Decision making, emotions, and
entrepreneurship
Ivey 908M58
Key questions
1. What’s new about emotional intelligence
in our understanding of human behavior?
2. Is EI really as “touchy-feely” as it’s been
portrayed in popular media?
3. How can you use dimensions of EI?
4. Why have some managers / individuals
persisted in discounting emotional
intelligence?
Emotions and feelings…
•
•
•
•
•
Reduce rationality
Contribute to poor decision making
Weak
Incompetent
Inappropriate
Decision making > intellect alone
• Feelings play a fundamental role in the way
we make decisions
• Lack of emotion reduces our ability to make
good decisions
• People with damage in the “emotion”
neighborhood of their brains tend to make
inappropriate or bad decisions
Logic + feelings = good
decisions
Feelings help us to:
• Direct our attention to highly important
things
• Make choices between competing options
• Be flexible, maintain options, and widen
our points of view
• Be creative and aware of opportunities that
surround us
Positive v. negative feelings
• Positive feelings associated with increased
creativity, integrative thinking, inductive
reasoning
• Negative feelings associated with greater
attention to detail, detection of errors,
problem solving and detailed information
processing
Moods and emotions
• Are expressions of feelings or “affect”
• Moods are low-level, non-specific feeling
that we may not even be conscious of
• Emotions tend to be sharp, short-lived
specific responses to specific events
• Moods and emotions are differentiated by
their level of energy
Describing moods and emotions
Mood
Positive
Negative
Emotion
Content, serene, Alert, excited,
relaxed, calm
enthusiastic,
elated, happy
Sad, Depressed, Tense, nervous,
Lethargic,
stressed, upset,
Fatigued
angry
How moods affect our decisions
• We tend to store information that is
consistent with our mood
• We tend to recall information that is
consistent with our mood
• When decision making we tend to
selectively remember information that does
not provide a balanced assessment of the
situation
Positive = good, negative = bad,
right?
• Good moods increase susceptibility to
decision making biases like planning
fallacy, optimistic bias, greater belief in
likelihood of positive outcomes, and lower
likelihood of negative outcomes
• Negative emotions can refocus a leader’s
attention, alert us to focus on issues that
we’d otherwise ignore (attention to detail)
Emotional intelligence
• “The ability to effectively join emotions and
reasoning, using emotions to facilitate
reasoning and reasoning intelligently about
emotions”
• EI provides insights into organizational
behavior
• EI can mitigate decision making biases
caused by emotions
Importance of EI
1. EI is twice as important as both technical
skills and IQ in terms of performance
2. EI is more important at higher levels
within an organization, accounting for
90% of difference between average and
high performers
3. Teams with critical mass of EI
significantly outperform teams without EI
critical mass
The emotionally intelligent
entrepreneur
Self-awareness
Self-regulation
EI
Entrepreneur
Motivation
Empathy
Social skill
Goleman’s model of emotional
intelligence
Dimension
Definition
Hallmarks
Self-awareness
Ability to
recognize and
understand your
moods,
emotions, and
drives, as well
as their effect on
others
Self-confidence,
realistic selfassessment, selfdeprecating
sense of humor
Goleman’s model of emotional
intelligence
Dimension
Definition
Hallmarks
Self-regulation
Ability to
control or
redirect
disruptive
impulses and
moods; to think
before acting
Trustworthiness,
integrity,
comfort with
ambiguity,
openness to
change
Goleman’s model of emotional
intelligence
Dimension
Definition
Hallmarks
Motivation
Passion for
work for reasons
that go beyond
money or status;
propensity to
pursue goals
with energy &
persistence
Strong desire to
achieve,
optimism in the
face of failure,
organizational
commitment
Goleman’s model of emotional
intelligence
Dimension
Definition
Hallmarks
Empathy
Ability to
understand
emotional
makeup of
others; skill in
treating people
according to
their emotional
reactions
Expertise in
building and
retaining talent,
cross-cultural
sensitivity,
service to clients
and customers
Goleman’s model of emotional
intelligence
Dimension
Definition
Hallmarks
Social skill
Proficiency in
managing
relationships
and building
networks, ability
to find common
ground & build
rapport
Effectiveness in
leading change,
persuasiveness,
expertise in
building and
leading teams
Hallmarks of EI entrepreneur
Self-awareness
Self-regulation
Self-confidence, realistic selfassessment, self-deprecating sense of
humor
Trustworthy, open to change
Motivation
Achievers, optimists, committed
Empathy
Building & retaining talent, service
Social skill
Change leaders, persuasive, team
builders