The passage provides support for which of the following statements?

Managers who rely on intuition are more successful than those who rely on formal decision analysis

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Managers cannot justify their intuitive decisions

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Logical analysis of a problem increases the number of possible solutions.

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Intuition enables managers to employ their practical experience more efficiently

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Solution

The correct option is D Intuition enables managers to employ their practical experience more efficiently
D is the best answer. The question requires you to identify a statement that can be inferred from information in the passage but is not explicitly stated. The author asserts that intuitive managers can “move rapidly to engender a plausible solution” (lines 53-54) and that their intuition is based on “experience that builds skill” (line 37). This implies that the combination of skill and rapidity enables mangers to employ their practical experience more efficiently, as this choice states.

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Q. The majority of successful senior managers do not closely follow the classical rational model of first clarifying goals, assessing the problem, formulating options, estimating likelihoods of success, making a decision, and only then taking action to implement the decision. Rather, in their day-by-day tactical manoeuvres, these senior executives rely on what is vaguely termed “intuition” to manage a network of interrelated problems that require them to deal with ambiguity, inconsistency, novelty, and surprise; and to integrate action into the process of thinking.
Generations of writers on management have recognized that some practicing managers rely heavily on intuition. In general, however, such writers display a poor grasp of what intuition is. Some see it as the opposite of rationality; others view it as an excuse for capriciousness.
Isenberg’s recent research on the cognitive processes of senior managers reveals that managers’ intuition is neither of these. Rather, senior managers use intuition in at least five distinct ways. First, they intuitively sense when a problem exists. Second, managers rely on intuition to perform well-learned behaviour patterns rapidly. This intuition is not arbitrary or irrational, but is based on years of painstaking practice and hands-on experience that build skills. A third function of intuition is to synthesize isolated bits of data and practice into an integrated picture, often in an “Aha!” experience. Fourth, some managers use intuition as a check on the results of more rational analysis. Most senior executives are familiar with the formal decision analysis models and tools, and those who use such systematic methods for reaching decisions are occasionally leery of solutions suggested by these methods, which run counter to their sense of the correct course of action. Finally, managers can use intuition to bypass in-depth analysis and move rapidly to engender a plausible solution. Used in this way, intuition is an almost instantaneous cognitive process in which a manager recognizes familiar patterns. One of the implications of the intuitive style of executive management is that “thinking” is inseparable from acting. Since managers often “know” what is right before they can analyse and explain it, they frequently act first and explain later. Analysis is inextricably tied to action in thinking/acting cycles, in which managers develop thoughts about their companies and organizations not by analysing a problematic situation and then acting, but by acting and analysing in close concert. Given the great uncertainty of many of the management issues that they face, senior managers often instigate a course of action simply to learn more about an issue. They then use the results of the action to develop a more complete understanding of the issue. One Implication of thinking/acting cycles is that action is often part of defining the problem, not just of implementing the solution.
Q. The passage provides support for which of the following statements?

Q. It can be inferred from the passage that which of the following would most probably be one major difference in behavior between Manager X, who uses intuition to reach decisions, and Manager Y, who uses only formal decision analysis?

Q. Traditionally, decision-making by managers that is reasoned and step-by-step has been considered preferable to intuitive decision-making. However, a recent study found that top managers used intuition significantly more than did most middle or lower-level managers. This confirms the alternative view that intuition is actually more effective than careful, methodical reasoning. The conclusion above is based on which of the following assumptions?

Q. According to the passage, senior managers use intuition in all of the following ways EXCEPT to:

A. When bids for an item are based on estimates of the item's value, the winner is the bidder who overestimates this value the most.

B. Intuitively, most people bid more aggressively when faced with more bidders, but more aggressive bidding increases the chances that a bidder will fall victim to the winner's curse.

C. The mathematical explanation for the winner's curse, first observed in bidding for oil fields, reveals the subtle intricacies of this apparently simple game.

D. The classroom experiment demonstrating the winner's curse illustrates the complex relationship between game theory, human intuition, and optimal decision making.

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