The role of intuition in CEO acquisition decisions

Abstract

Based on dual-process theory, our research aims to address the relatively under-researched question “what is the role of intuition in managerial decision making?”, and we do so in the context of CEO acquisition decisions. While intuition may be commonly used by managers, there is limited empirical research on the role of intuition in strategic acquisition decisions. The contribution of this paper is in empirically developing a framework that analyses the roles of intuition from the perspective of CEOs’ lived experience, via systematic qualitative analysis. Using an inductive approach and retrospective reports, we focus on how CEOs use intuition in real-life strategic decisions. The results show that CEOs and top management team make sense and respond to their important strategic decisions using both intuition and analytical information adaptively and constructively to complete their decisions. More specifically, our framework reveals five roles of intuition: synthesizing, estimating, scanning, confirming and energizing. These roles cover both cognitive and affective elements of decision-making that are both abstract and concrete in nature. One corresponding novel contribution from this research is identifying the energizing role intuition plays. Further, we conduct three validation checks to establish the robustness of our findings and where we uncover the relative importance of the various roles of intuition. Finally, we note that although some of the roles of intuition have been identified in isolation in previous work, our study is the first one to adopt a holistic perspective.