The Application of Metacognition to Business Decision Making

Abstract

One of the challenges facing managers in modern-day business is the ability to make effective decisions amidst complexity. Complexity manifests in many aspects of business, in particular the competitive environment. Complexity causes uncertainty and ambiguity which force businesses to think creatively in order to be adaptive and responsive. Traditional practices of decision making are often inadequate to deal with the challenges of modern-day complexity. Recognition is growing that modern businesses need to enhance their decision-making processes and systems to better reflect the current business environment. Traditional models of decision making are based on rational and intuitive decision-making processes. The present study draws upon insights from the emerging field of neuroscience to explore cognitive processes of decision making. In particular, the process of metacognition (the ability to think about what one is thinking about) is examined. The central proposition underlying the study is that awareness of metacognition can improve decision-making ability at the individual level of analysis. The literature on metacognition and decision making provide a foundation for integrating across the two disciplines. Theoretical and operational models are developed from these literatures. The main aim of the research is to introduce the concept of metacognition, a phenomenon salient in the neuroscience literature, to the process of decision making within the modern business context. The study tests the influence of understanding metacognition in relation to decision making through an experimental design, including use of experimental and control groups. The experimental group receives advance exposure to metacognitive strategies, including thinking aloud and visualisation, whereas the control group approaches the decision making exercises without special instructions. Decision making is measured by three exercises: problem solving, memory retention and lateral thinking. Each exercise is examined and tested individually to determine the extent of the influence of metacognitive awareness. Baseline metacognitive ability is assessed through a Metacognitive Awareness Inventory for both groups as a control variable. Ninety students across four Victoria University of Wellington business school undergraduate courses voluntarily participated in the experiment. The students were randomly divided into two groups: an experimental group and a control group. Each participant was given a questionnaire requiring approximately 30 minutes to complete, with a number of problem statements and exercises that tested problem solving, memory retention and lateral thinking ability. The findings from the study demonstrate that the experimental group, who were cued in advance to apply metacognitive strategies, performed better at problem solving and memory retention. There was no significant difference in means between the experimental and control group for the lateral thinking exercise. These results are discussed in detail. The research suggests that teaching students about the concept of metacognition along with developing skills in the application of metacognitive strategies have the potential to enhance decision-making capacity, which in turn will address the challenges of complexity. It is proposed that the findings from this study may be relevant within the managerial context and that similar interventions might be considered for future management development programmes. These findings support the current literature which has primarily focused on the school sector. Limitations are recognised, including generalisability, and avenues for future research are proposed, including further applications of metacognition, along with other insights from neuroscience, to enhance processes of business decisio

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