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Many of today's successful entrepreneurs attribute their success to their intuition, Bill Gates says, "you cannot ignore your intuition." Oprah states, "My business skills have come from being guided by my intuition", and Donald Trump admits in his book, "I've built a multibillion dollar empire by relying on my gut instinct".
Intuition has been described as an holistic approach to decision making. Emotionality has become a significant issue for research scholars. Managers' and entrepreneurs' decision-making is affected by how they feel about particular situations. Entrepreneurs in particular operate in highly dynamic environments, and this type of environment can be very challenging.Furthermore, emotions and feelings have been shown to exert a strong effect on creativity the si-ne qua non of entrepreneurship.
As shown in the figure continuum of marketing and research sophistication has intuition centred decision making as its major constituent.
Risk taking was found to be an important element of intuitive decision-making. There is a number of reasons why this is so. In order to appreciate the risk-taking propensity the following factors should be considered. Risk is a multi-dimensional construct which includes: (a) potential losses; (b) the significance of those losses; and (c) the uncertainty of those losses. Being a risk taker implies that researchers are likely to be action orientated because in the process of making decisions they must take action, which will expose them to risk. A researcher said, 'you cannot study every single part of everything, otherwise you'll never make a decision and never be successful in attaining plausible results'. When outcomes are difficult to predict through rational means and researchers need to make a decision, they respond in a pragmatic way by utilizing their intuitive judgment and making a decision.
A validated survey instrument, the Cognitive Style Index (CSI) is used to determine the cognitive style, intuitive or analytic approach to decision making. Cognitive Style Index (CSI) instrument is used because it is an easy to use, self-assessment tool that isn't too time consuming or cumbersome and don't require trained individuals for coding. The CSI is a self-report questionnaire, which consists of 38 questions. The aim of those questions is to ascertain whether a respondent's cognitive style is either analytical or intuitive. The instrument is designed such that a person who is analytical is most likely to achieve a high score - maximum of 76. A person who is inclined to use both intuitive and rational decisionmaking would achieve a score of 38 (midway), whilst an individual with an intuitive decision making propensity would score less than 38.
The only element not measured by the CSI was whether or not the decision-maker was influenced by feelings towards a decision ie, if the decision "felt right or wrong". This should be taken care of during the interview process.
Future decision based on past experience:
Major efforts and progress have been made in market research to gather and analyze empirical data as a basis for understanding market phenomena and more appropriate marketing decisions. Market research is an essential part of marketing activity; it is unrealistic to assume that complete empirical data will be made available for most marketing decisions. Such decisions are based at least partially on managerial judgement stemming from previous experience and supplemented by marketing research data in areas where empirical information is perceived to be crucial. A variety of reasons may explain this lack of complete availability of research data like time, pressure, cost or methodological difficulties in obtaining the desired data. Even when market research data is obtained the decision to acquire these data is the result of managerial judgement based on past experience and the potential contribution of data to decision making relative to its cost.
Planners apply qualitative forecasting methods when they want judgemental or subjective indicators. Qualitative forecasting methodology include the jury of executive opinion, Delphi technique, sales force composite and survey of buyer intentions.
Earlier, a customer's decision to continue a service relationship is traditionally conceptualized as a function of the integration of customers' current and past levels of utility from a given service experience. Strong empirical support is found for the hypothesis that expectations of high future use positively affect retention, over and above the effects of satisfaction. The results provide new insights into the antecedents of customers' perceptions of expected future usage. Customers appear to update their expectations of future use following an adaptive expectations approach. Consumers who are asked to anticipate regret associated with mistakenly discontinuing a service relationship are less likely to drop than those who are not asked to anticipate regret. Taken together, the empirical findings supports that customer's future decision is very much based on his/her past experience.
People feel regret in accordance with how the decision was made; regret may be dependent on the number of options that were available during the decision making process; and how varied the options were may impact how regret is experienced after the decision was made. A series of experiments concluded that people feel remorse because they feel they were able to make a better choice by looking at more information, previously disregarded, and carefully weighing the pros and cons of each choice. In addition, regret is magnified when individuals revisit the other available options and considering what satisfaction the other option would have brought them. Interestingly, people who are dissatisfied with their decision feel obligated to embrace the decision, as a means to reducing anxiety regarding the quality of the decision as an example, when a job applicant does not get hired, he may restructure the experience, and find many reasons that explain why he did not want to work for the company. Thus, future decision making is based on past decisions, as well as levels of satisfaction or regret.
Even though there is evidence to support this notion, in many cases, particularly when the decision may be reversed, decisions may be based on the reversibility factor. Significant to individuals' satisfaction is that people are willing to pay a premium for the opportunity to change their minds at a later date. For example, catalogue shoppers purchase items in a two step process; first they decide to purchase the items, then once the items arrive, they decide if they will keep them.
Cross functional teams:
Cross-functional teams are made up of people from different functional areas within a company like marketing, engineering, finance, and human resources. These teams take many forms, but they are most often set up as working groups that are designed to make decisions at a lower level than is normal in the given company. They can be either a company's main form of organizational structure, or they can exist in addition to the company's primary hierarchical structure.
Cross-functional teams have increased in importance in recent years for three major reasons: they improve coordination and integration, span organizational boundaries, and reduce the production cycle time in new product development. Bringing people together from different disciplines can improve problem solving and lead to more thorough decision making. The teams foster a spirit of cooperation that can make it easier to achieve customer satisfaction and corporate goals.
Cross-functional teams differ in several important ways from older work teams:
Firstly, they are usually composed of members who have competing loyalties and obligations to their primary subunit within the company (for example, a marketing person serving on a cross-functional team has strong ties to his home department that may conflict with the role he is being asked to play on the Cross Functional Team).
Secondly, in companies where CFTs are being used on a part-time basis as opposed to a permanent organizational structure, there are often temporary groups organized for one important purpose, which means group members are often under considerable pressure. On these temporary teams, the early development of stable and effective group interaction is essential. Finally, CFTs are often held to higher performance standards than conventional teams. Not only they are expected to perform a task or produce a product, but they are also expected to reduce cycle time, create knowledge about the process, and disseminate that knowledge throughout the organization.
For cross-functional teams to succeed, several factors are imperative:
Members must be open-minded and highly motivated.
Members must be from the correct functional areas.
A strong team leader with excellent communication skills and a position of authority is necessary.
The team must have both the authority and the accountability to accomplish the mission given.
Management must provide adequate resources and support, both moral and financial.
Sufficient communications must exist.
CROSS-FUNCTIONAL TEAMS AND NEW PRODUCT DEVELOPMENT
Many businesses have been using cross-functional teams to reduce the cycle time in new product development. As a result, CFTs have become a common tool in new product development at many companies. CFTs have shown the flexibility to adapt to changing market needs and the ability to more quickly develop innovative products.
In the past, new product development invariably meant gathering data sequentially from a number of departments before a new product was given the green signal. First, the idea would be conceptualized. Then, it would be passed on to the marketing research department, which would conduct market research to see if the product is feasible. The product might then be passed on to the sales department, which would be asked to create a feasible sales estimate. From there, the idea would move on to engineering or manufacturing, which would determine the costs to produce the product. Finally, with all these numbers gathered over the course of months, or even years, the product would move to an executive committee which would either approve or reject the project. By that time, market conditions would have shifted sufficiently to render the product obsolete.
In th CFT approach a member of each of the functional areas would have a representative on the new product team. Team members would learn of the new product at the same time and would begin working on estimates together. If part of the product could not be manufactured cheaply enough, the team member from that area could immediately sit down with the engineering representative and come up with a new production method. The two of them could then meet with the marketing and sales team members and discuss new ways to position the product on the market. The result, is a vastly improved product that is manufactured and released to the market in far less time than was achieved using traditional methods.
DRAWBACKS TO CROSS-FUNCTIONAL TEAMS
Cross-functional teams have become an integral part of the market research in many industries in recent years. But observers point out that their use can have unintended drawbacks if companies are not watchful.
For example, analysts note that CFTs can actually hamper the professional growth of team members because they have a narrow focus on one area. Some companies try to allocate projects to CFTs that are simply too large in scope and are essentially doomed to failure from the start. Such large projects lack the focus needed for Cross Functional Team success, and trying to make such a project work in that environment can sour an entire organization on using CFTs for other projects. Another sure pitfall is to establish a CFT without imposing either project deadlines or at least interim reporting deadlines. Without a sense of urgency to complete a project, the project will almost certainly fail.