Modern Management: concepts and skills, 14/e

Decision Making and Intuition

As already discussed, the rational decision-making process includes a sequence of five steps. We also noted, however, that researchers have highlighted the potential influence of bounded rationality on this process. More recent research has suggested that individuals may also rely on additional processes when making decisions. In fact, Stanovich and West suggest that individuals use two different processes when making decisions.²⁸ According to their framework, the rational decision-making process discussed in the previous section is known as “System 2.”

Complementing this formal system of decision making, Stanovich and West suggest that individuals also rely on a less formal process based on intuition to make decisions; ...