DECISION

MAKING:
ANALYSIS AND
INTUITION
Ms. Maji Gonzales

Introduction
Decision making methods are important in understanding
 local networks and their universal applications.
These methods can also be used to handle issues on various
levels, including personal and international levels.
There are two widely acknowledged thinking forms in
decision making: strategic analysis and intuitive thinking.
We always make decisions: simple or complex things
and situation.
According to the dual process theory of cognition (Evans, 2008),
there are two kinds of thinking processes or systems at work
when we are reasoning, passing judgments, or making
decisions. These two thinking processes or systems have come
to called as System 1 and System 2.
System 1 thinking is characterized as the form thinking that
is intuitive, heuristic, unconscious, implicit and fast.
System 2 thinking as analytical, rule-based, conscious, explicit
and slow.

STATEGIC ANALYSIS / SYSTEM 2

Strategic analysis described as the system or process
of thinking that more deliberate, reflective,
computational and rule governed. (Facione, 2013)
Some scholars specify the stages of problem-solving
or decision-making.

STATEGIC ANALYSIS / SYSTEM 2

Sequential by Brim et. al
 problem Production of
Obtaining necessary possible solutions
Identification of the information
solutions
Selection of a strategy
for performance
Evaluation of such

ANALYTICAL METHODS
There are different kinds of methods that are widely used nowadays to
be able to obtain such outputs and evaluations.

SWOT ANALYSIS
PEST ANALYSIS
COST-BENEFITS ANALYSIS
COST-EFFECTIVENESS ANALYSIS
 SUBJECTIVE EXPECTED UTILITY

SWOT
avoided; it is an internal negative factor.

OPPORTUNITIES

ANALYSIS This includes possible areas of growth or

development in the future; external positive
factor THREATS
It was conceived originally to aid decision
makers in the areas of business and This includes obstacles to achieve one's objectives or
industry. external factors that beyond one's control that could
It has universal application. be put one's strategy risk; external negative factor
It is also called as Internal-External
Analysis. PEST
STRENGTHS
This includes the advantages, and it is also be
ANALYSIS
seen as internal positive factor.
It examines the effects of relevant external
WEAKNESSES POLITICAL
This includes areas that still require It includes legal law and practices, or how the government can
improvements and things that need to be affect the decision-making
ECONOMICS
It includes factors like financial resources and value of money in
factors on what is being decided on. relation to interest
rates and inflation

SOCIAL
It includes factors like demographics/population and culture

TECHNOLOGICAL

It includes factors related to current advancements in

technology like internet, computers and popular gadgets.

COST-BENEFIT ANALYSIS
It is also called as benefit-cost analysis.
It is a systematic method or process of calculating the strengths (benefits and
advantages) and weaknesses (costs and disadvantages) of each of the
alternative solutions to a given problem in monetary value.
It is widely used in business but can also be applied to determine the viability of
non business projects of the government and private individuals. There
advantage (has specific calculation) and disadvantage (some aspects are not
measured in values) in this analysis.

COST-EFFECTIVESNESS ANALYSIS
This is generally same way as CBA in the sense that it is likewise a systematic
method or weighing the strength and weakness of alternatives in a given
problem.
the difference is that while in CBA all outcomes, which is form of costs and
benefits, are measure in monetary terms. In CEA, not all outcomes and benefits
are measured in monetary terms but instead measured by its effectiveness.

SUBJECTIVE EXPECTED UTILITY

 It is the kind of analysis examined in Decision Theory, the discipline that
provides a rational framework for choosing between alternative courses of
action when the consequences resulting from the choice are imperfectly
known.
Utility is also called utility value, and refers to the value of an option in
consideration of the degree in which the outcome of option promotes the
interests or satisfies the preferences of the decision maker.

SUBJECTIVE EXPECTED
UTILITY The process involves:
Identify the possible outcomes of each option.
Assign the utility value for each of outcomes in numerical terms (0 being the
lowest and 18 the highest)
Assign a probability to whether a certain outcome will happen or not.

INTUITIVE THINKING/ SYSTEM 1

To further understand this thinking, let's see the
difference between system 1 and two in terms of the
aspects or mental attributes and functional
attributes.
INTUITIVE THINKING STRATEGIC ANALYSIS

MENTAL ATTRIBUTES

Unconscious (preconscious) Implicit

Automatic
Low Effort Controlled

Rapid High Effort

Impulsive Slow

Evolutionary old Rational

Shared with animals Evolutionary recent Uniquely

Conscious
human
Explicit
INTUITIVE THINKING STRATEGIC ANALYSIS

FUNCTIONAL ATTRIBUTES

Intuitive
Practical
 Concrete Rule-based

Heuristic Analytic

Holistic Linked to gen. intelligence

Independent of gen. intelligence Limited by working memory capacity

Independent of working memory Sequential

Parallel

Analytical

Theoretical

Abstract