The present paper work represents an attempt to explain the way throughout which, top managers adopt/make efficient decisions by using experience, intuition, imagination and management of emotions. The paper is based on several years of observation, empirical evaluations and activity/research into the real economy developed by the authors. In the economy, there are few practical situations when top managers take into account theoretical models of decision making. Instead, they use to the “quantitative” thinking and “qualitative” thinking in order to valorise their experience, intuition and imagination for defining some decisional issues and selecting alternatives.”The line” sharing conscious mind and unconscious mind is yet little understood by the human thinking; we believe that for some people there is a thin “line” of demarcation between those two, while for other people the same “line” becomes wider. The human mind remains a unique processor of tacit/explicit knowledge. By reference to the basic mechanism of a computer, or AI techniques, the basic mechanism of the human mind remains, for the time being, completely different. (It is true that the computer also processes knowledge, but throughout an entirely distinct manner than the human.)
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We know that there are concepts as emotional intelligence, social intelligence or other alike, which are very helpful for management practice. Even if we are accepting such developments (EI, ES, etc.) we believe that the main role for efficient decision making process is granted to some skills/abilities next to “the demarcation line” between conscious mind and unconscious mind (for these skills/abilities we suggest the phrases non-rational thinking and/or second bounded rationality.)
Key words: non-rational thinking (NRT), second bounded rationality (SBR), knowledge dynamics, mix of conscious and unconscious
1. Introduction to decision making
The decision making process includes a set of activities that a manager undertakes in order to solve a decisional matter/issue, referring to a certain system of values.
Usually, any manager in the real economy makes decisions based on experience, logics, ration, intuition, emotions etc; each choice aims to solve a specific problem, noted Pi , which means reaching an objective Oi , targeted by the manager. For all situations where exist two or more alternatives to solve the problem Pi (n alternatives of solving, n â‰¥ 2) we are discussing about a decision making process. It has to be mentioned that choosing the alternative from n possible variants constitutes only a single step out of five/six stages of the decision making process; the most frequently, the decisional process is divided into six steps/stages, respective:
S.1. Defining the problem Pi;
S.2. Gathering / processing information;
S.3. Constructing n alternatives to solve the problem;
S.4. Choosing an alternative from the n (decision);
S.5. Implementation of the decision;
S.6. Evaluating the outcomes.
It has been argued, in theory, that the human activity system (HAS) is a type of holonic system to which is referring the optimization of all other systems (in the economy) (McHugh a.o., 1995). Therefore, any manager is referring to a system of values generated from social practice corresponding to a certain level of development of mankind. That mention is necessary, because the difference between rational, irrational and non-rational, including the case of analysing the decision making process cannot be done without taking into account a reference system.
2. From Kenneth Arrow to Karl Popper
The human thinking is far from being precise, linear, structured and/or predictable; on the contrary, human thinking remains somehow â€žmysterious” and unpredictable; the rational, the irrational and the non-rational remain specific human attributes. When we say “mysterious” we think at a question that, while it makes perfect grammatical sense, cannot in principle be answered (Oakes, 1998). We further mention some scientists who argued for the existence/presence of non-rationality within some “shots” of human thinking; this type of non-rational thinking “shots” are common for decision making, scientific discovery and chess game.
American professor Kenneth Arrow has a theory about group decision making, also called “impossibility theorem”, according to which for a large number of cases, any decision making cannot satisfy the pre-established rationality frame. In order to develop his theory, the author begins with some concepts of classical logics demonstrating in a personal manner the fact that rationality criteria cannot be all reached in those situations which imply at least two options of choice (n â‰¥ 2) (Arrow, 1963).
“Decision making, say Maynard and Mehrtens, it’s presumed to be based exclusively upon rational criteria and gives too little credit to the possibility that decisions could be influenced by unconscious “scenarios” and “intuition” (Maynard/Mehrtens, 1993). According to the previous authors, the intuitive and non-rational processes have an important contribution to the decisional act; alongside with the conscious, the unconscious is more and more regarded at as a supporting factor for any rational behaviour; this implies synchronization between unconscious and conscious beliefs (Maynard/Mehrtens, 1993).
Economist Janos Kornai, in the prestigious work Anti-equilibrium, considers that in the real economy it has been observed that practically the rule is to make decisions based on routine, or even by random, respectively on empirical basis and without taking too seriously into account the models suggested by theory (Kornai, 1974).
Herbert Simon, Nobel winner, 1978, imposed the notion of bounded rationality, referring to the restrictions that the manager faces in the real economy; this concept is based on the fact that rationality of individuals is limited by the information they have, the cognitive limitations of their minds, and the finite time having to make a decision (Simon, 1957). Thus, by this approach, the decision making practice aims to find an acceptable solution rather then the best solution for the Pi problem (Simon compares the decision making with the chess game and the design in engineering; Simon, 1972). However, including in Simon’s perspective, the most people are only partly rational, and they are in fact emotional/irrational in the remaining part of their actions (Simon, 1957).
Karl Popper, also a thinker, considers that the scientific discovery consists, in its essence, of a non-rational moment towards which there is no logical way/path, based exclusively on the purest intuition (Popper, 1975). Obviously, as far as the above mentioned author is right, meaning that the scientific discovery is reached by intuition and only secondly throughout rational/logical structures, then it implicitly arises a real parallelism between the problematic of the decision making process and the logical and/or empirical procedure that stands as basis for the scientific discovery (Tacu, 2003). â€žNew ideas have a striking similarity to genetic mutations” (Popper/Eccles, 1977).
3 Human thinking and knowledge
The invoked concepts, respectively human thinking and knowledge are, to a great extent, inseparable; naturally, only individuals gather/process knowledge. Thus, in order to understand how knowledge is being processed, how experience is being gathered, it is necessary first to understand the way human thinking mechanism is functioning. We presently discuss about natural intelligence, artificial intelligence, emotional intelligence, social intelligence and other similar concepts. Which are the implications of these developments of research for the effective management?
There are many papers regarding the brain’s way of working and the human thinking mechanism, but only in the last decade neuroscience has made remarkable progresses with respect to the brains’ development. “At birth, say Buckingham/Coffman, the children’s brain contains 100 billions of neurons;” during lifetime their number remains approximately the same, and these neurons represent the raw material for the brain (Buckingham/Coffman, 1999). Therefore, â€žquantitatively” speaking we are all relatively equal with the respect to the thinking capacity (Wonder, 1985). The mind of the future adult is something else though; it consists of the connections between the neurons, connections which are named synapses. On Pinker’s opinion, certain human skills are innate, as language, while other human faculties (the mind) are the result of natural selection and individual’s adaptation to the environment (Pinker, 1997). The brain’s working mechanism, as we perceive it now, it is probably the result of natural selection and genetic mutations which happened during millions of years. As Dawkins proposes, the nature may be compared to a blind watchmaker, who supervised the gradual “finishing” of an extremely complex biological mechanism (Dawkins, 1986). Other authors discuss about a blind programmer, subsequently reaching to the eternal dispute con or pro Darwin (Oakes, 1998; Fodor, 2000; Pinker, 1997); we prefer to avoid the invoked dispute, reasoning for which we hold to the common approaches regarding the thinking mechanism.
If we take into account the neuroscience, it results that starting from the age of 3 and until somewhere around the age of 16, the children’s structuring of the thinking mechanism is being developed; when the child reaches the age of 3, the connections between the neurons are numerous, meaning up to 15.000 synapses for each cell; due to the fact that at this age the brain is overloaded, it begins to sort among these links (Buckingham/Coffman, 1999). Over time, some connections/links become stronger and transform themselves into a highways system, each highway having four ways of “light traffic”; simultaneously, other connections/links are less used then the first category, and if they continue to be “neglected” they may transform into a “secluded ground” (Buckingham/Coffman, 1999).
Throughout what we call natural intelligence, we comprehend the individual’s skill to gather/process knowledge, to recur to experience and to adapt to new contexts. There are various approaches pro and con the IQ (Intelligence Quotient), but the majority of scientists accept the idea that intelligence is also a matter of environment; some aspects as emotions, intuition, imagination, interpersonal skills and other individual characteristics cannot be evaluated (Richard Nisbett, University of Michigan).
The phrase artificial intelligence (AI) was used in the ’60es by Marvin Minsky, but nowadays exists an entire domain of informatics dealing with AI (this domain regards the copying and/or reproducing of the human thinking mechanism and transposing it into the software component of any computer) (Tacu, 2003). There are authors, as Howard Gardner, who discusses the multiple intelligences, with reference to the eight types of intelligence (kinaesthetic, interpersonal, intrapersonal, linguistic, logical, naturalistic etc.) (Gardner, 1983).
A great number of authors argue about the favourable influence of emotional intelligence in the management area, including in decision making process; emotional intelligence reflects a person’s skills/capabilities to understand and administrate his/her emotions within the relationships with others (there are five components: self-awareness, empathy, self-management, awareness of others and relationship management; Goleman, 1995). The previously invoked concept derives from the social intelligence concept, the latter reflecting the skills we gather under the influence of social environment, family and school, even from the first day of life (Goleman, 2006; Scott-Ladd, 2004; Mellers, 2001; Sevdalis, 2007).
As members of various organisations in society, individuals gather and process knowledge; starting with signs and/or data, they built “hierarchically” certain structures that we call information; the last ones are “hierarchically” mixed and become what we call knowledge (BrÄƒtianu/Andriessen, 2008). Nowadays, knowledge management became a â€žfashionable” phrase into the world of successful corporations; “knowledge represents the most valuable intangible resource” upon it’s based the contemporary social progress (BrÄƒtianu, 2009). The knowledge stored by a person (and/or organization) is and stays closely linked to the direct/indirect experience, to formal/informal learning which that person controls; it is imperative to distinguish between tacit and implicit knowledge, because they have different characteristics depending on their way of expression, as resulting from the next table (McInerney, 2002).
Table 1. Some characteristics of tacit and explicit knowledge
Transferred through conversation
Held within self
Documented (written, taped etc.)
Can be viewed or heard
Shared with others
Reports, lesson, learned
Source: Adapted from (McInerney, 2002), based on (Polayni, 1962, 1983)
As we further notice, the conscious and unconscious manipulation and/or knowledge processing is associated to a great extent with explicit knowledge and, respectively, with tacit ones, but demarcation between conscious/unconscious is extremely indefinite for the functioning of the thinking mechanism. Abilities/skills as intuition, imagination or management of emotions are based upon the experience gathered by individual; this experience becomes “a mixture” of tacit and explicit knowledge. How does the individual’s mind work when it has to “extract” knowledge and use it together with intuition/imagination in order to generate new ideas? How clear is the demarcation between the logic and non-logic thinking structures when it is being generated a new idea?
4 Non-rational thinking (NRT) definitions
Referring to human thinking and associated behaviour, we distinguish between rational, irrational and non-rational; the invoked distinction is to be found at Herbert Simon, also (he uses the phrase of non-rational for the situation when the manager intuits that certain objectives are “support instruments” for other objectives) (Simon, 1993).
In our view, we define non-rational thinking (NRT) as an extension of rational thinking, respectively as a native reflex of individual for “mixing” thinking into n patterns, recurring to logic and extra-logic structures in order to reach an objective. From another point of view, we could say that logic structures and rational thinking mainly belong to the individual’s conscious, while non-logic structures and non-rational thinking mainly belong to the individual’s unconscious. Authors as Howard Gardner discuss about multiple intelligences (even if it seems to be more about the classification of certain mental/physical abilities of persons); others distinguish between general intelligence and emotional intelligence and argue that both types of intelligence are equally important/relevant for obtaining organisational success, inclusively for efficient decisions (Goleman, 1995; Scott-Ladd, 2004; Gardner, 1983). It is possible that, practically, they all strike towards a single type of natural intelligence, namely the human intelligence, the variety of theoretical developments being just different points of focusing upon the same reality.
Throughout a person’s rational behaviour we understand the behaviour defined by the rationality at the social level, which takes into account the values accumulated by society; by rationality we understand a set of skills/aptitudes that we use to find a course of actions that will lead us to achieve our goals (Simon, 1993).
Even if usually, the semantic sense of the phrase non-rational is perceived as the opposite of the phrase rational, for the present situation we will consider that the antithetical phrases are rational and irrational (in the grammatical sense).
Since we know few things with respect to the human thinking mechanism, regarding the manner that tacit and explicit knowledge is mixed/combined within the humans’ activity, it exists a less known area referring to thinking, respectively the demarcation line/area between the conscious and unconscious. In our opinion, we may talk about a “mixture” between the diverse human skills, respectively experience, intuition, imagination, management of emotions and other skills. Throughout recurring to the stored experience, respective to knowledge, individuals establish objectives and solve the problems that interfere while reaching to them. How does it happen the appeal to intuition, imagination and management of emotions? How is being “excerpted” and processed the tacit/explicit knowledge from the whole experience in order to generate a new solution? To what extent do the “quantity” and the “quality” of thinking contribute in this kind of processes?
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By experience we understand a set of abilities/skills that a person accumulates while the formal and informal learning during time; we are talking about knowledge assimilated through practice, learning, observation etc. Therefore, the individual is being shaped by the biological DNA and the social DNA (family, school and social environment), which will equal a certain experience gathered in time, respectively a certain volume of explicit/implicit knowledge. As we perceive it, the experience constitutes/becomes the basic background/structure of mental stock that a person makes use of.
Intuition still remains a strictly human ability which is extremely little understood/ comprehended; philosophers argue that it is a non-discursive form of knowledge, namely a form of knowledge based on ration; it is not the opposite of ration but is distinct from ration. Intuition reflects the individuals’ capacity of identifying solutions into new frameworks/contexts that he/she is supposed to adapt to; but these solutions derive out from that person’s experience and manipulation of explicit/tacit knowledge. Intuition remains an attribute associated exclusively to the human mind, to a person; by antithesis with the human mind, no sophisticated/complex software which is based on AI techniques can intuit if it refers to new contexts. Referring to intuition, it is adequate to remark that there are awfully few works with respect to the role of intuition in management and/or efficient decision making. Synthesizing Khatri’s and Alvin’s opinion we will say that intuition is essential for strategic decisions; â€žintuition is not an irrational process; it is based on a deep understanding of the situation; it is a complex phenomenon that draws from the store of knowledge in our subconscious and is rooted in past experience; it is quick…” (Khatri/Alvin, 2000). Some authors describe intuition by using the term “supra-conscious”; it is used even in the process of scientific discovery and other similar activities; sometimes this ability is included in the phrase of talent. (Coffman/Molina, 2002).
By imagination we understand the human faculty/capacity to create new ideas based on knowledge accumulated in the past, respectively the capacity to learn by iteration; as a human skill, imagination is similar to intuition. We may say, to a certain extent, that a computer is able of “learning” by iteration (starting from the data/knowledge introduced into the database and from certain pre-established rules of learning); however it is little probable that a computer could recur to imagination while the chess game. Kaufmann says that imagination bases on a mechanism we still know very little about; it relays on the chaotic associating between ideas/knowledge, an association out of which sometimes comes up a new idea (Kaufmann, 1994).
In our point of view (accepting the influence of emotional intelligence in management), we consider that management of emotions is an ability comparable to intuition and/or imagination; this ability differs from one person to another, can be improved by managers and already has an explanation connected to the working mechanism of the brain. Recently discoveries in the field of neurobiology show that at the moment of taking decisions, under the influence of emotions, tonsil is being activated (Coffman/Molina, 2002). Finally, we may discuss even about more skills similar to intuition/imagination/emotion (we talk about issues as self-motivation, affect, mood, etc.). Put into graphical form, the components of what we called NRT are suggested in figure1; at the base of the NRT structure stays the experience based upon explicit/tacit knowledge combination/mixing; the other four elements of NRT combine in a non-structural manner for each person in turn.
Figure 1.Components of non-rational thinking (NRT)
Therefore, when undertaking various human activities (decision making, chess game, scientific discovery, etc.) individuals recur to intuition/imagination/emotions as strictly human skills, basing on experience and knowledge which they stored during time (Burciu, 2008). We don’t know precisely how these skills influence the “manufacturing”/producing of a new idea/solution; which would be the connection/relation between these skills and conscious/unconscious thinking of the person, we don’t know precisely. We believe that certain aspects of the human thinking mechanism belong to an area we may call quantitative thinking (the predominant side of the conscious where are being processed both the explicit knowledge and the explicit-tacit “mix”), while other aspects of the same mechanism create an area we may call qualitative thinking (the unconscious area where are being processed both tacit knowledge and the tacit-explicit “mix”).
5. Knowledge dynamics & structure of the mind
There is a multitude of approaches with respect to the classification of knowledge and its connection with the human mind working mechanism. As we previously showed, depending on the way knowledge is expressed, it divides into explicit knowledge and tacit knowledge (McInerney, 2002). Further more, the accumulation of both knowledge categories remains dependent on the directly experience of the individual (tacit knowledge) and, respectively, on formal learning (explicit knowledge); the processing of the two types of knowledge remains associated/linked to the conscious and unconscious levels of human thinking; in the following figure it is suggested the accumulation/processing of the two knowledge types (BrÄƒtianu, 2009; BrÄƒtianu/Andriessen, 2008).
Figure 2. The global structure of knowledge
Source: (BrÄƒtianu, 2009; BrÄƒtianu/Andriessen, 2008)
Explicit knowledge gathers in time into books/volumes, encyclopaedias, databases, inventions, innovations, both on a technical level as well as on a social level; they are extremely fluid, cannot be monopolised, they spread rapidly in organisations and society; they continuously change, evolve along with the accumulated human experience (McInerney, 2002).
Tacit knowledge is more difficult to quantify, manipulate and transferre as they predominantly “live” in the mind of the organisation’s members (in organisations exists tacit knowledge as know-how); however they too have a dynamic character; we are witnessing diverse types of conversion between explicit and tacit (tacit-tacit; tacit-explicit; explicit-tacit; explicit-explicit; BrÄƒtianu, 2009; BrÄƒtianu, Andriessen, 2008).
We do not know precisely how creative individuals recur to intuition/imagination in order to process different types of knowledge and to generate new ideas; according to Kaufmann, the human brain works within an entropy frame/range; to one of the border we find the thinking based on total order (the robot), to the other border we find the non-structured thinking (Kaufmann, 1994). As we perceive the localization of what we called NRT, by analogy to the knowledge structure proposed by BrÄƒtianu, we suggest in figure 3 another angle of approaching NRT (as a fuzzy, non-structured “mixture”, between conscious and unconscious thinking).
Figure 3. Localization of NRT between conscious and unconscious
In figure 3, we empirically suggest that the main part of the conscious may be called quantitative thinking area (meaning that this side is compelling, linear and relatively quantifiable; it processes the most of explicit knowledge and a variable â€žpiece” of tacit knowledge); a little “piece” of conscious and the whole unconscious could be called qualitative thinking area (meaning that this part is fuzzy, non-linear, flexible/volatile and very hard to quantify; it processes all tacit knowledge and a little “piece” of explicit knowledge).
The idea that intuition and/or imagination are abilities from beyond the rational/conscious it is not new; similarly, we know that the human mind and body are a unitary whole in the knowledge process. Through antithesis with the diverse types of intelligence to which we previously referred to (traditional, emotional, social, multiple etc.; Goleman, 1995; Gardner, 1993), maybe it is best to discuss about a single type of natural intelligence, namely the human intelligence. If this approach is being accepted, there may be formulated countless/many questions: Which is the relationship between the brains’ working and recur to intuition/imagination/emotions administration? In which “area/part” of the thinking mechanism we locate abilities as imagination or intuition? In other words, maybe it is preferable trying to better understand the demarcation line between conscious mind and unconscious mind, between the logical and extra-logical structures of thinking.
6. Applications of NRT on management
Formally we distinguish between logic rationing and intuition/imagination; this distinction can not be done though with maximal precision because the logic rationing is based on experience/knowledge, and during the mental processes tends to associate with intuition and imagination, and emotions etc. (Kaufmann, 1994). Consequently, the logical-rational structure of any efficient decision making process is “favourably marked” by a certain mixture of experience, intuition, imagination, emotions etc. (NRT). We believe that the image of this “mixture” of rational and non-rational (as thinking structures) will continue to be strongly influenced by the managers personality type and by other aspects which define the context he activates in (Burciu, 2008). We intuitively say that exists a multitude of n possible “mixtures” between rational and non-rational, inclusive for the same manager dealing with different decisional contexts.
Further, we will return to the steps of the decision making process, noticing the fact that in practice the six stages are being ranked from S1 to S6, as there is a natural and temporary restriction for the structure of any process of this kind. Especially within complicated/complex processes, when the applying of decision (S4) happens during a time range (weeks, months etc.) we may talk about a feed back between the final stage/step (S6) and any other of the previous stages/steps; the invoked idea is graphically represented in figure no 4.
Figure 4. Structure of decision making process
Within which stage of the decision making process does the manager’s recur/appeal to NRT happen? Are all the stages of the decision making process equally affected by NRT?
In our opinion, making the efficient decision in management implies the recur to group decisions; for making strategic decisions, the members of a management teamwork will always be more efficient comparing to a single person. First rule in making the efficient decision, says Drucker, is that it should be made throughout the conflict of opinions and not by consensus (Drucker, 1993). Secondly, we believe that adopting the efficient decision (step S4 from the previous figure) is strongly restricted by the way the manager defines the problem Pi and/or the objective Oi (step S1 from figure). In other words, efficient decisions solicit also un-orthodox questions, non-traditional approaches and/or the result of non-logical ways; to correctly formulate the question and to accept “unimaginable” solutions; these became nowadays restrictions of performance management (Drucker, 1997; Toffler, 1985).
As long as we accept the idea that efficient managers usually recur to intuition, imagination and management of emotions in order to obtain performance (respectively to NRT), we may say that especially steps S1 and S4 are stronger affected by NRT, comparatively to the other four steps. In other words, defining problem Pi and choosing an alternative from the n possible solutions, the manager is somehow “forced” to recur to all resources/instruments that the organisation offers him and to his own experience; in figure 5 we explain the manager’s recur to NRT in the two stages.
Figure 5. Use of NRT on decision making process
Therefore, any would be the recommendations formulated by theoreticians, the manager in the real economy frequently recurs, we believe, to non-rational thinking for the purpose to make efficient decisions. Managers always recur to logic thinking structures and extra-logic thinking structures, to conscious and subconscious, “mixing” explicit knowledge with tacit knowledge in order for the organisations they lead to preserve/maintain their competitive advantage. By analogy with the term bounded rationality, strongly argued by Herbert Simon, we may say that managers confront themselves with what we call double bounded rationality, respectively:
a first bounded rationality induced by constraints where, inevitably, the manager takes action within the organisation (organisational rules, costs, time, available information etc.) (Simon, 1972);
a second bounded rationality (SBR) induced by the managers’ thinking mechanism, respectively the native tendency to â€žmix” rational thinking and logical structures with non-rational thinking and extra-logical structures; this second bounded rationality represents also a type of â€žconstraint” that exerts upon the manager; it is comparable to the first type of constraint, but also differs, in the sense that it is simultaneously a “strong” and “week” point, depending on as how ample is the demarcation line between conscious and unconscious mind (essentially speaking, SBR and NRT are two phrases suggested to define the same reality that we perceive in the decisional practice, namely the top managers’ use of experience, intuition, imagination and management of emotions).
For improving the organisations efficiency, of objective reached by different management teams, Edward de Bono proposes the six hats method, lateral thinking etc. (de Bono, 1999); the main difficulty of thinking, he says, is confusion; emotions, information, logic, hope and creativity all crowd in on us (de Bono, 1999). There are other works that recommend methods of developing the emotional intelligence of employees in organisations, of improving management styles, group relationships, the company relationships with its clients etc. (Goleman, 2006; Mellers, 2001; Sevdalis, 2007). We do accept at all this kind of approaches, as they predominantly aim the improvement of abilities/competences that employees dispose of in an organisation. More simply said, employees training and development throughout various methods will anyway include, to various extents, also components of what we called non-rational thinking (NRT).
There is an obvious conditioning among three main aspects: description of effective decisions in manageme
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