Analysis

Steve Jobs had an unconventional life and was raised by two working-class parents. Steve Jobs was an entrepreneur that dropped out of college and worked on becoming the owner of Apple. Entrepreneurship is defined to be a key driver for economic growth, job creation, and also competitiveness. (OECD, 1998) There is also a growing understanding that entrepreneurship is best defined as a field of business that works on seeking to understand how opportunities create something new. Through entrepreneurship, new ways to organize existing technologies arise, and individuals use these discoveries to create something new and exploit or develop these opportunities. (Shane and Venkataraman, 2000)

Steve Jobs relied heavily on intuition to make managerial decisions throughout his life. In his statements, he claims that intuition is a great force, and a person’s gut is always telling them something. Steve Jobs believed that to reach success,individuals needed to be able to deploy their talents wisely. (Srinivasan, 2013) Jobs explained that most of the workers on his Mac were poets and musicians. Jobs strategy is not one that comes without historical precedent since the convergence of art and science has created artists like Leonardo da Vinci and Michaelangelo. (Snow, 1960)

Steve Jobs, during his time at reeds, learned how to do calligraphy and also learned to experiment with different fonts and styles. Learning this skill proved to be instrumental for him while designing the Mac, and it was one such situation where intuition worked. (Highhouse, 2008) claims that there is a stubborn reliance on intuition and human decisions are claimed to be more reliable than scientific aids for a study.

This behavior is not uncommon and is even seen in seasoned practitioners who often neglect to seek out new evidence because they trust their research and studies more.(Pfeffer and Sutton, 2020) Evidence-based management has been hard to apply, and there is often too much evidence available, which at the end of the day clouds an individual’s ability to make judgments. Therefore, many people rely heavily on intuition and steve jobs has also signified his reliance on intuition in several situations. In his lecture to recent graduates, he advises them to trust their gut while going for anything because it is impossible to connect the dots looking forward.

Bounded rationality is also in harmony with these theories. Bounded rationality theory claims that decisions individuals make are limited by multiple factors such as the time they have at their disposal, the information they have available, and their mental information processing ability. In certain situations, people are often called out to give numerical predictions on the well being of a stock. If a favorable description is given, it attracts a favorable review, and if a negative description is given, it attracts a negative review regardless of the authenticity of the information. In most situations, individual predictions are insensitive to the accuracy of the information. (Tversky and Kahneman, 1974)

Steve Jobs relied heavily on rationality to make his decisions and also employed the use of emotional intelligence in stressful situations. Situations where he was removed from Apple, and he started from the ground up again and was successful. (Steve Drucker, 1995) claims that innovation is a destabilizer that allows for the creative destruction of the steady-state and therefore allows constant changes to occur.

 Evaluation

Decades of research have concluded that people care deeply about their self-concept and also expend a great deal of effort maintaining a positive image of self often by engaging in motivated reasoning (Steele 1988, Kunda 1990).

Steve Jobs is also no stranger to this. He engaged himself in positive images of self once he was laid off from Apple and motivated himself to start neXt and Pixar. These two initiatives ended up in him gaining back his lost position at Apple and also finding a partner that he could spend his life with.

Finance researchers have developed a Hubris hypothesis theory through studying the effects of over-optimism and overconfidence and have found out that overconfident managers end up overestimating the returns on their investments. CEO hubris is also fanned by the celebrity status that has come to pervade the upper echelons of business culture like steve jobs. In situations where Hubris becomes involved, tragedy can quite easily form. (Sadler-Smith, n.d.)

Steve Jobs has played a central and pivotal role to Apple, and much of Apple’s success is tied to his role. However, in some situations,steve jobs has executed poor managerial and unprofessional decisions as well. In a particular board meeting, Steve jobs was claimed to have barged in hurling profanities to the managers which ended up having the entire agreement going in bad taste.

Steve jobs rejoined apple not to make a profit but to donate to the cause. In his speech, he claimed that he loved what he did, and whatever happened at Apple was not enough to make him give up. Instead, it freed him up to start over, and once he was provided with the chance, he rejoined apple to make the most of his learnings. This version of executive leadership has been developed in the book ‘good to great.’ Level 5 leaders are individuals that are wholly and completely dedicated to the cause and the cause alone.

CNN reported that Jobs, in some cases, was not afraid to get his hands dirty and sometimes attended to customer service requests himself. Leaders who manage firms by taking in inputs from their employees and those who trust their employees more end up making their firm more productive and successful. Steve Jobs was able to bring about good results through walking a calculated balance of Hubris and Humility.

Steve Jobs has been known as an individual having a sharp eye for detail,and he had an autocratic style of leadership where he did not just stop at products. Steve also made a few mistakes in his professional life, but he did not let those mistakes get to his head and always picked himself up. (Economy, 2018)

Traditional economics Postulates that an economic man is also someone rational, and this man is also someone who is assumed to know relevant aspects of his environment which, if not complete, are at least impressively bright and also voluminous. (Simon, 1955)Moreover, Steve Jobs was also someone who possessed similar characteristics as those of a rational leader.

 Conclusion

Managerial Decision making is the act of making decisions about something or about a position or opinion or judgment that has been reached. For effective management, a significant level of prior accumulated knowledge and insight needs to be naturally present to be able to formulate a practical insight that can connect the dots effectively. (Manchester, 1995)

For most of his managerial decisions, steve jobs was an Individual that relied on perfection and an individual that had a preset vision in mind. His vision alone was the sole reason through which he was able to convert a small scale garage company into a billion-dollar company with 4000 employees. Wallas, in his four-stage model of insight, describes a stage between incubation and illumination. The illumination stage is one in which our fringe consciousness is near a rising consciousness that success is coming. There is an intuition that the direction we are following is the right path, and breakthroughs are also just around the corner. (Sadler-Smith, 2012)

From an analysis of steve jobs’ life and the decisions he has made throughout, it can be said that Steve Jobs was operating strikingly similar to the four-stage model of insight as proposed by wallas. Steve was a Level five leader that was not motivated by profit.Instead, he was someone that was motivated by the impact he can create. Level 5 leaders are individuals that love what they do and are motivated towards creating innovative products.

Intuition itself has many stages. Researchers were able to split the findings in dual processes, namely recognition based intuition and intuition-based inquiry. Gerd Gigerenzer’s book ‘Fast and Frugal’ Heuristics also talks about the importance of a harmonic balance between intuition and analysis to be able to make effective managerial decisions. Steve Jobs is a big proponent of following one’s intuition and claims that one should always have the courage to follow his or her gut because they somehow already know what one is going to become.

In the Gestalt psychology view of problem-solving, prior knowledge and expertise can be a barrier to creativity (King and Anderson, 2002). steve jobs also faced this problem and enjoyed his freedom when he started NeXT and Pixar and claimed that it freed him to enter the most creative periods of his life. The technology Steve Jobs was able to develop at NeXT with no pressure was so brilliant that it became the heart of Apple’s current renaissance.

Steve jobs applied a sensible approach to problems where he did not solely rely on his intuition or gut. He also placed in consideration various other factors as well. Achieving a balance on intuition and analysis can be said to be the best possible way to arrive at decisions.

Creative problem solving is at the heart of every successful business, and most creative solutions do not occur in situations of stress or situations of expectation. Steve Jobs uses his intuitive approach and trusts his gut feelings to be able to create innovative solutions. The classical model of decision making is a very dubious one, and most leaders fail to follow simply one model of decision making.Instead, they follow multiple different decision-making models and often end up mixing them up to be able to achieve favorable outcomes.

 

Bibliography

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Economy, P., 2018. Steve Jobs Used A Remarkably Powerful Decision-Making Strategy That Will Transform Your Business. [online] Inc.com. Available at: <https://www.inc.com/peter-economy/steve-jobs-used-a-remarkably-powerful-decision-making-strategy-that-will-transform-your-business.html> [Accessed 20 May 2020].

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Simon, H., 1955. A Behavioral Model of Rational Choice. The Quarterly Journal of Economics, 69(1), p.99.

Snow, (1960). The two cultures and the scientific revolution (Cambridge: Cambridge University Press), passim

Srinivasan, S., 2013. Steven Jobs (London: Little, Brown). Journal of Education and Vocational Research, 4(10), pp.300-301.

Tversky, A., and Kahneman, D., 1974. Judgment under Uncertainty: Heuristics and Biases. Science, 185(4157), pp.1124-1131.

Tversky, A., and Kahneman, D., 1974. Judgment under Uncertainty: Heuristics and Biases. Science, 185(4157), pp.1124-1131.

 

 

 

 

 

 

 

Appendix

 

Bounded rationality

Based on research, bounded rationality is the decisions individuals make when they are pressed for time. Steve Jobs was a bounded rational who used to make the best possible decisions based on his gut. Time is a scarce resource for many, and in many circumstances, there is simply not enough time to calculate future decisions. He encourages people to be creative and be brave enough to follow their gut.

Evidence-Based Management

As discussed above, evidence-based management is a management strategy that requires much time and motivation to execute. Something which is not as easily available, and this management strategy rarely gets practiced because most managers have a stubborn reliance on intuition.

Intuition

Steve Jobs was someone who relied on intuition and relied on his gut more than anything. He simply did not pursue things when they did not feel right, and it is for this very reason that he dropped out of college and eventually ended up starting a business empire.

Heuristic

Shortcuts are everyone’s favorites, and Steve jobs also used mental shortcuts to ease the cognitive load of making critical decisions.

Motivated reasoning

Steve jobs employs motivated reasoning by claiming that getting fired from Apple was the best thing to happen to him. His reasoning helped him make use of his skills to start new things that ended up becoming successful as well.