Is there a role for intuition in the decision-making process, or should all judgments be made strictly on the numbers? Explain your answer.

Question

What will be an ideal response?

Answer 1

This would be a great topic for a class debate. Many top managers do believe in a “seat of the pants” factor, but only after a thorough financial analysis has taken place. Even so, the history books are full of examples of major inventions that did not appear financially attractive or desirable when introduced initially. An excellent example might be the computer, which IBM almost rejected because its corporate leaders in the 1950s did not foresee widespread business usage or good “numbers” that would justify the firm’s entry into this new field. Until then, IBM had become highly profitable by selling typewriters, punch-card equipment, and other business machines.
Another example is the technology that has enabled modern toner-based copiers and laser printers. The basic concept was offered to, and rejected by, several large firms before a smaller company in upstate New York, named Haloid, decided to invest in it. Haloid later became the Xerox Corporation, which became a leader in developing applications for the new technology.
In other cases, people decided to invest (or not to invest) in a small startup company named Microsoft in the 1980s. If you made a decision strictly by the numbers, there were probably many other safer, more attractive alternatives. But back then if you had an intuition that there was something special about this small company, your investment would become immensely valuable as time went on.