Rational and irrational aspects of decision-making by business executives (CEOs) in various cultural environment
2014
Lasmane, A., University College of Economics and Culture, Riga (Latvia) | Briksnis, I., Vispool, Ltd., ''Rožlejas'', Olaine parish, Olaine municipality (Latvia)
As shown by the financial crises experienced in the 20th and 21st centuries, in situations with a high degree of uncertainty CEOs often make inexact decisions. For this reason, scientists discuss CEOs decision-making processes by emphasising the important role of business intuition and simultaneously asking the question about how correct such intuitively taken decision can be. As identified in studies, the practice confirms the importance of intuition in decision-making in business. The methodology applied by the authors in the study is based on Daniel Kahneman’s concept of bounded rationality in decision-making in certain conditions and studies conducted into intuition, insight and creativity of CEOs in business in the last few years (2007 – 2012). The aim of the study was: to investigate the relations between the decision-making process and cultural environment, rational and irrational aspects of CEOs decisions, and to develop recommendations for sustained development of enterprises business. Results of a interviews and survey on the decision-making process in business, which included CEOs (n=77) from various countries (Latvia, Estonia, Russia, Italy, Brazil, Czech Republic), are presented to show the benefits and restrictions of rationally and irrationally carried decisions. The results reveal the role of precise intuition and impact of cultural environment in decision-making and sustained business development.
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