How CEOs Can Harness Intuitive and Deliberate Thinking to Lead towards Realistic Growth ?
Stress and Anxiety influence in different ways.
Stress does not influence risk-taking factors at all. Interestingly, stress and anxiety had opposite impacts on how individuals view risks in social situations.
Stress increases the perceived risk in social interactions, whereas anxiety lowers it. Even though anxiety affects risk evaluations related to negative outcomes in social contexts, stress does not give the same effect.
The choice of a strategy relies on its overall reliability, (which is affected by the ventral striatum and nucleus accumbens, among various options represented by the dorsal striatum and nucleus caudate).
When a reliable strategy is not available, a new task-set is formed because decision-making is binary when confronted with ambiguous stimuli / situations . In stressful situations that create uncertainty, the decision-making process depends on the expected benefits of different options (linked to specific brain regions like the ventral striatum, nucleus accumbens, and ventral putamen, which are involved in cognitive control).
The objective is to optimize these choices.
Both stress and anxiety should be tracked to enhance entrepreneurs’ risk-taking behavior. People who are fearful often have an inflated view of negative results and expect bad outcomes from certain situations, making them hesitant to take risks. On the other hand, individuals with low social anxiety, no matter the social signals around them, are more likely to take risks, leading to greater financial rewards.
Even though making intentional choices is important, there is proof that reasoning or thinking doesn’t always improve decision quality. When dealing with a complicated choice that involves detailed information like inflation, compound interest, and disintermediation, depending only on knowledge and careful thought does not lead to the best decisions.
People who have a stronger tendency for deliberative thinking show improved decision-making skills, because poor intuitive judgments arise from incomplete intuitive processes and a lack of thorough analysis that fails to correct these intuitive errors in standard thinking.
When irrelevant or overly complex information is analyzed carefully, the decision made may show more bias. Experiments have shown that intuitive strategies can do better than analytical ones in integrating values, which is key in complex decision-making.
These findings support the idea that intuitive thinking might be more effective in some complex decision-making situations. Considering the difficulties of complex information and the possible lack of formal financial knowledge in people, it makes sense that a more intuitive approach could lead to better economic decisions.
Repeatedly facing the same choices might reduce people’s natural hesitation towards uncertain or risky options, especially when dealing with complicated and unclear terms and concepts.
The use of a thoughtful approach has been found to improve financial decision-making. On the other hand, the interaction between intuitive thinking and careful reasoning is key to promoting rational choices.
It has been noted that the quality of debt allocation decisions significantly improved with more experience. Interestingly, this improvement was more noticeable when people depended on their intuition instead of careful thought. Deliberative financial choices can sometimes be unproductive and may lower decision quality when choices are made repeatedly.
The findings from the debt management game also indicate that decisions viewed as economically rational may be more instinctive, while psychological factors could distract individuals with irrelevant information, leading to less optimal financial choices.