The influence of tacit knowledge and collective mind on strategic planning

by Erich N. Brockmann, William P. Anthony Managers, through their strategic choices, determine the success or failure of an organization (Andrews, 1971; Ansoff, 1988; Child, 1972; Priem, 1994). In this article we propose a model of the strategic decision-making process used by members of top management teams (TMTs). Specifically, we couple two criteria: 1) the supra-individual concept of the collective mind (Durkheim, 1895; Neck and Manz, 1994; Weick and Roberts, 1993) with 2) the efficacy of tacit knowledge and intuition in decision making (Agor, 1986a; Isenberg, 1984; Polanyi, 1966). The phenomenon of a collective mind is formed when a group of individuals enacts a single memory complete with differentiated responsibilities for remembering appropriate portions of a common experience. It is revealed in shared vocabularies (Martin, 1992), consensus on strategic means and ends (Bourgeois, 1980; Dess, 1987), and shared perceptions of the organization's environment, strategic position, and prospects (Hambrick, 1981). Tacit knowledge is defined as work-related practical knowledge (Wagner and Sternberg, 1986). It is that which is neither expressed nor declared openly but rather implied or simply understood and is often associated with intuition. Intuition is broadly considered as direct knowing, immediate

understanding, learning without the conscious use of reasoning, or making a choice without formal analysis (Behling and Eckel, 1991). Intuition is also considered a conduit between the subconscious and conscious (Parikh et al., 1994) and used to access tacit knowledge (Anthony et al., 1995). Traditionally, the rational analysis method is the preferred decisionmaking method taught and stressed (Mintzberg et al., 1995). An emphasis on tacit knowledge, or intuition, is contrary to these teachings and often carries a stigma (Agor, 1986a). However, everyone incorporates tacit knowledge in the decision process to some degree (Agor, 1985a; Polanyi, 1966). Our purpose here is not to denigrate the time honored rational or analytical decision-making process. Rather, we simply attempt to highlight the intuitive approach to making decisions in order to show its benefits to the strategic planning process. Through our proposals, we contend that incorporating tacit knowledge into a model of the strategic decision-making process is appropriate. Furthermore, it is beneficial to broaden the definition of strategic decision maker to include the collective mind (Weick and Roberts, 1993) of the TMT. Previous studies (e.g., Bantel and Jackson, 1989; Finkelstein, 1992; Hambrick and Mason, 1984; Wiersema and Bantel, 1993) have shown that consideration of the TMT as a whole can be more explanatory than reviewing

independent tiers of the leadership hierarchy or the CEO alone. We therefore focus on the TMT as the group of top level senior executives of an organization who make strategic decisions. However, we refrain from ascribing individual psychological characteristics to a collective mind (Walsh, 1995) by considering team members as individuals whom are influenced by the collective. In the following sections of this article, we present a review of tacit knowledge and its relation to intuition. This is followed by incorporating tacit knowledge and the collective mind into a partial model of the TMT strategic decisionmaking process along with corresponding propositions. Research implications germane to further study of this area and implications applicable to the practitioner conclude the article. TACIT KNOWLEDGE AND INTUITION Intuition and tacit knowledge are closely related. Wagner and Sternberg (1986) define tacit knowledge as workrelated practical knowledge learned informally on the job. It is manifest in people knowing more that they can tell (Polanyi, 1966) and associated with common sense (Sternberg et al., 1995). Saint-Onge (1996) includes intuition, perspectives, beliefs, and values people form as a result of their experiences in his definition of tacit knowledge. When Saint-Onge's description of tacit

knowledge at the individual level is congregated into an organizational level, it can approach the definition of culture (Hatch, 1993; Schein, 1985). Tacit knowledge is an intellectual and cognitive process that is neither expressed nor declared openly but rather implied or simply understood (Wagner and Sternberg, 1986). Although it is an intellectual process, tacit knowledge fails to correlate to intelligence or an intelligence quotient (Wagner, 1991; Wagner and Sternberg, 1985). Furthermore, from a psychological perspective, tacit knowledge is not an emotional process and differs from the emotions of feelings and wishes (Holloman, 1992). From a practical viewpoint, sometimes we are aware of knowledge only after we use it in attending to a problem. It is this after-the-fact awareness that is inherent to tacit knowledge (Polanyi, 1966). Tacit knowledge may be the only viable option when time is short or key aspects of the situation are hard to quantify (e.g., art or wine judging) (Schoemaker and Russo, 1993). Tacit knowledge can be used to sense if a problem exists, to check on more rational approaches, to bypass in-depth analysis, and to move rapidly to a plausible solution if a familiar pattern is recognized (Isenberg, 1984). Tacit knowledge can be used for integration at the back end of a decision process to check if the choice solution is appropriate, or it can be used eclectically to determine the

appropriateness of information while it is being gathered before the decision is due (Agor, 1986a). Tacit knowledge is routinely associated with intuition which is defined as choice made without formal analysis (Behling and Eckel, 1991). According to Parikh et al., (1994), intuition has two components. The first component is at the conscious level where intuition aids in the recognition of patterns, or what could be described as "if-then" statements or as a schema (Gioia, 1986). The second component is at the subconscious level where intuition is used to access the internal reservoir of cumulative experience and expertise developed over a period of years. After accessing the reservoir, intuition distills out a response to do or not to do something, or to choose from some alternatives - again, without being able to understand consciously how we get the "answers." According to certain metaphysical assumptions, there is also the (collective) supraconsciouslevel, implying that the ultimate reality is some kind of pattern of order or pure consciousness (Vaughan, 1979). Intuition can be applied to this collective unconscious (Parikh et al., 1994). Vaughan implies a connection between intuition and the supraconscious level even beyond our scope of the TMT: At any given moment one is conscious of only a small section of what one knows. Intuition allows one to draw on that vast storehouse of unconscious knowledge that

includes not only everything that one has experienced or learned either consciously or subliminally, but also the infinite reservoir of the collective or universal unconscious, in which individual separateness and ego boundaries are transcended (1979: 64). A connection between tacit knowledge and intuition also can be seen in the construct of a tacit knowledge inventory (TKI) (Sternberg et al., 1995) which may be viewed as a subset of Vaughan's (1979) reservoir of knowledge. This reservoir of implicit knowledge may be accessed, or made explicit, with intuition (Parikh et al., 1994) or mental imagery (Anthony et al., 1993). Intuitive access implies a conduit for knowledge transfer between the subconscious and the conscious. Therefore, subconscious memories can be recalled into the conscious where they can be applied to the current decision making setting. An individual senses a cue that triggers a subconscious reaction (Agor, 1986a). That is, an intuitive feeling of excitement, warmth, or recognition of insight will develop to indicate tacit support. This cue can come from an infinite number of sources, including the team's collective interrelating or from a guided imagery experience (Anthony et al., 1993). The requisite "chunk" of knowledge stored in the subconscious is then transferred to the conscious. Once in the conscious, the knowledge chunk, or memory, can be applied to the current problem.