MARKETING RESEARCH

20th DEC

Secondary Data Research

2017
Presented to:
Sir. Basit Afzal

Presented by:
M.Hilal Qureshi 2173057
Meher-un-Nisa 2173090
Asma Imran 2173057
Maham Tanveer 2173016
 Secondary Data Research

Emotional factors that effect managerial

decision making in organizations

Introduction
Decisions are the essence of management and active in all the company’s plans of activities and
results. The study of the decision-making process is getting more and more important because
the effectiveness of the activities taking place in business depends on the way decisions are
largely designed and implemented. When we look at the nature of decision-making, the
constant and always present factor is the decision maker. The fact that information gathering
and evaluation systems are highly developed will mean nothing to an unrecognized problem or
an undetected information need. The decision-making process depends entirely on people. It is
a manager’s central work, all other activities being conducted to ensure correct decisions or if
the decision was already taken, to implement and monitor its effectiveness. Managers are
constantly required to evaluate alternatives and make decisions regarding a wide range of
matters (Panzaru, 2010). In this study, different decision-making processes were evaluated
within the framework of the integrated framework and it was clarified that the factors affecting
the administrative decision-making processes were personal, environmental and psychological.
At the same time, it was determined that management information systems should be involved
in the administrative decision-making process.

Decision-Making Process
Decisions play a special role in the company’s management. There are several definitions of the decision
in the literature. Massie (1971) defined it as involving a choice between alternatives; if there are no
alternatives, then no decisions are required or can be made. A decision is purposive, to attain some
objective; that is, there is a reason for making it. Decision making is a course of action consciously
chosen from available alternatives for the purpose of achieving the desired result. The process of
decision-making is one of the most complex mechanisms of human thinking, as various factors and
courses of action intervene in it, with different results. It is about making choices by identifying a
decision, gathering information and assessing alternative solutions. Orasanu and Connolly (1993)
defined it as a series of cognitive operations performed consciously, which include the elements from
the environment in a specific time and place. Another different definition was given by Corcoran-Perry
(1997): Decision-making is the interaction between a problem that needs to be solved and a person who
wishes to solve it within a specific environment. There are several steps that must be followed in order

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to arrive at a decision: Firstly, determine the goals to be achieved, secondly, generate alternatives that
lead to attaining the proposed goals, thirdly, evaluate whether these alternatives meet one’s
expectations and, lastly, select the best alternative, the one that implies an efficient global result
(Halpern, 1997). There are many decision-making models in the literature. Simple decision-making
models involve the steps that participants need to follow when making a decision. Different authors
have differentiated the phases of the decision-making process in different ways. Decision-making
processes are almost 3, 5, 7 steps. The basic features of these models are that the first step is to
determine the problem or decision. The most important feature that separates the problem solving and
decision making are the property of the limits of human rationality. Simon (1986) developed a model of
decision making. The model consisted of three steps, intelligence, design, and choice. In the
intelligence phase, the problem is identified, and the information is collected concerning the
problem. This can be a long process, as the decision to be made comes from the information.
The design phase develops several possible solutions for the problem. Finally, the choice phase
chooses the solution. One decision-making model was created by Chestnut (2013). According to
author the decision-making process includes three stages: First stage is identification, the
second stage is building decision components and the third stage is implementation. It is known
that making decision is the main duty of the manager. Managers want to make the best
decision in the interests of the company that evaluates the alternatives. The managerial
decision-making process is affected by four factors: the decision-making approach, the type of
problem, decision-making conditions, and their decision-making style. In addition, in the
decision-making biases refer to the situation in which decision-making shortcuts are
inappropriately applied. So certain decision-making errors and biases may impact the process.
Each factor plays a role in determining how the manager makes a decision (Robbins & Coulter,
2012).

Literature review
The study is supported by below mentioned literature on relevant researched topics to judge
the impact of emotional stability on managerial decision making.

The most important factor influencing the decision-making process is the personality of the
manager. The manager's family background, education, and information can be considered as
sub-bases that constitute the personal factor in the decision-making process. However, even
when all these sub-structures are almost similar or identical, it is observed that the managers
differ among themselves. This is the personality of the decision maker who makes difference
(Kurt, 2003). The cognitive, moral and psychological qualities of people have influenced on the
decision process. According to Massie (1971), a decision is defined as involves mental processes
at the conscious level; processes which contain important logical aspects and these suggest that
decisions should be “rational”. However, there are also emotional and sub-conscious factors

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which may not be consciously expressed and which may make a decision appear to be non-
rational to an observer. According to Onaran (1971) individuals' psychological characteristics
such as perception, motivation, comprehension, interpersonal relations, and interactions
influence the decision-making process. Perception, such as conceptualization and evaluation,
has more impact on the mental components of the decision-making process. Emotion is about
the excitement that plays a role in the evaluation of options. Pohankova (2010) stated in her
study that the result of decision-making process depends on motivation. Motivation is an
important element in any change in the organization and influence of the whole process. Tekin
(2009) emphasized that intelligence, cognitive style, age, experience, the level of knowledge of
the manager play a role in the decision-making process. For example; It is seen that managers
who are witty, easy to learn, knowledgeable and profound can make decisions more quickly
and qualitatively than others. Öztürk (2009) has analyzed managers who worked in the primary
and secondary schools in the center and villages of Giresun city (in Turkey) in his own study.
Based on the research result, there is a meaningful relationship between manager's
psychological characteristics and manager's decision-making skills competence. In the process
of decision making, managers are affected by their decision-making skills with personal and
psychological characteristics. A manager is making decisions on the basis of experience,
feelings, and accumulated judgment. According to reports by Gilgoff (2009), almost half of the
surveyed managers were found to use more intuition than operate an official analysis to run
their companies. Bachkirov (2015), researched on managerial decision making under specific
emotions. His purpose of research was to check how incidental emotions affect the managerial
decision making. Research concluded that in case of happiness and anger, managers tend to
possess less information that is related to managerial decisions and In case of fear they tend to
be more detail oriented. Clarke (2010), researched similar type of topic which was how project
manager’s emotional awareness can influence decisions and behaviors in project. Study was
conducted to gain some knowledge and insights concerning how emotions can affect or control
managerial decision making when working on projects. In depth Interviews with 15 managers
those who got emotional intelligence training were carried out to gain insights. Study found
that in many situations project managers face different type of emotions that can affect and
influence manager’s decision making and can change behaviors. Damasio, A.R. (1994) Emotions,
as defined by Damasio, are changes in both body and brain states in response to different stimuli
while making managerial decisions. Physiological changes (e.g., muscle tone, heart rate, endocrine
release, posture, facial expression, etc.) occur in the body and are relayed to the brain where
they are transformed into an emotion that tells the individual something about the stimulus
that they have encountered. Over time, emotions and their corresponding bodily change(s)
become associated with particular situations and their past outcomes. When making decisions,
these physiological signals (or ‘somatic markers’) and their evoked emotion are consciously or
unconsciously associated with their past outcomes and bias decision-making towards certain

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behaviours while avoiding others. For instance, when a somatic marker associated with a
positive outcome is perceived, the person may feel happy and motivated to pursue that
behaviour. When a somatic marker associated with the negative outcome is perceived, the
person may feel sad and the emotion may act as an internal alarm to warn the individual to
avoid a course of action. These situation-specific somatic states based on, and reinforced by,
past experiences help to guide behaviour in favour of more advantageous choices and
therefore are adaptive.

According to the SMH, two distinct pathways reactivate somatic marker responses. In the first
pathway, emotion can be evoked by the changes in the body that are projected to the brain—
called the "body loop". For instance, encountering a feared object like a snake may initiate the
fight-or-flight response and cause fear. In the second pathway, cognitive representations of the
emotions can be activated in the brain without being directly elicited by a physiological
response—called the "as-if body loop". For instance, imagining an encounter with a snake
would initiate a similar flight-or-fight response "as-if" you were in that particular situation
(albeit perhaps a much weaker one). In other words, the brain can anticipate expected bodily
changes, which allows the individual to respond faster to external stimuli without waiting for an
event to actually occur.
According to Coget, Haag. Gibson (2011), who worked on influence of anger or fear in decision
making, the fear and anger are consistent workplace emotions that can influence managerial
decision making. Decision makers tend to make more conscious decision and in some case less
conscious decisions. To study the influence of emotions on decision makings several interview
with decision makers were held and qualitative analysis were conducted. Study concluded that
decision makers make decisions either on bases of expertise or on emotion bases. When there
is moderate level of fear and feelings or anger then decisions tend to be more rational.
Kowalski-trakofler & Vaught (2003), researched on judgment and decision making under stress
to judge how stress causes influence on decision making by managers in emergency situations.
Research concluded that person who is making decisions faces a number of elements in this
process, some elements leaves a huge impact on decision making ability, stress is one of those
elements. Martin (1993), wrote an article on feelings, emotional empathy and decision making.
His article explains and recognizes through empirical and experiences there are different
dimensions which are affected by managerial decision making. Such dimensions reflect
sensitivity to feelings and emotions. Holian (2006), researched on managerial decision making
and ethical issue and Emotional intelligence. Qualitative interviews were conducted to collect
data for this purpose. The finding of his research improved the preceding research efforts on
similar topic and helped managers how to make decision on the basis of ethical issues and
Emotional intelligence. Kouam, Oliver & haro (2005), studied on emotional diversity and
managerial decision performance. The purpose to conduct this research was to expand and
improve previous findings on similar problems. Researcher engaged few students of business

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administration in decision making process and took some insights from previous studies on
similar topic. Researcher concluded that both the positive and negative emotional diversity is
positively linked with managerial decision making performance. Connelly, Gaddis & fauth
(2013), conducted research to find the role of emotions in transformational and charismatic
leadership. The previous researches and theories are studied which gave insights about this
problem. Findings enlightened that specific emotion has a strong influence on the
communications and decision making of leaders. Svensson (2011), studied on how to managing
negative emotions in emergency call taking. Research concluded that decision is being made by
emergency call taking managers is often based on emotions and suggested what strategies
should they adopt for assuring emotional stability when managing emergency calls or making
decisions. Duque (2013), researched on effects of emotional state on decision making. Purpose
to conduct this research was to test how our mood is influenced on the time of decision
making. Two different focus group meetings were conducted separately and asked same
questions from both focus groups. Research reached on a result that group of people who were
in good mood make their decision fast and answer the survey question quickly and the group of
people who were in bad mood make decision late and their answer were more confusing so the
conclusion is good mood or emotion help us to make decision quickly and accurately.
Chaudhary & Khan (2012), researched on role of emotions whose work is an important part of
all the managerial activity. He also observed that the emotional form of the processes has been
largely ignored. Thus, the familiarity and expression of emotions are more than simply objects
and outcomes of these processes. This research serves as a basis for the management to spot
the impact of emotions in decision making. Simon (2013), researched on two relatively
neglected types of decision making emotion based decision making and decision making that
involves interpersonal interaction. He concluded that the decisions made under certain
emotions are neglected in organizations but they have huge impact on decisions. Luksha (2006),
found emotions are important element for satisfaction and motivation and decision making.
According to Agarwal & Chaudhary (2013), in their study role of emotional intelligence in
ethical decision making, an emotional intelligence is a key for performance. Whenever decision
has to be made within organization emotional intelligence can help individual to be emotionally
stable when making decisions. Sayegha, Anthony & Perrewe (2004) worked on managerial
decision making under crisis: Study discussed the example of terrorist attack on world trade
Center. These circumstances had left remarkable amounts of uncertainty, and fear, which
required quick decisions by many in the management and community. They found that under
certain crisis there is an impact on managerial decision making by different emotions like fear.
Kwortnik (2007), researched on how people experience decision making for experiential
products such as vacations. Data was collected through ethnographic interviews and online
community discussion forum. Research concluded that making decisions under specific
emotions leaves impact on decision. Aleksandr (2016) studied the impact of manager's

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emotional intelligence on the financial, public, and ecological elements of the Organizational
actions and the decision making by managers and heads in organizations. The main focus of the
research was to find the emotional intelligence of the managers and their performance. The
performance should be measured by quantitative criteria of its development. Alghamdi (2013),
conducted a study, which investigates the influence of Emotional Intelligence on the school
leaders' ability to make good decisions. The study concluded that strong emotions help school
leaders to make effective decisions. And when the emotions are not dealt with in a positive way
it can lead to unfortunate decisions. Lerner, Valdesolo & Kassam (2015), conducted a research
which analyzes what has been learned from the past 35 years of work on emotion and decision
making. Research revealed that emotions constitute powerful, pervasive, and predictable
drivers of decision making. Hong-hee (2012), published research paper to develop a theoretical
framework for answering how emotions affect strategic decision making of managers. He
concluded research in following manner, Positive emotions i.e. Joy, pleasure, self confidence,
passion direct towards positive thoughts and negative emotions i.e. anger, fear, stress, sadness
lead toward negative thoughts and as a result managers’ decision making is affected favorably
and unfavorably respectively. Kowalshi, vaught & scharf (2003), conducted research on
decision making and judgment by managers under stress. This research concluded stress
narrows the focus of attention of the manager while making decision. Hess & Bacigalup (2013),
researched with purpose to judge impact of emotions on decision making by nonprofit
organization’s leaders. For research purpose they provided a checklist of 14 questions to the
decision makers of nonprofit organizations, and concluded nonprofit organization’s leaders
who are self aware of their emotions and can accurately assess their strengths in comparison to
others in organization have advantage of leveraging attributes of others in decision making
process. A study conducted by Head of Business Administration Department of Annamalai
University, India in February 2015. Purpose of this research was to judge the influence of
emotions on transactional and transformational business decision makers. 150 top executives
were selected for data collection and canonical correlation research method was used. Results
of this study indicated that emotions highly influenced the decision of those managers whose
organizations are in transactional phase than decision of those whose organization’s in
transformational phase. Barzegar , Afzal, Maleki & Koochakyazdi (2013), researched on
highlighting the impact of emotional intelligence in emergency hospital managers on
performance of their organization (emergency hospitals). Cross sectional questionnaire based
survey on 30 senior and junior hospital managers. Research revealed that decision makers
(emergency hospital managers) who have higher emotional intelligence are capable of
overcoming difficulties and take better decisions, therefore play an important role in improving
performance of their organization than those who have lower emotional intelligence. Dane &
pratt (2007), studied on exploring emotions and intuitions and its roles in managerial decision

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making. They found that emotional stability is important for managers when they make
decisions. Rational decision is made on the basis of emotional stability.

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Sayegh, L., Anthony, W. P., & Perrewé, P. L. (2004). Managerial decision-making under crisis: The role of
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Connelly, S., Gaddis, B., & Helton-Fauth, W. (2013). A closer look at the role of emotions in
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