In such a complex and well-researched domain as decision support systems (DSS), with a long history of authors making insightful contributions since the 1960’s, it is critical for researchers, especially those less experienced, to have a broad knowledge of the seminal work that has been carried out by prior generations of researchers. This can serve to avoid proposing research questions which have been considered many times before, without having consideration for the answers which have been put forward by previous scholars, thereby reinventing the wheel or “rediscovering” findings about the life of organizations that have been presented long before. The study of human and managerial decision-making is also characterized by considerable depth and seminal research going back to the beginning of the 20th century, across a variety of fields of research including psychology, social psychology, sociology or indeed operations research. Inasmuch as decision-making and decision support are inextricably linked, it is essential for researchers in DSS to be very familiar with both stream of research in their full diversity so they are able to understand both what activity is being supported and how to analyze requirements for developing decision support artefacts. In addition, whilst the area of decision support has sometimes been characterized by technology-based hype, it is critical to recognize that only a clear focus on the thinking and actions of managers can provide decisive directions for research on their decision support needs. In this article, we consider first the characteristics of human cognition, before concentrating on the decision-making needs of managers and the lessons that can be derived for the development of DSS.
An extensive literature has accumulated during the past three quarters of a century on the topic of intuition in management. The beginnings of management intuition scholarship are to be found in Chester Barnard’s insightful speculations on the role and significance of logical and non-logical processes in managerial work. Barnard’s thinking impacted profoundly Herbert Simon’s foundational concept of bounded rationality, which shed much needed light on how managerial decision-making is accomplished in real-world settings by using intuition as well as analysis. In parallel, management researchers in common with scholars in a wide range of applied fields also drew on Daniel Kahneman, Amos Tversky, and colleagues’ seminal behavioral decision research and its focus on the systematic errors and biases that accrue in managers’ intuitive judgments as the result of the use of heuristics (e.g., representativeness, availability, anchoring and adjustment, and affect heuristics). In recent years management researchers have drawn on further insights from Klein and colleagues’ work in naturalistic decision-making (NDM) (e.g., the “recognition primed decision-making model,” RPD) to conceptualize managerial work as expert performance and in understanding expert-versus-novice differences using the “skill acquisition model” (SAM). In recent years managerial intuition research has alighted on the dual-process theories of Epstein, Evans, Stanovich, and others as a conceptual foundation for further theorizing and research in terms of System 1 (also referred to as Type 1) and System 2 (Type 2) processing. More recently still, research in neurology (e.g., the “somatic marker hypothesis”) and social cognitive neuroscience (e.g., the specification of complementary “reflexive (X)” and “reflective (C)” systems) has mapped the physiological and neural correlates of intuitive processing and begun to inform not only intuition research but decision research more widely in management and organization studies. These various developments have shed light on how intuitive decision-making is accomplished in managerial work across diverse management subfields including entrepreneurship, business ethics, human resources, and strategic management. More recently, scholars are turning to paradox theory and process philosophy as alternative ways of viewing the phenomenon of intuition in organizations.
Steven A. Stewart and Allen C. Amason
Since the earliest days of strategic management research, scholars have sought to measure and model the effects of top managers on organizational performance. A watershed moment in this effort came with the 1984 introduction of Hambrick and Mason’s upper echelon view and their contention that firms are a reflection of their top management teams (TMT). An explosion of research followed and hundreds, if not thousands, of manuscripts have since been published on the subject. While a number of excellent reviews of this extensive literature exist, a relative few have asked questions about the overall state and future of the field. We undertook this assessment in an effort to answer some key questions. Are we still making progress on the big questions that gave rise to the upper echelon view, or have we reached a point of diminishing returns with this stream of research? If we are at an inflection point, what are the issues that should drive future inquiry about top management teams?
Bill Wooldridge and Birton Cowden
Scholarly interest in how managers make strategic decisions dates from the inception of the strategic management field and continues in the present. Although such decision-making was originally conceived as a completely rational, top-management process, contemporary thinking recognizes that strategies from across multiple organizational levels change within social and political contexts. Within this broad domain, multiple research streams address a wide variety of topics and issues. Prominent among these are, (1) the extent to which strategic decisions are formed through comprehensive analysis versus piecemeal decision-making, (2) how characteristics of top managers and the composition of top management teams affect strategic decision-making, (3) the role of politics, conflict, and consensus in strategy making, (4) how cognitive biases and heuristics influence the process, (5) when and how intuitive judgments can form the basis for effective decision-making, and (6) how managers at various organizational levels participate in the process. Research across these streams is both descriptive and normative, with a focus on contextual contingencies and relationships to firm performance. Taken as a whole this literature has significantly enhanced understanding of how strategies form within organizations. Contemporary work continues to provide new insights and demonstrates the continued value of this productive area of study.
Vinícius Chagas Brasil and J.P. Eggers
In competitive strategy, firms manage two primary (non-financial) portfolios—the product portfolio and the innovation portfolio. Portfolio management involves resource allocation to balance the important tradeoff of risk reduction and upside maximization, with important decisions around the evaluation, prioritization and selection of products and innovation projects. These two portfolios are interdependent in ways that create reinforcing dynamics—the innovation portfolio is the array of potential future products, while the product portfolio both informs innovation strategy and provides inputs to future innovation efforts. Additionally, portfolio management processes operate at two levels, which is reflected in the literature's structure. The first is a micro lens which focuses on management frameworks to boost portfolio performance and success through project-level selection tools. This research has its roots in financial portfolio management, relates closely to research on new product development and marketing product management, and explores the effects of portfolio management decisions on other organizational functions (e.g., operations). The second lens is a macro lens on portfolio management research, which considers the portfolio as a whole and integrates key organizational and competitive concepts such as entry timing, portfolio management resource allocation regimes (e.g., real options reasoning), organizational experience, and the culling of products and projects. This literature aims to set portfolio management as higher level organizational decision-making capability that embodies the growth strategy of the organization. The organizational ability to manage both the product and innovation portfolios connects portfolio management to key strategic organizational capabilities, including ambidexterity and dynamic capabilities, and operationalizes strategic flexibility. We therefore view portfolio management as a source of competitive advantage that supports organizational renewal.