In intuitive decision-making, goals and alternatives are made implicit, the decision maker receives input and ideas without knowing exactly how and where he got them from. Whathe/she knows is that the idea is there. How the idea came about is difficult to explain. Intuitive decision making is far more than using common sense because it involves additional sensors to perceive and get aware of the information from outside. Sometimes it is referred to as gut feeling, sixth sense, inner sense, instinct, inner voice, spiritual guide, etc. (Goshke 2005). In sum, intuitive decision is…..

 EFFECT OF INTUITIVE DECISION ON ORGANIZATIONAL PERFORMANCE OF SELECTED MANUFACTURING FIRMS IN SOUTH-EAST, NIGERIA