Title of Assignment: Emotional Intelligence and Decision Making in an Organisational Context

Name and Surname: N. O. Name Student Number: 00000000 Course: Industrial Psychology 2A Lecturer: Mr B Adams Degree: Due Date: 25 May 2007

TABLE OF CONTENTS 1. INTRODUCTION 2. DEFINITION OF CONCEPTS Decision Making Emotional Intelligence 2 3 1 2

3. THE RELATIONSHIP BETWEEN DECISION MAKING AND EMOTIONAL INTELLIGENCE Emotions Motivation, Challenge and Frustration in Decision Making Creativity and Intuition in Decision Making Framing 4. RELEVANCE TO THE ORGANISATION The Individual The Group and Team The Organisation 7 7 8 4 5 5 6 6 4

5. CONTROVERSY SURROUNDING DECISION MAKING AND EMOTIONAL INTELLIGENCE 6. CONCLUSION List of References 8 10 11

1. Introduction Individuals constantly find themselves in a position of needing to make decisions that vary in nature. All decisions, whether superficial or life-altering, short or long term are reached through a complicated process that involves various internal and external factors interacting to produce a result. The same holds true for individuals who find themselves in an organisational context. Continuously, various options and their consequences are being considered at all levels of the organisation and the ability to make accurate decisions is a necessity:

Business is now so complex and difficult, the survival of firms so hazardous in an environment increasingly unpredictable, competitive and fraught with danger; that their continued existence depends on the day-to-day mobilization of every ounce of intelligence Konosuke Matsushita. This intelligence includes emotional intelligence which has become increasingly documented as a crucial ingredient of success in an organisational context. As with intelligence, individuals differ in their level of emotional intelligence and their ability to capitalise on it and use it as an advantage. Emotional intelligence influences the process of decision making, and this essay will serve as a discussion of the relationship between these factors, as well as the relevance that it holds for individuals, groups and the entire organisation. Attention will be given to the controversy surrounding these ideas. This topic will be explored from the interpretive social science paradigm which argues that social interaction is carried out with purpose and intent, and it is vital to consider the individual meanings and interpretations that each player brings to the situation (Neuman, 2000). Emotional intelligence, a subjective construct, and decision making become evident in social interaction, and are largely influenced by the idea of reality that is created by the individuals involved. The concept of social interaction is highly relevant in an organisational context as individuals spend a significant amount of time in a process of exchange with others that gives rise to and modifies meanings. 2. Definition of Concepts Decision Making Decision making describes the act of seeking information, interpreting that information and, based on such perceptions, arriving at a conclusion in relation to strategic issues (Simons and Thompson as cited in Werner, 2007, p. 252). As is clearly illustrated, the meaning that is created by the parties involved in decision making, whether individuals or groups, has a direct impact on the choice of action

or inaction that is chosen. A likely outcome of decision making is change, which can be either positive or negative. Decisions can be used as a mechanism to produce desired or predicted change, as in essence often the decision making process only involves two options; choosing to leave things as they are (maintain the status quo) or to change (Beach, 1990). Having predicted change allows one to develop and further clarify goals which serve as a motivation as well as a baseline from which decisions can be evaluated. Decisions are often not only a single, isolated event (Beach, 1990) but rather occur in the context of previous and future decisions which are accepted as hopefully producing a desired outcome. In addition, due to the unpredictable nature of social reality, the results of decisions may not be as expected and may therefore require a further search for information and a new decision to be made. The decision making process can be seen as consisting of three steps; diagnosis, action selection and implementation (Beach & Connolly, 2005). Diagnosis involves realising the need to make a decision because of internal or external forces, or due to a previous decision being inadequate. This step requires a collection and interpretation of all necessary information. The step of action selection can be considered as the actual decision, as the best plan of action is chosen from all the options. This is influenced by the perceptions and interpretations of the individuals/groups involved. The last step requires that the chosen plan is carried out and progress is monitored by the use of goals. Emotional Intelligence Emotional Intelligence requires that one learns to acknowledge and understand feelings - both in oneself and in others and then appropriately respond to them, effectively applying the information and energy of emotions (Pauquet, 1998). As is seen in the definition, emotional intelligence is not only a personal and isolated construct, but rather becomes evident in and influences social interaction. In this way, emotional intelligence is seen as a subset of social intelligence (Verster,

1998) which is seen to encompass skills and competencies which allow for purposeful and appropriate social interaction. In line with the above definition, emotional intelligence is seen as including an interpersonal and intrapersonal dimension (Verster, 1998; Martin 2001). Interpersonal intelligence is the ability to notice and interpret the feelings, needs, desires and intentions of others. This is necessary at any level in an organisation, as it leads to the ability to successfully convey meaning and information. However, before one can interact on an interpersonal level successfully, intrapersonal intelligence, knowledge of self, must be developed. This includes displaying insight into ones own feelings, goals, ethics and abilities (Martin, 2001, p, 3) and this insight serves to direct behaviour. Emotional intelligence includes self-awareness, self-regulation, empathy,

motivation and social skills and competence (Sterrett, 2000 & Werner, 2007). As a result of these components combining in the correct balance, emotions can be seen as a source of human energy, information, connection and influence (Cooper & Sawaf, 1997, p. xiii). This is a desirable combination in organisations, as individuals are the organisations greatest asset, and their ability to relay information, and have meaningful social interaction with others is a prerequisite for successful business and goal attainment. As is line with interpretive social research, it is necessary to consider the subjective nature of emotions and they influence they have on the personal meanings and interpretations that an individual brings to the situation. Perception and social interaction are in a two-way relationship; individual interpretations influence the creation of social interaction, and the process of social interaction allows for the negotiation of meaning. 3. The Relationship between Decision Making and Emotional Intelligence Decision making in an organisational context has always been seen as a rational, logical and analytical process. From this premise it seems illogical to involve subjective, and irrational emotions in decision making. However, as this topic is

explored more, the prevalence and necessity of emotions in the decision making process becomes apparent. Emotions Individuals are emotional beings, and it is not entirely possible to separate emotions from logical thought. In this way it is argued that decisions and their implementation occur within a matrix of sentiments, moods, perhaps even passions, that colour and direct both the decisions and the actions that follow them (Beach, 1990, p. 69). It is accepted that emotions may cloud the decision making process, but the presence of emotions and emotional intelligence are necessary in making effective decisions. Furthermore, part of the problem solving process - integral to decision making- involves acknowledging the emotional needs of others (Martin, 2001) so as to result in satisfaction and improved teamwork. Various authors (Goleman, 1995; Cooper & Sawaf 1997; and Sterrett, 2000) have argued that feelings are indispensable to rational thought. In particular, emotions are seen as having the ability to organize thoughts and enhance intellectual performance when managed correctly (Cooper & Sawaf, 1997). Decision making clearly involves thought processes and intellectual activities, and the presence of emotions provides direction and intuition on how to approach a situation. Furthermore, reasoning, which is crucial to the decision making process, has no power unless it is accompanied by emotion (Cooper & Sawaf, 1997), as one can not persuade others to adopt an idea unless a strong belief in that idea, or disbelief in other ideas is communicated. Emotions associated with ideas allow one to express and then later adopt a preference. Motivation, Challenge and Frustration in Decision Making Decision making is not without its challenges and frustrations. Decisions may not produce the desired outcomes, the initial process of searching for information can prove to be tedious and the very realisation that a decision needs to be made can be a source of frustration. However, merely succumbing to the frustration is not an

acceptable solution, and therefore one needs motivation to continue in the process of decision making, despite challenges. Motivation, as a component of emotional intelligence, is seen as the ability to channel ones emotions towards a goal to increase attention, perseverance, mastery and creativity (Werner, 2007, p. 61). This motivation, allows for one to continue in their efforts to make the best decision despite adversity. Motivation and self-confidence form a part of intrapersonal intelligence and allow one to formulate alternative responses to frustrations as well as fostering a belief in ones own ability to reach the desired outcome (Martin, 2001 & Sterrett, 2000). Creativity and Intuition in Decision Making As argued by Goleman (1995), positive emotions allow one to approach decision making with optimism, which allows for increasingly complex and flexible thinking, improved cognitive ability as well as utilising creativity to find solutions to problems. Decision making is often accompanied by conflict, which is closely linked to the concept of creativity. Creativity can generate functional conflict, as it promotes the stimulation of unusual ideas, and creativity allows for the resolution of conflict because it enables individuals to adopt solutions that previously were not considered. Another concept to consider is intuition, which has become seen as a vital characteristic for good leadership and entrepreneurs. Intuition is defined as direct knowing without the conscious use of reasoning and is transmitted in the form of feelings (Cooper & Sawaf, 1997). Intuition allows one to make decisions quickly, serves creativity in that it gives one the sense that an idea that has not yet been tried could work, provides inspiration and eases confusion. Creativity allows on to approach the situation with a broad perspective of possible solutions, while intuition lets the individual be guided by an internal standard, which in turn allows one to be satisfied with the outcome. Framing

The initial step of diagnosis in the decision making process involves framing, the cognitive process of putting events into their context, and the more interpretive process of attaching meaning and interpreting the information in a particular way (Beach & Connolly, 2005 & Beach 1990). The process of framing often involves generalizing past experiences to the current situation. However, ones objective knowledge of previous situations is blurred by ones emotions surrounding the event, and therefore it is not advisable to rely on strategies that have previously worked without considering the individual nature of the current situation. On a more observable level, emotions define whether or not a situation is framed as positive or negative; and this in turn influences the individuals entire approach to the problem solving process. 4. Relevance to the Organisation Todays fast changing, more open and fluid style of work puts a premium on the combination of intellect and EQespecially when it comes to solve problems and seize opportunities (Cooper & Sawaf, 1997, p. xxxiv). Organisations in South Africa are realising the need to be able to compete in the global market, and are thus looking at implementing strategies to improve their performance. Decision making and emotional intelligence can be utilised on an individual, group/team and organisational level to ensure improved service delivery and efficient production. Although the following levels will be considered separately, it is important to note that the individual cannot be isolated from the others, as the individual forms the primary component of each. The Individual The first decisions that should be considered on an individual level are those that are made when a prospective employee approaches the organisation, and subsequently the decision of employment that is made. These initial decisions will have consequences for the individual and the organisation. It is important that individuals fit into the job, work, group and organisational culture (Beach, 1996) so that they experience satisfaction, perform well and make decisions that are complimentary to the organisations goals and values. Emotional Intelligence

affects ones ability to accurately perceive what a job entails and the ability of hiring personnel to select good candidates. Emotional intelligence improves ones ability to function psychologically and thus cognitively, allowing one to be in a position to perform optimally and make accurate decisions. However, the effects of low emotional intelligence should also be considered. If emotions cannot be recognised and dealt with appropriately, they appear in the body as fatigue, lack of concentration, pain and poor health (Sterrett, 2000). This results in a decrease of productivity from the individual, but can also have negative consequences for the organisation, such as employees taking increased sick leave and making costly mistakes. The Group and Team Groups are not seen as decision makers, they are merely the contexts within which individual members decisions become consolidated to form a group product (Beach, 1996, p. 3). In this way, all the factors that influence an individuals decision are present, but the process is more complicated as each individual brings their own meanings and interpretations to the situation. The combination of emotions and perceptions, with differing ideas has the potential to create conflict. Conflict that promotes the generation of ideas and builds cohesiveness in its resolution is desirable, but it can become dysfunctional if not managed carefully. Group members who display high levels of emotional intelligence are able to cope with functional conflict and resolve dysfunctional conflict by acknowledging the emotions and needs of others (Sterret, 2000), but still thinking logically to effectively problem solve. The Organisation An organisation is defined as the pattern in communication and relationships in a group that provides each member with information and assumptions, goals, and attitudes that enter into his or her decisions (Beach 1990, p. 10). From the

interpretive viewpoint, it is important to note how information and assumptions lead to the creation of a social reality with meaning that influences how individuals collectively frame a decision. It is necessary to consider how organisational culture has relevance to the process of framing. Organisational culture consists of the organizationally relevant beliefs and values that are mutually understood and subscribed to by its members (Beach 1996, p. 117). Organisational culture prescribes what is valued and desirable, and therefore facilitates the process of goal setting. The acceptance of goals and a decision is dependent on how compatible the framing of the decision is with organisational culture (Beach, 1996). Furthermore, organisational culture produces commonality in how individuals frame decisions (Beach & Connolly, 2005) and thus by reinforcing a desired culture, organisations can reduce conflict due to differences in framing. 5. Controversy surrounding Decision Making and Emotional Intelligence Organisations operate within a larger social context which is continuously experiencing the generation of new ideas and shifts in paradigms of thinking. Previously the emphasis was on objective studies and empirical research. There is still a great amount of value in the positivist approach to social research (Neuman, 2000), however flexibility in thinking has developed which allows for a more interpretive approach to be taken which provides for a consideration of how individuals construct meaning and social reality through a process of interaction (Neuman, 2000). This trend has led to research on constructs that were previously seen as too irrational to be considered as objective. One such construct is emotional intelligence. Recent thinking has come to be centred on the idea that emotional competency will be a far greater determinant of success than technical skills (Martin, 2001). No longer can the concept of observable skills and competencies, or measurable IQ alone predict the success of an individual in any arena, including the field of business. That was a limited perspective and as Goleman (1995) argues, a view of human nature that ignores the power of emotions is sadly short sighted (p.4).

The very concept of emotional intelligence appears to be a contradiction emotions have a connotation of irrational feelings taking over logical action, and intelligence depicts an idea of logic, and carefully calculated action. However, one can argue that the strength and value of emotional intelligence lies in this contradiction - the key is being able to find the balance between rational thought and emotion. Finding this balance may provide the answer as to why individuals who are high in IQ may be unsuccessful and those lower in IQ successful. Previously emotions were seen as distracting from effective decision making; now they are seen as playing as central role, whether contributing constructively to, or overwhelming the process (Beach & Connolly, 2005 and Sterrett 2000). This realisation has lead to the view of emotional intelligence as being a necessity to success, so that the desirable attributes of emotions can be harnessed to improve decision making. In addition, emotional intelligence has become regarded as a crucial ingredient for managerial and leadership success. One of the characteristics of a good leader is the ability to influence people to adopt ideas and perspectives and in this way, an estimated 90% of an [individuals] believability and credibility may be based on EQ-and related practical and creative intelligence - not IQ (Cooper & Sawaf, 1997, p. xxxi). This is largely due to the notion that emotional intelligence allows one to have personal and satisfying social interaction that in turn develops trust. This trust motivates the acceptance of and belief in anothers ideas. The importance that is being placed on emotional intelligence allows for a much more optimistic view on the abilities of individuals to succeed. The deterministic view of inherited intellectual ability is no longer seen as a prerequisite for achievement (Goleman, 1995), rather individuals can learn the skills involved in emotional intelligence and thus develop the ability to succeed. 6. Conclusion

Through a discussion and integration of relevant literature, it has been illustrated how emotional intelligence is closely linked to the process of decision making. It has been shown how this can be a beneficial and necessary association for the individual in an organisational context. Emotional intelligence fosters improved social interaction, as well as increased levels of personal satisfaction and awareness, this is due to the interpersonal and intrapersonal components. Furthermore it gives one the ability to explore creative alternatives, and enhances ones ability to lead effectively, all resulting in increasingly intelligent decisions being made and implemented. The development of emotional intelligence allows one to function optimally psychologically, cognitively, interpersonally and physically. The development of the interpretive social science research paradigm facilitated the necessary and effective research into a topic previously not considered as important by traditional researchers. The knowledge that has been gained can only benefit organisations in making better decisions to further increase productivity and customer satisfaction. Effective decision making creates goal generation and attainment and organisations that are able to meet their goals efficiently can compete in a global market. Today growth is equated with learning, and organisations need to learn the value of emotional intelligence and incorporate it into their culture and strategies to reach a level of achievement previously not an option in the past.

List of References Beach, L. (1990). Image Theory: Decision Making in Personal and Organisational Contexts. England: John Wiley & Sons. Beach, L. (Ed.). (1996). Decision Making in the Workplace: A unified Perspective. USA: Lawrence Erlbaum Associates, Inc.

Beach, L., & Connolly, T. (2005). The Psychology of Decision Making: People in Organisations (2nd ed.). USA: Sage Publications. Cooper. R.K., & Sawaf, A. (1997). Executive EQ: Emotional Intelligence in Leadership and Organizations. USA: The Berkley Publishing Group. Goleman, D. (1995). Emotional Intelligence: Why it can matter more than IQ. London: Bloomsbury Publishing. Martin, J. (2001). Profiting from Multiple Intelligences in the Workplace. Wales: Crown House Publishing. Neuman, W.L. (2000). Social Research Methods: Qualitative and Quantitative Approaches. Needham Heights: Allyn & Bacon. Pauquet, A. (1998). Emotional Intelligence as a Determinant of Leadership Potential. Masters Thesis. Rand Afrikaans University. Sterrett, E.A. (2000). The Managers Pocket Guide to Emotional Intelligence. USA: HRD Press Verster, A. (1998). Emotional Intelligence as a Determinant of Effective Cognitive Functioning. Masters Thesis. Rand Afrikaans University. Werner, A. (Ed.). (2007). Organisational Behaviour: A Contemporary South African Perspective (2nd ed.). South Africa: VanSchaik Publishers.