஽ Academy of Management Review 2007, Vol. 32, No. 1, 33–54.

EXPLORING INTUITION AND ITS ROLE IN MANAGERIAL DECISION MAKING

ERIK DANE MICHAEL G. PRATT University of Illinois at Urbana-Champaign

We review and reconceptualize “intuition,” defining intuitions as affectively charged judgments that arise through rapid, nonconscious, and holistic associations. In doing so, we delineate intuition from other decision-making approaches (e.g., insight, ra- tional). We also develop a model and propositions that incorporate the role of domain knowledge, implicit and explicit learning, and task characteristics on intuition effec- tiveness. We close by suggesting directions for future research on intuition and its applications to managerial decision making.

The human brain can be a magnificent synthe- shows how managers use intuitions for strategic sizer of disparate pieces of nebulous information, decisions, such as whether to invest capital in a and often formal techniques and procedures thwart and inhibit this mysterious mechanism project or whether to market controversial pre- from operating efficiently (Raiffa, 1968: 272). scription drugs. Hayashi (2001) frames several high-profile executive-level decisions, including A classic trade-off noted by decision theorists the development of the Dodge Viper and the is that decision accuracy is often inversely re- prime-time launch of Who Wants to Be a Million- lated to decision speed. Consequently, there has aire, as intuitive or “gut” decisions. Research been pressure to understand how to make high- further suggests that the need for intuition may quality decisions relatively quickly (see Eisen- be especially acute in organizations embedded hardt, 1989; Hitt, Keats, & DeMarie, 1998; Perlow, in turbulent environments (Khatri & Ng, 2000). Okhuysen, & Repenning, 2002). Toward this end, The effective use of intuition has even been in numerous articles in the popular business seen as critical in differentiating successful top press and in a steadily growing body of more executives and board members from lower-level scholarly literature, authors have turned to the managers and dysfunctional boards (Agor, 1986; notion of “intuition” as a means of managing Barnard, 1938; Harper, 1989). Ralph Larsen, this trade-off (e.g., Burke & Miller, 1999; Hayashi, former chair and CEO of Johnson & Johnson, 2001; Khatri & Ng, 2000). As the epigraph sug- suggested: gests, intuition draws on our inborn ability to synthesize information quickly and effective- Very often, people will do a brilliant job through ly—an ability that may be hindered by more the middle management levels, where it’s very formalized procedures. heavily quantitative in terms of the decision- Within organizations, intuition has been pos- making. But then they reach senior management, where the problems get more complex and am- ited to help guide a wide range of critical deci- biguous, and we discover that their judgment or sions. Research suggests that intuition may be intuition is not what it should be. And when that integral to successfully completing tasks that happens, it’s a problem; it’s a big problem (Ha- involve high complexity and short time horizons, yashi, 2001: 61). such as corporate planning, stock analysis, and performance appraisal (Hayashi, 2001; Isenberg, We believe that there have been two major 1984; Shirley & Langan-Fox, 1996). Agor (1986) barriers to a productive discourse on the topic of intuition within the management literature. The first concerns the considerable confusion sur- We thank Lorna Doucet, Patrick Laughlin, Greg Oldham, rounding what intuition is. Although intuition Kevin Rockmann, and the participants of the University of has a long history in the organizational sciences Illinois Organizational Behavior Proseminar Series for their helpful comments on earlier drafts of this manuscript. We (Barnard, 1938; Behling & Eckel, 1991; Isaack, also extend our thanks to Janet Fitch for assisting us with 1978; Peters, Hammond, & Summers, 1974; Pri- our copy editing. etula & Simon, 1989; Simon, 1987), in the litera-

33 34 Academy of Management Review January ture in this area scholars have failed to agree on topadhyay, & Boyle, 2002; Woolhouse & Bayne, what intuition is and what it does. This concep- 2000). tual confusion comes, in part, from the various Drawing on recent advances in psychology perspectives used to understand intuition. For and the decision sciences, we suggest that, un- example, among Western philosophers, intu- der certain conditions, intuition may indeed fa- ition was often perceived as the most pure and cilitate rapid and effective decision making in immediate way of knowing (Osbeck, 2001; Wild, organizations. Before such gains can be real- 1938). It represented access to divine or inborn ized, however, we must first understand the knowledge. In the East, many Buddhists viewed boundary conditions that surround the concept. intuition as a means of obtaining penetrating We begin with an exploration of what intuition knowledge and as a “gateway to a wider and is and how it is different from other related con- richer world” (Guenther, 1958: 26). cepts, such as insight and instinct. We then con- While some maintain that intuition is a mys- sider the factors that determine when the use of tical avenue to knowledge (e.g., Ferguson, 1999; intuition in decision making is most effective. Franquemont, 1999; Vaughan, 1979), researchers Toward this end, we synthesize findings across in the areas of management and psychology a range of disciplines and formulate a set of have explained intuition through a wide range propositions surrounding the effectiveness of in- of phenomena, including heuristics (Bazerman, tuitive decision making. 1986; Denes-Raj & Epstein, 1994; Tversky & Kah- neman, 1983), expertise (Blattberg & Hoch, 1990; Prietula & Simon, 1989), and nonconscious infor- WHAT INTUITION IS: BRINGING TOGETHER mation processing (Epstein, 1990, 1994, 2002; INTUITIVE PROCESSES AND OUTCOMES Kahneman, 2003; Lieberman, 2000). Thus, one Having both academic and nonacademic sig- purpose of this paper is to seek out sources of nificance, “intuition,” perhaps not surprisingly, conceptual agreement or overlap across differ- has a wide range of terms associated with it, ent disciplines and, thus, provide greater clarity including gut feelings (Hayashi, 2001), hunches about the concept of intuition. (Rowan, 1989), and mystical insights (Vaughan, A second barrier hindering this line of inquiry 1979; Wild, 1938). Table 1 provides a sample of is that scholars often fail to distinguish between definitions of intuition culled from work in psy- when intuitions are used and when they are chology, philosophy, and management. used effectively. To illustrate, evidence sug- One confusing aspect of past research is the gests that individuals are likely to rely on intu- tendency to call both intuitive processes and itive thought processes when they face extreme their associated products, or outcomes, “intu- time pressures (De Dreu, 2003; Edland & Sven- ition.” For example, Jung (1933), Westcott and son, 1993; Kaplan, Wanshula, & Zanna, 1993; Ranzoni (1963), and Raidl and Lubart (2000-2001) Kruglanski & Freund, 1983; Maule, Hockey, & refer to intuition largely as a process—a way of Bdzola, 2000; Suri & Monroe, 2003). Therefore, perceiving or sorting data. Rorty (1967), in con- intuition may play a significant role in the de- trast, sees intuition primarily as an outcome—as cisions of firefighters (Klein, 1998), military com- what one apprehends or recognizes. Others manders (Kaempf, Klein, Thordsen, & Wolf, combine both process and outcome without dif- 1996), emergency room surgeons (Abernathy & ferentiating between them. We believe that in- Hamm, 1995), and corporate executives operat- tuition is marked by a unique process and out- ing under severe time constraints (Agor, 1986; come; however, we also believe it is important to Burke & Miller, 1999; Hayashi, 2001). The mere disentangle the two. Thus, we begin by address- use of intuition, however, is not a panacea for ing intuition as a process and positioning this the speed-accuracy trade-off, since its use may process vis-a` -vis the larger “dual processing” simply facilitate speed at the expense of accu- perspective that is currently favored among de- racy. Therefore, we need to better understand cision-making theorists, especially in psychol- those conditions that foster the effective use of ogy. We then build from this perspective to iden- intuition to complement existing work on when tify process and outcome characteristics that intuition is simply most likely to be used (e.g., historically have been central to many defini- Ruder & Bless, 2003; Sinclair, Ashkanasy, Chat- tions of intuition. 2007 Dane and Pratt 35

TABLE 1 Definitions of Intuition

Source Definition of Intuition

Jung (1933: 567–568) That psychological function transmitting perceptions in an unconscious way Wild (1938: 226) An immediate awareness by the subject, of some particular entity, without such aid from the senses or from reason as would account for that awareness Bruner (1962: 102) The act of grasping the meaning, significance, or structure of a problem without explicit reliance on the analytic apparatus of one’s craft Westcott & Ranzoni (1963: 595) The process of reaching a conclusion on the basis of little information, normally reached on the basis of significantly more information Rorty (1967: 204) Immediate apprehension Bowers, Regehr, Balthazard, & A preliminary perception of coherence (pattern, meaning, structure) that is at first not Parker (1990: 74) consciously represented but that nevertheless guides thought and inquiry toward a hunch or hypothesis about the nature of the coherence in question Shirley & Langan-Fox (1996: 564) A feeling of knowing with certitude on the basis of inadequate information and without conscious awareness of rational thinking Simon (1996: 89) Acts of recognition Shapiro & Spence (1997: 64) A nonconscious, holistic processing mode in which judgments are made with no awareness of the rules of knowledge used for inference and which can feel right, despite one’s inability to articulate the reason Burke & Miller (1999: 92) A cognitive conclusion based on a decision maker’s previous experiences and emotional inputs Policastro (1999: 89) A tacit form of knowledge that orients decision making in a promising direction Lieberman (2000: 111) The subjective experience of a mostly nonconscious process—fast, alogical, and inaccessible to consciousness—that, depending on exposure to the domain or problem space, is capable of accurately extracting probabilistic contingencies Raidl & Lubart (2000-2001: 219) A perceptual process, constructed through a mainly subconscious act of linking disparate elements of information Hogarth (2001: 14) Thoughts that are reached with little apparent effort, and typically without conscious awareness; they involve little or no conscious deliberation Myers (2002: 128–129) The capacity for direct, immediate knowledge prior to rational analysis Kahneman (2003: 697) Thoughts and preferences that come to mind quickly and without much reflection Epstein (personal The working of the experiential system communication, 2004)

Historical Context: Two Information Processing because the processes are unconscious, or be- Systems cause they are so complex and so rapid, often approaching the instantaneous, that they could Intuition has long been viewed as involving a not be analyzed by the person within whose brain form of information processing that differs from they take place (1938: 302). rational, or analytical, processes. Distinctions between “rational” and “nonrational” human More recently, psychologists have adopted a thought can be traced as far back as Aristotle dual processing approach, arguing for two dis- (Sloman, 1996). In management research, Bar- tinct types of information processing systems in nard similarly distinguished between “logical” human beings (e.g., Epstein, 2002; Gollwitzer & and “nonlogical” modes of thinking, attributing Bayer, 1999; Sloman, 1996). One information pro- intuition to the latter: cessing system, which from an evolutionary per- spective is believed by some to be the older of By “logical processes” I mean conscious thinking the two systems (Epstein, 1994; Reber, 1992), in- which could be expressed in words, or other sym- bols, that is, reasoning. By “non-logical pro- volves the automatic and relatively effortless cesses” I mean those not capable of being ex- processing and learning of information (Stano- pressed in words or as reasoning....This may be vich & West, 2000). This system, which permits 36 Academy of Management Review January individuals to learn from experience and reach mation is accessed and used. We view learning perceptions of knowing without conscious atten- as an input to intuition effectiveness, but do not tion (Hogarth, 2001), has been referred to as ex- see intuition as a learning process per se. Sec- periential (Epstein, 1990, 1994, 2002; Epstein, Pa- ond, our focus on both processes and outcomes cini, Denes-Raj, & Heier, 1996; Pacini & Epstein, of intuition differentiates our work from tradi- 1999), automatic (Bargh, 1996; Bargh & Char- tional research on nonconscious systems, such trand, 1999), tacit (Hogarth, 2001), natural (Tver- as that on the experiental system, which has sky & Kahneman, 1983), associative (Sloman, focused nearly exclusively on processes only. 1996), and system 1 (Kahneman, 2003; Stanovich Specifically, we conceptualize intuition both by & West, 2000). its process (which we refer to as intuiting), as Bargh and Chartrand (1999) argue that a large well as its outcome (which we term intuitive portion of everyday life is determined by this judgments). first information processing system. Insofar as In constructing a definition of the construct, such processes are rapid, effortless, and often we build on and bridge work in psychology, quite effective, nonconscious processes serve as philosophy, and management; our focus is on “mental butlers” that conveniently manage our those aspects of intuition that are common and tendencies and preferences (Bargh & Chartrand, central to all three. Specifically, our review of 1999). As we explain below, intuition is often the various literature on intuition has tended to associated with this system (e.g., Epstein, 2002, converge on four characteristics that make up Kahneman, 2003; Sloman, 1996). the core of the construct: intuition is a (1) non- The second system enables individuals to conscious process (2) involving holistic associa- learn information deliberately, to develop ideas, tions (3) that are produced rapidly, which (4) and to engage in analyses in an attentive man- result in affectively charged judgments. We ex- ner. This system has been referred to by various plore these characteristics in detail below. names, including rational (Epstein, 2002; Epstein et al., 1996; Pacini & Epstein, 1999), intentional Intuiting Is Nonconscious (Bargh & Chartrand, 1999), deliberate (Hogarth, 2001), extensional (Tversky & Kahneman, 1983), One of the defining characteristics of intuitive rule based (Sloman, 1996), and system 2 (Kahne- processing is that it is nonconscious1—it occurs man, 2003; Stanovich & West, 2000). Rational de- outside of conscious thought. Jung, for example, cision-making models, which have garnered the defined intuition as “that psychological function lion’s share of research on managerial decision which transmits perceptions in an unconscious making, utilize this system of information pro- way” (1933: 567–568). Simple perceptions, how- cessing. ever, are not the only type of information that is Drawing on the conceptual foundation pro- transmitted through this means. The noncon- vided by dual processing theories, we now turn scious processing of information can occur at to the concept of intuition. Like other authors, we various levels of sophistication (Epstein, 2002; view the process of intuition as relating to the Pacini & Epstein, 1999), and intuiting can involve domain of the “nonconscious” information pro- the processing of more complex information cessing system (e.g., Epstein 1990, 1994, 2002; than perceptions. On this point, Epstein and Pa- Kahneman, 2003). However, in making this case, cini make the following observation about the we also stress that not all nonconscious opera- nonconscious, experiential system: tions are fundamental components of intuition At its lower reaches, it [the experiential system] is itself. We have two primary reasons for differ- a relatively crude, albeit efficient, system for au- entiating intuition from any given nonconscious tomatically, rapidly, and effortlessly processing system depicted in dual processing theory. First, the nonconscious systems in dual processing theories typically involve a larger group of phe- 1 This characteristic of intuition has been called “uncon- nomena than are central to intuition. For exam- scious,” “subconscious,” “preconscious,” and “noncon- ple, research on the nonconscious system has scious” (Epstein, 1994; Hogarth, 2001; Jung, 1933; Reber, 1992; Simon, 1987). However, each of these terms has slightly dif- often focused on learning processes. However, ferent meanings (see Kihlstrom, 1987, for a review). For the as we will argue, intuitive processes pertain sake of parsimony, we refer to what each of these terms has less to learning and more to how learned infor- in common: they are nonconscious. 2007 Dane and Pratt 37

information while placing minimal demands on tively simple cognitive structures, such as heu- cognitive resources. At higher reaches . . . the ex- ristics, in the formation of intuitive judgments periential system can be a source of intuitive wisdom and creativity (1999: 463). (Bazerman, 1986; Bodenhausen, 1990; Kahneman, Slovic, & Tversky, 1982; Kahneman & Tversky, In further clarifying the connection between 2000; Tversky & Kahneman, 1983). As we will nonconscious processing and intuition, we re- argue below, this line of research has often con- emphasize the distinction between intuitive pro- cluded that intuitive decision making is inferior cesses and outcomes. While the outcomes of to rational decision-making models. intuiting, intuitive judgments, are clearly acces- A second line of inquiry suggests that intuit- sible to conscious thinking, how one arrives at ing may involve the use of more complex, but them is not. Hence, there is “no awareness of the still not consciously accessible, cognitive struc- rules of knowledge used for inference” during tures. For instance, drawing on the work of Agor intuiting (Shapiro & Spence, 1997: 64). Similarly, (1989), Shirley and Langan-Fox (1996: 573) have Osbeck writes that intuition, from a philosophi- argued that intuiting results from a process of cal perspective, involves direct apprehension recognition and retrieval in which large num- that is “not mediated by other reasoning or rep- bers—perhaps several thousands—of chunks or resentation” (2001: 123). As we discuss below, patterns stored in long-term memory are ac- this quality differentiates intuition from insight. cessed without conscious effort. This stream of research, focusing largely on the intuitions of experts (e.g., surgeons making life-and-death Intuiting Involves Making Holistic Associations decisions, chess masters engaging in competi- A second characteristic of intuiting is that it tion), contends that experts possess highly so- involves a process in which environmental stim- phisticated, nonconscious cognitive structures uli are matched with some deeply held (noncon- that permit rapid and accurate responses to scious) category, pattern, or feature. Historically, highly demanding situations (Dreyfus & Drey- this matching process has gone by numerous fus, 1986; Klein, 1998, 2003; Prietula & Simon, names, including awareness (Wild, 1938), appre- 1989; Simon, 1987, 1992, 1996; Simon & Chase, hension (Rorty, 1967), recognition (Simon, 1996), 1973). Such research has tended either to favor and seeing (Osbeck, 1999). More recently, Raidl the use of intuition over more rational models or and Lubart described intuition as involving a to position intuition as a useful complement to process of “linking disparate elements of infor- analytical thinking. Thus, intuition is seen as a mation” (2000-2001: 219). This linking together of subset of the entire population of decision- elements is why many refer to intuiting as being making approaches successfully used by ex- associative (Epstein, 1994; Epstein et al., 1996; perts. However, common to both the heuristic Kahneman, 2003). Further, because intuiting in- and expert decision-making perspectives is the volves recognizing features or patterns (e.g., view that individuals nonconsiously make ho- Klein, 1998), rather than making connections listic associative connections between the stim- through logical considerations, it has also been uli they encounter and their underlying cogni- conceptualized as holistic (Epstein, 1990; Sha- tive structures in the process of intuiting. piro & Spence, 1997). As such, Bowers, Regehr, Making holistic associations is not only a Balthazard, and Parker speak of intuition as in- characteristic of intuiting but also speaks to one volving a “perception of coherence (pattern, of intuition’s advantages over other decision- meaning, structure)” (1990: 74). In sum, since the making approaches: our nonconscious ability to associations in intuition refer to the recognition make such categorical connections is greater of patterns or structures, we refer to this aspect than our ability to mimic it consciously. As of intuiting as making holistic associations. Raiffa (1968) argues in the quote that opens our Psychologists and other decision science paper, such ability may be undermined by our scholars suggest that, in making holistic asso- attempts to use more conscious, or rational, ciations, individuals nonconsciously map stim- means of making judgments and decisions. It uli onto cognitive structures or frameworks. Re- has even been stated that, in some instances, search has typically focused on one of two types rational analysis may prevent people from “see- of cognitive structures. The first and most com- ing the obvious” (Pirsig, 1974: 196). As noted mon line of research examines the role of rela- above, conscious thinking appears to rely on 38 Academy of Management Review January connections made through a slow and effortful component of “non-logical mental processes” analysis (Epstein, 1990, 1994; Kihlstrom, 1987). that are capable of handling a “mass of experi- These properties contrast sharply with the ho- ence or a complex of abstractions in a flash” listic and associative qualities of the experien- (1938: 305). March and Simon echo Barnard’s tial system. All told, it comes as little surprise view, asserting that one of the hallmarks of in- that intuiting is perhaps better suited than ra- tuiting, in addition to its nonconscious nature, is tional methods to integrate wide-ranging stim- its speed: uli into usable categories of information. The distinctive earmarks of intuition are rapid response (a matter of seconds) and inability of the respondent to report a sequence of steps leading Intuiting Is Fast to the result—even denial of awareness of such A third characteristic of the intuition process, steps.... what impresses observers about intu- ition is that responses, especially those of ex- and the one that has seemed to spark the most perts, are frequently correct even though they interest among both managers and academics, seem to have required almost no processing time is its speed (Bastick, 1982; Burke & Miller, 1999; or effort (1993: 11). Kahneman, 2003; Khatri & Ng, 2000; Myers, 2002). Although there has been some debate about Intuiting Results in Affectively Charged whether intuiting is always fast (see Hogarth, Judgments 2001), the vast majority of researchers view intu- iting as quite fast—especially when compared Although “intuiting” refers to a unique way of with the use of rational decision-making pro- processing information, individuals often use cesses. The centrality of “speed” is seen in the intuition as a noun—as the product of such pro- concepts of intuition used by philosophers (see cessing. To differentiate the process and product Wild, 1938, for a review). Rorty for example, facets of intuition, we use the term intuitive views this process as involving “immediate ap- judgment to signify intuition in its outcome prehension” (1967: 74). Osbeck, in a newer re- state. view of the philosophical roots of intuition, We make reference to “judgments” rather than views speed as a defining aspect of intuiting some other outcome state, given the strong as- and notes that Locke and Hume viewed intuition sociation between intuition and problem solv- as “the immediate perception of connection be- ing. To illustrate, pioneering works in manage- tween ideas” (2001: 121). rial problem solving (Barnard, 1938; Simon, 1987, This emphasis on speed is echoed in other 1996) and classic works on decision making more recent perspectives on intuition. Research- (Kahneman et al., 1982; Tversky & Kahneman ers who view intuiting—and nonconscious infor- 1974, 1983) focus explicitly on how individuals mation processing more generally—as an evo- use intuiting to solve problems. This problem- lutionary precursor to more conscious and focused treatment of intuition is echoed in the analytical thinking point to the advantages of work of Policastro (1999), who holds that intu- having an information processing system that ition is a type of knowledge used to orient deci- responds quickly to environmental stimuli (Ep- sion making. stein, 1994; Haidt, 2001; Reber, 1992). Kihlstrom We further clarify intuitive judgments as “af- (1987: 1447) similarly argues that processing in- fectively charged,” given that such judgments formation nonconsciously does not require at- often involve emotions. Chen and Chaiken (1999: tention and, thus, does not produce the same 87), for example, suggest that the presence of information “bottlenecks” that conscious pro- “cognitive feelings” may indicate that heuristic cessing does. processes are operating. And, more generally, From a managerial perspective, the speed of synonyms for intuition, such as “gut feelings” intuiting is not only taken for granted but is and “gut instincts” (Hayashi, 2001; Shapiro & often seen as a primary motivator for develop- Spence, 1997), as well as “feeling in our marrow” ing and employing intuition at work (Agor, 1986; (Barnard, 1938: 306), reflect an affective compo- Burke & Miller, 1999; Khatri & Ng, 2000; Klein, nent to intuitive judgments. Thus, one way that 2003). Moreover, the speed characteristic of intu- we identify a judgment as intuitive is that it is ition has long been recognized by management accompanied by affect. For example, Agor (1986) theorists. Barnard proclaimed intuition to be a notes that as executives make intuitive judg- 2007 Dane and Pratt 39 ments, they often experience excitement and ganizational, cognitive, and neurological harmony. And Shirley and Langan-Fox define psychology suggests that affect and emotions intuitions as “feelings of knowing” (1996: 564). are an integral component of intuitive judg- The coupling of affect and intuitive judgments ments. has a long intellectual history. At a very basic In sum, research suggests that affect is asso- level, these judgments may be thought of as ciated both with the intuiting process and with affective because they are detached from ratio- intuition as an outcome. We therefore use the nality. Thus, rationality is often associated with term affectively charged to denote the affective the “head” and intuition with the “heart”—a tenor of intuitive judgments, as well as to reflect common divide in philosophy. However, recent how such judgments were generated (i.e., were research suggests other possibilities. To begin “charged” via an affective process). with, intuitive judgments may be triggered by emotions and affect. Positive mood, for example, Other Elements Associated with Intuition has been linked to an increase in the use of intuition and a decrease in more rational ap- Our central characteristics of intuition are proaches to decision making (see Weiss & Cro- based on their commonality to definitions panzano, 1996, for a review). Similarly, manag- across philosophy, psychology, and manage- ers often view affect as an important input to ment. In addition to their commonality, they also intuition and describe intuitions as “affect- appear to be the most “core” features. Conse- initiated decisions” (Burke & Miller, 1999). And quently, we have excluded some additional Hogarth argues that “emotion and affect can, characteristics of intuition since they appear to therefore, be important inputs to intuitive result from the core characteristics we suggest. thought in the sense that they can induce re- To illustrate, several conceptualizations of intu- sponses without corresponding awareness” ition involve a feeling of certitude (Shirley & (2001: 61). Langan-Fox, 1996) and a perception that one’s Moreover, emotions and affect may also play intuitions are correct—despite the lack of ratio- a role in the intuition process itself and, thus, nal analysis (Bruner, 1962; Wescott & Ranzoni, result in affect-laden judgments. Epstein (1990, 1963). This characteristic, however, likely is due 1994, 2002), for example, ties emotion and intu- to the affective and associative properties we ition through the experiential information pro- have discussed. As noted, Agor (1986) has ar- cessing system described above by suggesting gued that as executives make intuitive judg- that all processes in the nonconscious (experi- ments, they often experience strong and positive ential) system are emotionally driven. Bastick emotions (e.g., excitement, harmony). Such pos- makes a similar argument, suggesting that “in- itive feelings may, in turn, lead to an enhanced tuitive information is accessed through appro- sense of confidence in an individual’s own judg- priate feelings” (1982: 279). Epstein further ar- ments (see Tiedens & Linton, 2001, for a discus- gues that the cognitive frameworks in the sion). Thus, if I feel good about a judgment, I experiential system, which he refers to as sche- must be right about it. mas, are “inductively derived from emotionally In addition, the holistic, associative properties significant experiences” (1990: 170). of intuition involve recognizing patterns or other Intriguingly, research in neuroscience has linkages among disparate stimuli. Hence, phi- suggested a link between intuition and affect losophers have linked intuition with “seeing” or via activation of basal ganglia in the human “recognizing” an answer (Osbeck, 1999, 2001). brain (see Lieberman, 2000, for a review). This Because intuition involves “recognizing” a solu- line of investigation has shown that basal gan- tion (Simon, 1996), it is likely that individuals glia are engaged through positive affective will have more confidence in their intuition than stimuli and positive emotional experience, and in a “wild guess,” which is often made when no these same neural mechanisms play a central solution is recognizable.2 role in engendering the nonconscious associa- tions that spur intuitive judgments. In essence, both intuitions and emotional appraisals ap- 2 However, we should be clear that just because an indi- pear to arise through highly similar neurologi- vidual has confidence that the solution is a good one does cal pathways. Taken together, evidence from or- not mean that the individual will adopt the solution. That is, 40 Academy of Management Review January

As noted earlier in the paper, we have also ilar to guessing only in terms of its speed. excluded characteristics ascribed to intuition Guessing neither involves affectively charged that seem unique to a particular disciplinary judgments nor requires making associations domain. For example, intuition is associated through nonconscious information processing. It with both experiential (Epstein 1990, 1994, 2002) also lacks the secondary outcome associated and system 1 (Kahneman, 2003; Stanovich & with these two characteristics of intuition: certi- West, 2000) processes in dual processing theo- tude. Intuition is also different from instincts ries. Both of these processes are associated with and insights—terms often used synonymously additional characteristics (e.g., presence of with intuition in everyday speech. We follow the “vibes,” “seized by emotions,” and “pleasure lead of Hogarth (2001) and Epstein (2002) in ar- driven”) that do not necessarily accord with the guing that biological instincts (e.g., shutting core features of intuition discussed above. Be- one’s eyes in the presence of bright light) are cause not all of these characteristics have tradi- “hardwired” responses or autonomic reflexes to tionally been associated with intuition, addi- stimuli. Thus, instincts are innate capabilities tional validation is needed before viewing them that originate outside the experiential process- as core and central to the concept. ing system. Next, insights or “sudden unexpected thoughts that solve problems” (Hogarth, 2001: Intuition Defined and Delineated 251) may involve experiential processing in the To summarize, intuitions are affectively form of an “incubation period.” However, unlike charged judgments that arise through rapid, intuition, insight is often a lengthy process that nonconscious, and holistic associations. These begins with deliberate, analytical thinking that characteristics not only capture what we mean precedes the incubation period (Hogarth, 2001; by intuition but also help clarify which types of Shirley & Langan-Fox, 1996). Further, when a decision-making processes are intuitive and solution is gleaned through insight, one “sud- which are not. To illustrate, of all other ways of denly becomes aware of the logical relations making judgments and decisions reviewed here, between a problem and the answer” (Lieber- only the nonconscious use of heuristics and in- man, 2000: 110; see also Sternberg & Davidson, ternalized patterns of information fall within 1995, for a more comprehensive treatment of in- what we call intuition. In contrast, we believe sight). This suggests another distinction be- that rational decision making is highly dissim- tween insight and intuition: in the former one ilar to intuition. The former involves the use of consciously becomes aware of the logical con- systematic procedures designed to thoroughly nections supporting a particular answer or solu- assess all pertinent information, evaluate costs tion, whereas in the latter one is unable to con- and benefits, and, ultimately, make a decision sciously account for the rationale underlying the based on conscious deliberation (see Janis & judgment that has arisen. Mann, 1977, for more detail on rational decision- making models). In short, it is highly analytic CONDITIONS INFLUENCING THE and relies on logical connections. Moreover, as EFFECTIVENESS OF INTUITIVE we have discussed, rational decision making DECISION MAKING involves a completely different type of informa- tion processing system than the experiential Thus far, we have focused largely on the pro- system utilized in intuition. In brief, intuition cess of intuiting and how this process differs differs from more rational models of decision from the processes that guide other forms of making in that it is (1) nonconscious, (2) holistic, decision making, such as rational analysis. We (3) associative, and (4) faster. now turn our attention more fully to the products In addition, intuition differs from other deci- of intuiting—intuitive judgments—and the con- sion-making approaches that are typically ditions that explain when these judgments are viewed as “fast.” For example, intuition is sim- most effective. In research that has focused on the effective- ness of intuitive decision making, disagreement individuals may still distrust intuitive means, regardless of abounds as to whether intuitive judgments lead the veracity of the solution. to effective decisions. To begin with, a substan- 2007 Dane and Pratt 41 tial body of research suggests that the use of affect most individuals, regardless of their do- intuition in decision making is generally infe- main knowledge, others have focused more ex- rior to other, more rational models (e.g., Dawes, tensively on expert knowledge structures and Faust, & Meehl, 1989; Kahneman et al., 1982; how such structures influence the quality of in- Meehl, 1954; Schoemaker & Russo, 1993). In con- tuitive decision making within specific do- trast, a growing body of literature suggests that mains. We seek to integrate these bodies of for certain people, under appropriate conditions, work by examining how various degrees of do- intuition may be as good as, or even superior to, main knowledge, ranging from simple heuris- other decision-making approaches (Blattberg & tics to sophisticated “expert” schemas, may in- Hoch, 1990; Hammond, Hamm, Grassia, & Pear- fluence the effectiveness of intuition as a son, 1987; Khatri & Ng, 2000). decision-making approach in a given domain. To reconcile these divergent perspectives, we We also examine how expert schemas may form turn to an exploration of the conditions that in- via implicit and explicit learning. fluence whether intuition is effective as a deci- Second, research suggests that intuition is sion-making approach. Our review suggests good in some situations but not in others. For that two broad sets of factors influence intuition effectiveness: (1) domain knowledge factors and example, research concerned with heuristic bi- (2) task characteristics. These factors are de- ases has focused on how the use of intuition to picted in Figure 1. solve highly structured math and probability First, one of the primary differences between problems can lead to highly inaccurate solu- research on the effectiveness of intuition con- tions. However, as noted in our introduction, in- ducted by researchers interested in heuristics tuition may be most appropriate for “executive” and those interested in expert decision making decisions, which involve strategy, investment, pertains to the relative emphasis attached to the and human resource management issues. These existence and accumulation of domain knowl- types of decisions are far less structured than edge. While some scholars have tended to focus math problems. We discuss each set of intuition primarily on heuristics and heuristic biases that effectiveness factors below.

FIGURE 1 Factors Influencing the Effectiveness of Intuitive Decision Making 42 Academy of Management Review January

Domain Knowledge Factors: Schemas shortcomings of heuristics and stereotypes. It essentially takes a “requisite variety” approach An individual’s knowledge of a domain is re- that the complexity of schemas should match flected in the schemas he or she has about that environmental complexity in order to be effec- domain. We use the term schema generally to tive (see Weick, 1995). We further suggest that denote various cognitive structures that repre- heuristics may be more domain independent sent “knowledge about a concept or type of stim- and may be commonly applied (inappropriately) ulus, including its attributes and the relations across various domains. With regard to domain among those attributes” (Fiske & Taylor, 1991: independence, the relative lack of domain sen- 98). We suggest that a primary means for deter- sitivity diminishes the effectiveness of intuitive mining when intuition will be effective involves decision making as simple “rules of thumb” are the nature of schemas employed by the intuiter. indiscriminately applied to an inappropriately As we discuss below, schemas may be relatively large number of problem domains. With regard simple and contain little domain knowledge to the frequency of their use, research suggests (i.e., are domain independent), as in the case of that individuals who lack adequate domain heuristics (Denes-Raj & Epstein, 1994; Tversky & knowledge may have inflated self-assessments Kahneman, 1974). Alternatively, schemas may of their own ability to make accurate judgments be complex and contain much domain knowl- (Kruger & Dunning, 1999) and, thus, may have a edge, as in the case of experts’ cognitive maps higher propensity to apply simple schemas (Simon, 1996). across a wide variety of situations. Heuristic schemas. In a well-established body Expert schemas. While the heuristic-based of research in psychology and the decision sci- view of intuition has dominated research on in- ences, scholars have argued that intuition in- tuition and problem solving, a growing body of volves the use of heuristics—mental shortcuts research suggests that that “experts” can make that reduce the complex tasks of assessing prob- highly accurate intuitive decisions (Dreyfus & abilities and predicting values to simpler judg- Dreyfus, 1986; Klein, 1998, 2003; Prietula & Simon, mental operations (Tversky & Kahneman, 1974). 1989; Simon, 1987, 1992, 1996). We argue that the When presented with a problem, individuals main difference between these bodies of re- can use heuristics to draw associations among search lies in the nature of the schemas of ex- multiple stimuli, to focus on critical information, perts, which are (1) highly complex and (2) do- and to develop a perception of the right answer main relevant. or best route by which to proceed. Simon and Chase’s (1973) foundational article While heuristics are often useful for quickly on the memory storage patterns of chess mas- assessing probabilities and making decisions ters and grandmasters provides an early exam- in uncertain situations, they may also lead to ple illustrating the role of complex schemas in severe and systematic errors (Tversky & Kahne- guiding the decisions of experts. This study re- man, 1974). Indeed, a large portion of decision- vealed that chess masters are able to recognize making literature over the past three decades at least 50,000 different configurations of chess has focused on heuristic-based judgmental er- pieces on sight, which are stored or “chunked” rors. Such studies suggest that while the appeal as familiar patterns in long-term memory. When of heuristic-based intuition is strong—and that presented with an arrangement of pieces on a individuals will often choose to use heuristics, chessboard, chess masters almost immediately even when they know it is not rational to do so recognize both the patterns of the chess pieces (Denes-Raj & Epstein, 1994)—rational processes and the appropriate strategic moves for the for problem assessment are less subject to ran- given situation. Consequently, grandmasters in dom inconsistencies and systematic distortions speed chess competitions can effectively play (Schoemaker & Russo, 1993). several games simultaneously, even when they We argue that heuristics and other simple are only allowed a few seconds per move (Simon cognitive frameworks are likely to lead to inac- & Chase, 1973). curate intuitive judgments because they tend to Broadening these findings beyond the chess be “simple” and, thus, may be inadequate to domain, “expert” intuition may be aptly de- process complex environmental stimuli. This ar- scribed as a “pattern matching” process, gument mirrors the bulk of research on the whereby information is encoded and chunked 2007 Dane and Pratt 43 into patterns, stored in schemas, and then briefly review the general relationship between equated with environmental stimuli (Simon, learning and the formation of complex, domain- 1996). As Prietula and Simon note when discuss- relevant schemas. ing the difference between a novice and experi- Explicit learning. Explicit learning occurs enced foreman: when individuals are consciously aware that changes are accruing to their underlying knowl- In fact, the veteran does not scan the environment and process information any faster than the inex- edge bases (Lovett, 2002). Perhaps the most re- perienced foreman; rather, he (or she) has learned searched link between explicit learning and in- to grasp the meaning of certain patterns of oper- tuition has been on how experts, such as chess ations and activity on the plant floor. In a sense, grandmasters, come to attain mastery over a the foreman does not need to think about this particular domain. The general argument pos- information; he simply reacts to it (1989: 121). ited in this research is that experts deliberately Scholars advocating for the effectiveness of develop a vast repertoire of patterns in memory expert or “mature” intuition (e.g., Baylor, 2001; that allows them to respond to contingencies in Blattberg & Hoch, 1990; Burke & Miller, 1999) use an automatic and proficient manner (Simon, the same underlying logic as Simon and his 1996; Simon & Chase, 1973). Thus, we suggest a colleagues: experts have complex cognitive general relationship between explicit learning maps (or schemas) that trigger effective intuitive and intuition effectiveness. judgments. Proposition 2: Explicit learning will Despite the promise of these complex sche- positively influence the effectiveness mas for effective decision making, an important of intuitive decision making through boundary condition applies. Because complex the formation of complex, domain- schemas develop in a particular domain (one’s relevant schemas. area of expertise), they are more likely to lead to effective decisions in that domain than when However, learning is heightened with certain used in a different domain or context. Thus, com- types of practice. Research suggests three pri- plex managerial schemas may serve a manager mary elements of “good” practice: duration, rep- well at the office but may lead to inaccurate etition, and feedback. First, development peri- intuitive judgments at home. This suggests that, ods for mastery tend to be long. With respect to for intuitions to be effective, schemas must be the relationship between practice and expert both complex and domain relevant. intuition in management, Khatri and Ng argue that, for managerial intuition to be effective, it Proposition 1: Individuals who can “requires years of experience in problem solv- bring complex, domain-relevant sche- ing and is founded upon a solid and complete mas to bear on a problem are more grasp of the details of the business” (2000: 58). likely to make effective intuitive deci- More specifically, research suggests that a ten- sions than those who employ heuris- year period of intense preparation appears nec- tics and simpler, domain-independent essary for achieving expertise in a domain (Er- schemas. icsson & Charness, 1994; Ericsson, Krampe, & Tesch-Ro¨mer, 1993; Simon & Chase, 1973). Additional characteristics of practice that Domain Knowledge Factors: Learning strengthen the link between explicit learning In addition to research on the content of sche- and the development of complex, domain- mas, in a growing body of work, researchers are relevant schemas are repetition and feedback. exploring how individuals come to gain the Ericsson and colleagues, for example, argue complex, domain-relevant schemas needed for that it is only through “deliberate practice,” in- effective intuition. The literature on expertise volving repetition and successive refinement discussed above suggests that there may be a through concentration and immediate, accurate learning component to developing the schemas feedback, that an individual will develop the that underlie accurate intuitive judgments. In capacity to perform as an expert (Ericsson & particular, researchers are coming to connect Charness, 1994; Ericsson & Lehmann, 1996; Erics- the formation of sophisticated cognitive struc- son & Smith, 1991). Similarly, Hogarth (2001) ar- tures to both explicit and implicit learning. We gues that practice done in “kind” learning struc- 44 Academy of Management Review January tures will facilitate effective intuition. Kind edge is stored in the brain differently from other learning structures are those where feedback is types of knowledge. To illustrate, knowledge ac- both relevant and exacting. Relevant feedback quired via implicit learning will be retained is conceptualized as speedy and accurate feed- when an individual suffers from amnesia, even back that enables the individual to learn to as- when more explicit knowledge is lost (Seger, sign proper causal relationships among deci- 1994). This suggests that although explicit and sions, actions, and outcomes. Exacting feedback implicit learning can occur simultaneously in a implies a significant need for precision. A brain given context, implicit learning involves a dif- surgeon, for example, has little room for error ferent process of knowledge acquisition and while operating on a patient. Exacting feedback storage. generally leads to accurate learning because Both implicit learning and intuition have been small errors can have serious consequences. linked to the nonconscious processing system In sum, we argue that individuals who want to described earlier. Just as intuition involves a form complex, domain-relevant schemas must nonconscious, experiential processing of infor- engage in repetitive practice over a long period mation stored in memory, implicit learning re- of time. They must also receive feedback about fers to a similar nonconscious process of knowl- their performance that is both accurate and ex- edge acquisition. Reber (1989) has tied implicit acting. learning to “intuitive knowledge” and argues that it is through implicit learning that individ- Proposition 3a: The relationship be- uals come to form the complex cognitive struc- tween explicit learning and the for- tures necessary for intuitive judgments and de- mation of complex, domain-relevant cisions. In support of this claim, researchers schemas will be strengthened when have linked implicit learning to the acquisition individuals engage in focused, repet- of grammar rules (Reber, 1989; Reber et al., 1991) itive practice over long periods of and spatial processing algorithms (e.g., Lewicki time. et al., 1988), as well as to other types of knowl- Proposition 3b: The relationship be- edge acquisition, such as covariation and puzzle tween explicit learning and the for- learning (see Seger, 1994, for a review of implicit mation of complex, domain-relevant learning tasks). schemas will be strengthened when We believe that implicit learning may result individuals perform in the presence of in the complex, domain-relevant schemas nec- “kind” learning structures (rapid and essary to engender the effective use of intuitive accurate feedback and exacting con- judgments in managerial decision making. To sequences). illustrate, the veteran foreman noted earlier by Prietula and Simon (1989), who “has learned to Implicit learning. While explicit learning may grasp the meaning of certain patterns of opera- indeed make for more advanced and effective tions and activity on the plant floor,” may have intuitive decision making in some situations, a developed this proficiency not simply through growing body of research suggests that it may explicit learning—since it is unlikely that the not always be necessary for the formation of foreman “deliberately practiced” observing op- complex, domain-relevant schemas. Instead, erations on the plant floor—but, rather, through schemas may develop through implicit learning. implicit learning as well. Implicit learning refers to the process by which Proposition 4: Implicit learning will one acquires—outside of one’s conscious aware- positively influence the effectiveness ness—knowledge about the structure or pattern of intuitive decision making through underlying a complex stimulus environment the formation of complex, domain- (Reber, 1989: 219; see also Lewicki, Hill, & Bizot, relevant schemas. 1988; Reber, 1992; Reber, Walkenfeld, & Hern- stadt, 1991; Seger, 1994; Stadler & Frensch, 1998). It is important to note that just as there are Implicit learning differs from its external factors that strengthen the relationship between counterpart in important ways. Not only are in- explicit learning and the formation of complex, dividuals unaware that such learning is occur- domain-relevant schemas, there are also factors ring, but research suggests that implicit knowl- that strengthen the link between such schema 2007 Dane and Pratt 45 formation and implicit learning. In particular, product planning, and corporate strategy forma- while implicit learning is largely automatic, tion. These unstructured problems are condu- there is some research that suggests that indi- cive to intuition because of the absence of well- viduals may be able to “process stimuli in ways accepted decision rules for dealing with such that allow implicit learning to function more situations. Echoing this argument, other re- effectively” (Seger, 1994: 176). Such control may searchers have argued that analytical strate- be afforded by consciously paying attention to gies that work well for problems that are well- the stimuli in question (Carlson & Dulany, 1985; defined are much less effective for ill-defined Nissen & Bullemer, 1987). Attention, however, is problems (Claxton, 1998; Hayashi, 2001). Intu- not focused on attempts to deliberately decipher ition, as a holistically associative process, may cause and effects. As Reber’s research has actually help to integrate the disparate ele- shown (Reber, 1976; Reber, Kassin, Lewis, & Can- ments of an ill-defined problem into a coherent tor, 1980), attention directed toward such “hy- perception of how to proceed. As Shapiro and pothesis testing” will lead to substandard per- Spence (1997) further note, intuition is often more formance. Rather, individuals should focus on effective than analysis in enabling individuals stimuli as a whole. For example, while manag- to develop an understanding of the structure of a ers may be unable to consciously notice those complex system. For this reason, intuitive judg- rewards that will best motivate individuals dur- ments are said to become more effective relative ing a time of crisis (a type of covariation learn- to rational analysis as a problem becomes in- ing), they may facilitate the implicit learning of creasingly unstructured. these patterns by paying attention to both re- Intellective versus judgmental tasks. We ar- wards and employees during the crisis. Thus, gue that the notion of “problem structure” is we build from this body of research and posit captured in the distinction between intellective the following. and judgmental tasks (Laughlin, 1980; Laughlin & Ellis, 1986; McGrath, 1984). According to Proposition 5: The relationship be- Laughlin, intellective tasks involve a “definite tween implicit learning and the for- objective criterion of success within the defini- mation of complex, domain-relevant tions, rules, operations, and relationships of a schemas will be enhanced when indi- particular conceptual system,” whereas judg- viduals focus attention on the stimulus mental tasks involve “political, ethical, aes- environment. thetic, or behavioral judgments for which there Returning to our initial focus on speed versus is no objective criterion or demonstrable solu- accuracy, we suggest that intuitions are more tion” (1980: 128). Laughlin (1980) views the intel- likely to be effective when they tap into com- lective/judgmental distinction as a continuum, plex, domain-relevant schemas than when they as opposed to a strict dichotomy. involve heuristics. These complex, domain- While intuition theorists have not referred relevant schemas, in turn, are more likely to be specifically to intellective and judgmental developed when individuals engage in focused tasks, research has shown that intuition may be and repetitive practice over a long period of most effective for moral judgments (Haidt, 2001), time, when they operate in kind learning envi- aesthetic ratings (Hammond et al., 1987; Wilson ronments, and when they focus their attention & Schooler, 1991), and the like. Further, research on the stimulus environment. has shown that intuition is relatively weaker than rational analysis for tasks involving defi- nite objective criteria (MacGregor, Lichtenstein, Task Characteristic Factors & Slovic, 1988; McMackin & Slovic, 2000). Thus, it In addition to factors surrounding the domain appears that intuitive judgments may be more knowledge of the intuiter, evidence suggests effective than rational approaches to decision that problem structure may also impact the ef- making on judgmental tasks, whereas the con- fectiveness of intuitive decision making. Accord- verse is true for intellective tasks. This suggests ing to Shapiro and Spence (1997), problems lie the following proposition. on a continuum of structuredness. At the less structured end of this continuum lie such prob- Proposition 6: As the problem structure lems as merger and acquisition decisions, new associated with a task becomes more 46 Academy of Management Review January

judgmental, the effectiveness of intui- Possible Relationships Among Effectiveness tive decision making will increase. Factors In considering the two broad sets of factors Returning again to our discussion of speed ver- that we view as determining the effectiveness of sus accuracy, intuition is most likely to effec- intuitive decision making, we have said little tively manage this trade-off when it is brought about whether there are any connections be- to bear on judgmental tasks. tween these two sets of factors. That is, we have Factors influencing task characteristics: Envi- yet to discuss whether domain knowledge fac- ronmental uncertainty. While we showed earlier that the domain knowledge factors concerning tors are in some way tied to task characteristic intuition effectiveness are rooted in a sizable factors in the model we have proposed (Figure body of work on explicit and implicit learning, 1). While a variety of linkages may be possible, relatively little has been said about concepts a highly likely possibility concerns linking the that may be linked to intuition effectiveness and most effective domain knowledge characteris- task characteristics. The work that does exist tic—expertise—with the most desirable type of suggests that the type of environment in which task for intuition—judgmental. an organization operates may influence the ef- As noted above, the individuals most capable fectiveness of intuitive decision making among of making the associations that trigger accurate managers (Agor, 1986; Khatri & Ng, 2000; Shapiro intuitive judgments are those who possess com- & Spence, 1997). In one of the few empirical plex, domain-relevant cognitive structures studies in this area, Khatri and Ng (2000) found within a particular domain. Such individuals moderate support for their thesis that, during may be referred to as experts (Chi, Glaser, & times of environmental uncertainty, the use of Farr, 1988; Dreyfus & Dreyfus, 1986; Prietula & intuitive decision making among executives re- Simon, 1989; Shanteau & Stewart, 1992). In Fig- sults in greater organizational performance. ure 1 we identify a link between expertise and Unfortunately, based on this study alone, it is intuition effectiveness via the direct connection difficult to conclude why this result was found. drawn from complex, domain-relevant schemas However, one likely possibility is that during to the effectiveness of intuitive decision making. times of environmental instability, managers However, this argument raises the question of have to collect and sort through a large, and whether the relationship between schema type often incomplete, amount of data in a short time and intuition effectiveness is always of a simi- (Khatri & Ng, 2000). That is, decision-making lar magnitude across various types of tasks. Ev- tasks in these environments may be nonroutine. idence suggests that the answer to this question Building on this perspective, we suggest that is not necessarily. environmental uncertainty results in a shift As we have suggested, the holistic and asso- away from structured problems and standard ciative properties of intuition may help to inte- operating procedures and is likely to result in a grate the disparate elements of an ill-defined, or multitude of “plausible alternative solutions,” judgmental, problem into a coherent perception rather than a single objective criterion for suc- of how to proceed. Experts may be especially cess. Under such conditions, decision-making well-suited to draw these holistic associations scenarios may move from the intellective end of on judgmental tasks because the sophistication the task continuum toward the judgmental end. of their cognitive structures may permit them to Thus, the positive relationship found between integrate the components of an ill-structured environmental uncertainty and the effective- problem with relative ease. Such an interaction ness of intuitive decision making may be medi- is implied in many of the examples in the be- ated by the task characteristics described ginning of our paper. For example, the develop- above. ment of the Dodge Viper and the prime-time launch of Who Wants to Be a Millionaire both Proposition 7: The relationship be- involved highly experienced executives faced tween environmental uncertainty and with ill-structured tasks. the effectiveness of intuition is medi- In contrast, well-defined or intellective tasks ated by judgmental task characteris- may not call for the same extent of holistic and tics. associative connections. As argued above, such 2007 Dane and Pratt 47 tasks may be approached more effectively conditions in which individuals tend to trust in through analytical procedures. Moreover, re- or rely on their intuitions. Intuition “use” factors search suggesting that the intuition of experts is are critical, because even if we can foster intu- ineffective has tended to examine decision mak- itions that are accurate (e.g., through complex, ing involving highly structured tasks (Bazerman, domain-relevant schema), these intuitions must 1986; Dawes et al., 1989; Kahneman et al., 1982). be “trusted” if they are to be followed. Con- Hence, we argue that our posited link between versely, intuitions that develop through heuris- complex, domain-relevant schemas (as pos- tics and more simplistic schemas may, in many sessed by experts) and effective intuition may circumstances, be sufficiently compelling to be be stronger when experts are working on judg- used as primary inputs to decision making, de- mental tasks. Accordingly, we suggest the fol- spite their relative imprecision and dubious ac- lowing. curacy. Research on intuition suggests a variety of Proposition 8: The relationship be- conditions in which we are most likely to use our tween complex, domain-relevant sche- intuitions rather than to invoke and rely on ra- mas and the effectiveness of intuitive tional analysis. Among the most common are decision making is moderated by task the presence of positive moods (e.g., Bless, characteristics such that as tasks be- Bohner, Schwarz, & Strack, 1990; Elsbach & Barr, come more judgmental, the strength of 1999; Isen, Means, Patrick, & Nowicki, 1982; the relationship will increase. Ruder & Bless, 2003; Schwarz, Bless, & Bohner, 1991) and the role of stable individual differ- DISCUSSION AND IMPLICATIONS ences in thinking style (Briggs & Myers, 1976; Pacini & Epstein, 1999; see also Jung, 1933). How- We have attempted to better delineate what ever, there may be other, less explored use fac- intuition is3 and when people are likely to use it tors that merit further attention. well. In this effort we have synthesized a large To illustrate, research might explore the role and disparate body of research on intuition and of the body in intuition. Bastick (1982) directly moved the field forward through the develop- ties intuition with “body knowledge,” and Agor ment of several theoretical propositions. How- (1986) and Hayashi (2001) link the use of intuition ever, it is sometimes only in taking stock of what with specific “body cues.” More generally, affec- is known that it becomes clear what is not. tive descriptions such as “gut feelings” tie While this review helps address many issues changes in emotions to bodily changes. In a regarding intuition, it raises several other is- fascinating study, Bechara, Damasio, Tranel, sues, and several additional avenues for re- and Damasio (1997) found that individuals search, as well. Our comments in this section asked to play games where the rules are not concern the issues we feel are most critical to known, but which differ in terms of their level of bear in mind when conducting further research risk, will generate skin conductance responses on intuition. before engaging in high-risk games, even before they have consciously understood that the Intuition “Use” Factors games are risky. This suggests that the body may “know” and be transmitting information While we have focused extensively on the fac- outside of conscious awareness. Further, as tors contributing to the effectiveness of intuitive Bodenhausen (1990) has shown, circadian varia- decision making, we have said little about the tions impact the use of heuristic stereotypes such that individuals who are most alert in the 3 We should note that we have been viewing intuition as morning (“morning people”) are more likely to a relatively homogenous concept. Wild (1938), however, ar- rely on heuristic processing of information late gued for the existence of aesthetic, moral, and religious in the evening, whereas “night people” exhibit intuition. Further, he noted that intuition can arise from the opposite pattern. While promising, research divine sources and from the collective unconscious—and not that examines the connection between the body just from our own experientially based cognitive schemas. Future research may help to disentangle what have been and the use of intuition remains scant. perceived as different “types” of intuition (e.g., managerial More “macro” determinants of use, such as versus mystical intuition). cultural factors, may also play a role in intuition 48 Academy of Management Review January use. For example, cultures with a low emphasis switch between “habits of mind” and “active on “uncertainty avoidance” (Cyert & March, thinking” is the ultimate skill in today’s organi- 1963; Hofstede, 2001) are willing to “take un- zations. known risks” and are “comfortable with ambi- Researchers have put forth a variety of recom- guity and chaos” (Hofstede, 2001: 161). Because mendations about how to use intuitions in com- intuitive judgments are, by their very nature, bination with more rational decision making. difficult to justify rationally and often involve For example, Blattberg and Hoch (1990) exam- unknown levels of risk, cultures low in uncer- ined the specific weightings that should be ap- tainty avoidance may be more inclined than plied to rational models and intuitive judg- other cultures to favor intuitive judgments in ments, respectively, in making decisions. In decision making. The “masculine versus femi- assessing the accuracy of brand managers’ pre- nine” cultural distinction (Hofstede, 2001) may dictions of coupon redemption rates as com- also account for differences in the use of intu- pared to a mathematical forecasting model, they ition across cultures. In particular, feminine cul- determined that a 50/50 weighted combination tures, which emphasize the importance of feel- of model forecast and manager intuition leads ings over logic, may be inclined to accept forms to more accurate predictions than either deci- of judgment that are tied to affect and emotion. sion-making method in isolation. If, as we contend, intuition is tied to affect and Shapiro and Spence (1997) further argue that emotions, intuitive decision making may be re- the ordering of the two types of decision making spected and employed in feminine cultures. is also important. They suggest that intuition Consistent with this argument, Hofstede (2001: should be recorded first, followed by a more 318) notes that managers in feminine cultures thorough analytical assessment of the problem. are expected to use intuition and deal with feel- The degree to which rational decision making ings. should be emphasized, however, should depend More generally, research should be done to on the nature of the task (e.g., structured or un- more explicitly link intuition use factors with structured). In contrast, Agor (1986) argues that those factors we have identified as being inte- many managers use intuition after engaging in gral to intuition effectiveness. For example, it rational analyses, for the purpose of synthesiz- may be the case that learning processes link the ing and integrating the information gathered two models: as individuals use intuition more, and analyzed. Unfortunately, while many pro- they may become more effective in its use. Other vocative ideas about the interplay between ra- factors may also be common to both intuition tional and intuitive decision making have been use and effectiveness. For example, judgmental suggested, empirical research in this area, par- tasks such as moral and aesthetic problems, ticularly in the field of management, remains which may be particularly conducive to intuitive insufficient. problem solving, may also trigger the use of intuition (Haidt, 2001; Hammond et al., 1987). Beyond Decision Making We have focused primarily on the role of intu- Interplay Between Intuition and Analysis ition in decision making. However, intuition In our attempt to differentiate intuition from may have other positive benefits as well. To other decision-making approaches, such as ra- illustrate, some preliminary work suggests a tional models, we did not discuss at length link between intuition and creativity. Langer when and how different ways of knowing might (1989: 117), for example, has suggested that cre- complement each other. Researchers who advo- ativity arises through an “intuitive experience of cate a dual process approach assume that these the world,” whereas rational thinking serves two systems of knowing work together in mak- only to confirm “old mindsets” and “rigid cate- ing decisions. In a similar vein, Simon (1987) gories.” Likewise, Poincare´ (1969: 210) has de- asserts that effective managers do not have the clared that logic is the “instrument of demon- luxury of choosing between analysis and intu- stration,” and intuition the “instrument of ition—real expertise involves the use of both invention.” However, with the exception of a few types of decision making. And Hodgkinson and studies (e.g., Raidl & Lubart, 2000-2001), little em- Sadler-Smith (2003: 261) argue that the ability to pirical research has connected intuition to cre- 2007 Dane and Pratt 49 ativity. In light of the growing interest in creativ- In addition to highlighting the promises of ity in the management sciences, unpacking how intuition, our research also reveals potential intuition ties in with creative thought may yield challenges and barriers to facilitating effective valuable theoretical contributions to this line of intuitions. To illustrate, one could argue that the research. rapid rate of change that characterizes current Next, recent appeals for additional scholarly organizational environments makes intuitive work on business ethics (e.g., Donaldson, 2003) decision making more necessary today than it suggest a need for fresh perspectives on moral has been in the past. However, it is also true that reasoning and ethical decision making in orga- job mobility is increasing. As a result, individu- nizations. As noted above, Haidt (2001) has ar- als are less likely to engage in a significant gued that moral judgments are intuitive. Thus, degree of focused practice in a particular do- by better understanding how intuitive judg- main (Prietula & Simon, 1989). In our language, ments are made, we might better identify the this suggests that individuals may not be able conditions under which individuals disregard to form complex, domain-relevant schemas— their intuitions (i.e., their moral sense of ethical and, thus, must rely more often on simple sche- behavior) and engage in actions that conflict mas and heuristics. This is likely to result in the with principles of ethics in organizations. less effective use of intuitive judgments at a time when their use is increasingly critical. Ac- cordingly, organizations that retain members for long periods of time in similar job domains may Managerial Implications be more likely than others to provide members We believe that research on intuition is inher- with sufficient conditions to develop complex, ently practical. In this paper we have suggested domain-relevant schemas. This suggests a need factors that may lead managers to make good to reduce the rate of member turnover in order to decisions quickly. Thus, organizations that wish foster the development of more effective intui- to facilitate effective intuiting need to concen- tive decision making among members. Reten- trate on promoting ongoing and deliberate prac- tion is critical if one is to keep highly special- tice in kind learning environments. They may ized knowledge workers—a crucial component also encourage managers to be mindful of their to competing in a “knowledge economy.” environments in order to facilitate implicit Keeping experts, however, is only one chal- learning. By remaining alert and viewing prob- lenge in utilizing experts in a knowledge econ- lems from multiple perspectives, “mindful” omy (Matusik & Hill, 1998). Ideally, the informa- managers may form new cognitive categories tion from experts can be captured by the and distinctions (see Langer, 1989) that bolster organization (Hammer, Leonard, & Davenport, the complexity and domain relevance of their 2004; Osterloh & Frey, 2000). Can the complex, schemas. Finally, we have suggested that man- domain-relevant schemas of experts be trans- agers should be wary of using intuitions when ferred to automated information systems or to faced with intellective tasks. other individuals? While we have identified the In this discussion section we have also sug- conditions under which an individual can gain gested how future research might better under- complex, domain-relevant schemas, it is not stand the relationship between intuition effec- clear whether or how the content of these sche- tiveness and use, thus ensuring that individuals mas can be transferred from one individual to feel comfortable “trusting their gut” when ap- another. Classic work on the transfer of exper- propriate (e.g., when the individual has domain tise, however, suggests that having experts expertise and is working on a judgmental task). working together with novices may be critical to Moreover, we believe that better understanding this issue (Collins, 1982). how intuition and rational analysis work to- A related challenge for managers concerns gether will result in an even more complete pic- the transferability of intuitive skills across ture of decision effectiveness among managers fields and industries. Organizations, interested and other organizational members. Beyond de- in acquiring individuals with expert knowledge, cision making, understanding how intuition often hire managers and executives from other plays a role in creativity and ethics seems crit- firms and agencies. While such individuals are ical to improving key organizational processes. pursued for their rich knowledge bases and de- 50 Academy of Management Review January cision-making abilities, our model proposes that to focus extensively on these mechanisms and cognitive schemas must be domain relevant to how they may influence behavior in organiza- generate accurate intuitive judgments. For this tions. For this reason, we hope that our treat- reason, an individual who possesses expert in- ment of intuition may help to put the “noncon- tuition in one field or industry may not be as scious” into organizational studies. effective in making intuitive decisions in a field or industry that differs substantially from the environment in which the individual’s cognitive REFERENCES schemas were developed. This brings to mind one of the key weaknesses ascribed to Carly Abernathy, C. M., & Hamm, R. M. 1995. Surgical intuition: Fiorina in her very public and sudden ousting What it is and how to get it. 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Erik Dane ([email protected]) is a doctoral candidate in organizational behavior at the University of Illinois at Urbana-Champaign. His current research explores how professionals leverage their experience and intuition to respond effectively to job- related challenges. Michael G. Pratt ([email protected]) is a James F. Towey Fellow and associate profes- sor of organizational behavior at the University of Illinois at Urbana-Champaign. He earned his Ph.D. in organizational psychology from the University of Michigan. His current research explores intuition, meaning, and identity dynamics among profes- sionals.