Unfolding irrationality: how do meaningful coincidences influence management decisions?

Abstract

Purpose This study aims to answer the following research question: “How do meaningful coincidences influence management decisions?” This question has gained relevance mainly because of the increasing attention of scholars in explaining the irrational pressures that shape management decisions, which should be inevitably taken into account to discover the causative factors of firms’ performances. Design/methodology/approach A multiparadigm approach to theory building has been adopted, known as “metatriangulation.” This study consisted of exploring the interplay between the synchronicity concept of Jung and cognitive studies. As a result, this work proposes a conceptual framework that refers to both sensemaking and cognitive decision-making literature. Findings The framework proposes that the perceived certainty (or not) about the potential outcome for the well-being, coming from the occurrence of meaningful coincidences, elicits a set of positive (or negative) affective states. These states activate a series of cognitive errors that drive the assignment of a symbolic content to the coincidences, bringing different risk-oriented management decisions. Research limitations/implications The provided model is purely conceptual and based on the current pool of knowledge available. As much as empirical evidence will be produced, this model may need revision. This framework proposes the interpretation of meaningful coincidences not only as the output of a number of information processing biases, but also as inputs, through the elicited affect heuristic, for the occurrence of other cognitive errors that drive management decisions. Practical implications The explained influence of irrational forces on management decisions, also considering luck and chance, can be fruitful to avoid these behaviors or to intentionally adopt them in selected cases, e.g. when looking for attractive unexploited opportunities within markets. Originality/value To the best of the author’s knowledge, this is the first work that attempts to unveil the impact of meaningful coincidences and, more in general, of irrational forces on management decisions. Moreover, the provided framework explains how superstitious events are sometimes looked for to guide decision-making.

Affect and Cognition in Managerial Decision Making: A Systematic Literature Review of Neuroscience Evidence

“…A fundamental distinction, mainly discussed in literature with reference to System 1 and System 2, is between a parallel-competitive and a default-interventionist approach ( Evans, 2021 ). In this last regard, from the analysis of the sample contributions described above, it can be derived that the managerial decisions result as the product of an emotional-driven dialectic of affect and cognition (e.g., Damasio, 1994 ; Sadler-Smith, 2016 ; Abatecola et al, 2018 ; Cristofaro, 2020a , b , 2021a , b ), redirecting the discussion on information processing from dual-mind processing theories (e.g., Stanovich and West, 2000 ; Hodgkinson and Sadler-Smith, 2018 ) to a “unified” mind processing theory ( Sadler-Smith, 2016 ) for which the two systems of our mind are not in conflict and for which affective states have an initial (but not exclusive) primary driving role. As a consequence, the recent affect-cognitive interplay emerges, under a neuroscientific point of view, as supported, and may be considered as the fertile ground from which a renewed understanding of managerial decision making can move forward – also because its explanations are intertwined with other relevant streams of research such as the Upper Echelons Theory ( Hambrick and Mason, 1984 ; Abatecola and Cristofaro, 2020 ) and Behavioral Strategy ( Powell et al, 2011 ; Sibony et al, 2017 ; Abatecola et al, 2021 ; Cristofaro and Giannetti, 2021 ).…”

“…In this last vein, Cristofaro’s (2019 ; 2020a , b ; 2021a , b ; Cristofaro and Giannetti, 2021) recent and in-depth contributions rooted in BDT enriched the debate by discussing the role of affect in management decisions, also proposing an Affect Cognitive Theory to explain how decision-making processes occur by considering the interplay between affective states and cognition. Hence, this new theory proposes that the crucial circumstances in which emotional states influence/are influenced by cognition and its biases identify that decision makers are affected by multi-level variation of both physical and social scenarios.…”

“…This is aligned with brain studies that point toward a driving role of affective states, since they come from the biochemical response of individuals to their context. In this regard, seeing the relationship between System 1 and System 2 in managerial decision making as parallel, reorients the discussion on information processing from the tradition of sequential dual-mind processing to a “unified” mind processing theory for which the two Systems are not in contrast and for which affective states have an initial (but not exclusive) primary driving role (e.g., Damasio, 1994 ; Cristofaro, 2020a , b ).…”

Under Pressure: Time Management, Self-Leadership, and the Nurse Manager

“…Our proposed model mitigates the time pressure nurse managers face based on three areas of research: psychosocial care, time management, and self-leadership. Based on the conceptual methodology of metatriangulation (Lewis and Grimes 1999;Saunders et al 2003;Cristofaro, Matteo 2020. Unfolding Irrationality: How do Meaningful Coincidences Influence Management Decisions?…”

Shock determination in a two‐stage decision‐making model: The case of COVID‐19 in Colombia

“…Since Simon ( 1947 ) introduction of the bounded rationality concept, behavioral economists (Kahneman & Frederick, 1979 ; Kahneman & Tversky, 1972 ; among others) started to investigate and demonstrate that sometimes agents do not make rational decisions as stated by traditional microeconomic models (Alchian, 1950 ; Ariely, 2010a , 2010b ; Armstrong et al, 2020 ; Bauer & Capron, 2019 ; Cristofaro, 2020 ; Denes‐Raj & Epstein, 1994 ; Simon, 1959 ), in the sense that some of their decisions respond to an addictive/habit‐forming behavior (Laibson, 2001 ), relate to time and risk preferences (Soofi et al, 2020 ) and/or respond to searching costs (Baumol & Quandt, 1964 ). These developments suggest that decision‐making does not derive from a single entity, but from a complex system of entities (Brocas & Carrillo, 2014 ), giving, thus, relevance to the initial experiments carried out by Schneider and Shiffrin ( 1977a , 1977b ) who proposed the dual decision theory whose foundations lay on what has been called in Psychology dual decision models (Brocas & Carrillo, 2014 ).…”