Analyzing fixed-event forecast revisions

It is common practice to evaluate fixed-event forecast revisions in macroeconomics by regressing current forecast revisions on one-period lagged forecast revisions. Under weak-form (forecast) efficiency, the correlation between the current and one-period lagged revisions should be zero. The empirical findings in the literature suggest that this null hypothesis of zero correlation is rejected frequently, and the correlation can be either positive (which is widely interpreted in the literature as “smoothing”) or negative (which is widely interpreted as “over-reacting”). We propose a methodology for interpreting such non-zero correlations in a straightforward and clear manner. Our approach is based on the assumption that numerical forecasts can be decomposed into both an econometric model and random expert intuition. We show that the interpretation of the sign of the correlation between the current and one-period lagged revisions depends on the process governing intuition, and the current and lagged correlations between intuition and news (or shocks to the numerical forecasts). It follows that the estimated non-zero correlation cannot be given a direct interpretation in terms of either smoothing or over-reaction.     

Segmentation: Identification, intuition, and implementation

This paper concerns the implementation of segmentation within a business-to-business organisation. There is wide agreement that segmentation is a fundamental component of marketing strategy. Numerous methods are identified, but there is little guidance on how segmentation can be applied in practice. Four barriers to implementation are identified. The notion of intuition has been applied in the segmentation of emerging markets for technologically based products. This work is extended into established markets using an inductive methodology and adopts an action learning approach to incorporate managerial experience into the process, illustrated by a case study. Several opportunities for further research arise.     

Institutional life of intuitive insights: Legitimacy of virtuoso intuitive marketing management

Intuitive insights have been recognized as an integral part of marketing and managerial proficiency. In this article, we expand upon this understanding by theorizing the institutional dimension of intuitive expertise. By developing a theoretical framework with supportive propositions we maintain that for intuitive managerial expertise to be effective it requires legitimization in its inter-organizational contexts. Intuitive insights hence have a significant institutional and social existence, irreducible to cognition. This means that institutional logic may support or contradict efficient cognitive strategies, significantly influencing the performance of marketing management. Managerial implications follow to the fields of marketing management and intuitive decision-making.     

以直觉法与还原法的结合运用改进层次分析法

在分析了两种完全不同的思维方式直觉法与还原法各自特点的基础上,本文认为很有必要将直觉法AHP与还原法AHP结合运用以改进层次分析法,并提出了具体的操作方法。     

Rational and intuitive decision-making in sourcing teams: Effects on decision outcomes

According to dual process theory, individual decision-making can be based on rational procedures and experience-based intuition, and the decision-making approach can influence decision outcomes. We investigate how the application of rational procedures and experience-based intuition affects the outcomes of supplier selection decisions taken by cross-functional sourcing teams. Specifically, we examine whether the selected supplier׳s cost and quality/delivery/innovativeness performance is higher when more team members use a highly rational and/or a highly experience-based decision-making approach. From data on 54 teams, we find that the use of rational procedures enhances cost performance. Conversely, when sourcing team members use their experience-based intuition, the decision is more likely to result in satisfactory supplier performance along all tested performance dimensions.     

Cross-national differences in cognitive style: implications for management

An important obstacle to productive working relationships between managers from different countries may be cross-cultural variations in cognitive style. This study examined the traditional dichotomy between the 'intuitive' East and the rational or 'analytic' West. A total of 394 managers from six nations and 360 management students from five nations completed the Cognitive Style Index, a self-report measure of the intuitive-analytic dimension. Reliability coefficients suggested that the properties of the instrument are broadly consistent across cultures. Comparison of mean scores showed that the most intuitive groups were located in the Anglo, North European and European Latin slices of Hickson and Pugh's 'culture cake', and the most analytic were in the Developing Countries and Arab categories. On the basis of these findings, it is argued that it may be more fruitful to classify nations in terms of their stage of industrial development rather than the hemisphere in which they are located. Ways of overcoming difficulties in encounters between managers from different cultures may include training in how to identify, respond to and change cognitive styles, and the selection of individuals or management teams whose styles are compatible with those of their foreign counterparts.     

The production of strategic and financial rationales in capital investments: Judgments based on intuitive expertise

This paper's aim is to examine how strategic and financial rationales are produced in strategic capital investments. Informed by literature on capital investments, strategic fit, and intuitive expertise, the study examines the production of strategic and financial rationales and how they are related. This is done by conducting a detailed case study of how these rationales are described in decision documents and how the documents were produced. The setting is an acquisition by a large, successful serial acquirer.The analysis reveals how the production of strategic and financial rationales is based on judgments of a myriad of data using rough estimates. We argue that these judgments are made through an intuitive process based on expertise. The study contributes to the literature by surfacing individuals' intuitive expertise as an important ‘hidden’ activity of judgment in strategic investment decision-making. Thus, the study shows, and brings theoretical underpinnings, to how the presence of expertise and the character of the tasks can result in appropriate intuitive judgments positively affecting strategic investment decision-making.     

The mediating role of speed in the global sourcing decision process

The principal aim of this study is to provide theory and testing to elucidate the role of decision-maker's decision process and speed during the global sourcing decision-making process (GSDP). In order to achieve this goal, we examine the behavior of a sample of 202 decision-makers belonging to Italian SMEs in the manufacturing sector. Our main finding suggests that faster decisions during the GSDP process lead to superior financial and non-financial performance of the selected supplier. Moreover, we find support for dual processing theory wherein rationality and intuition of the GSDP are associated with increased supplier performance both directly and through their effects on decision speed. Results are discussed in terms of the GSDP, SME and strategic decision-making literatures and practical implications for managers in SMEs.     

Whatever happened to “The Technology of Foolishness”? Does it have any potential today?

In 1971, the organization theorist James March published "The Technology of Foolishness" (ToF). The essay can be seen as inspired by ideas of the late 1960s in California. ToF argues that wise decision making should not only focus on pursuing given goals, as is often done, but also on finding new and better goals. The present study traces the reception of ToF in the scholarly literature. It has been much praised, but little used relative to other of March's contributions. The reception has often been superficial and ritual and March's harsher ideas have to some degree been sugarcoated. ToF has inspired work regarding playfulness, improvisation, hypocrisy and not least entrepreneurship. But there is unused potential in ToF. This potential is discussed in the next to final Section of this article. One is called intelligent holes in stupid organizations and concerns how to maintain or achieve free thinking in organizations and society. Another one regards hypocrisy – how to handle and use truth and lies in and around modern organizations and political systems.