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Intuitive decision making in banking and finance

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  • Hensman, Ann
  • Sadler-Smith, Eugene

Abstract

Summary Interest in the phenomenon of intuition in business and management has grown rapidly in recent years; however whilst there have been significant theoretical advances, empirical work has lagged somewhat. We studied the phenomenon of intuitive decision making in the banking and finance sector through the use of in-depth semi-structured interviews with experienced executives in a FTSE-100 bank. Participants' reliance on intuition was related not only to the nature of the task (e.g., factors of time and uncertainty) and individual factors (e.g., participants' experience and confidence), but also organizational contextual factors (e.g., constraints and conventions, accountability and hierarchy, team dynamics and organizational culture). Based on our findings we offer a conceptual framework, and a typology of intuitive and contextual 'signalling' which provide bases for practical recommendations and potential directions for future inquiry into this vital aspect of managerial cognition and decision making behaviour.

Suggested Citation

  • Hensman, Ann & Sadler-Smith, Eugene, 2011. "Intuitive decision making in banking and finance," European Management Journal, Elsevier, vol. 29(1), pages 51-66, February.
    • Handle: RePEc:eee:eurman:v:29:y:2011:i:1:p:51-66
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    Cited by:

    1. Sandar Win, 2018. "What are the possible future research directions for bank’s credit risk assessment research? A systematic review of literature," International Economics and Economic Policy, Springer, vol. 15(4), pages 743-759, October.
    2. Kroeger, Frens, 2015. "The development, escalation and collapse of system trust: From the financial crisis to society at large," European Management Journal, Elsevier, vol. 33(6), pages 431-437.
    3. Asli Elif Aydin, 2022. "Psychological and demographic factors influencing responsible credit card debt payment," Journal of Financial Services Marketing, Palgrave Macmillan, vol. 27(1), pages 17-26, March.
    4. Leonie Baldacchino & Deniz Ucbasaran & Laure Cabantous, 2023. "Linking Experience to Intuition and Cognitive Versatility in New Venture Ideation: A Dual‐Process Perspective," Journal of Management Studies, Wiley Blackwell, vol. 60(5), pages 1105-1146, July.
    5. Claudius Bachmann & Laura Sasse & Andre Habisch, 2018. "Applying the Practical Wisdom Lenses in Decision-Making: An Integrative Approach to Humanistic Management," Humanistic Management Journal, Springer, vol. 2(2), pages 125-150, February.
    6. Grant, Michael & Nilsson, Fredrik, 2020. "The production of strategic and financial rationales in capital investments: Judgments based on intuitive expertise," The British Accounting Review, Elsevier, vol. 52(3).
    7. Trönnberg, Carl-Christian & Hemlin, Sven, 2014. "Lending decision making in banks: A critical incident study of loan officers," European Management Journal, Elsevier, vol. 32(2), pages 362-372.
    8. Christian Julmi, 2019. "When rational decision-making becomes irrational: a critical assessment and re-conceptualization of intuition effectiveness," Business Research, Springer;German Academic Association for Business Research, vol. 12(1), pages 291-314, April.
    9. Volker Thoma & Elliott White & Asha Panigrahi & Vanessa Strowger & Irina Anderson, 2015. "Good Thinking or Gut Feeling? Cognitive Reflection and Intuition in Traders, Bankers and Financial Non-Experts," PLOS ONE, Public Library of Science, vol. 10(4), pages 1-17, April.
    10. Coget, Jean-Francois & Haag, Christophe & Gibson, Donald E., 2011. "Anger and fear in decision-making: The case of film directors on set," European Management Journal, Elsevier, vol. 29(6), pages 476-490.
    11. Nora Meziani & Laure Cabantous, 2020. "Acting Intuition into Sense: How Film Crews Make Sense with Embodied Ways of Knowing," Journal of Management Studies, Wiley Blackwell, vol. 57(7), pages 1384-1419, November.
    12. Mwinlaaru, Peter Yeltulme & Ofori, Isaac Kwesi & Adiyiah, Kwadwo Agyeman & Idun, Anthony Adu-Asare, 2016. "Non-Performing Loans and Universal Bank’s Profitability," MPRA Paper 82902, University Library of Munich, Germany.

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    Keywords

    Decision making Finance Intuition;

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