Business administration is a science. That means, we cannot just rely on gut feeling. We need a systematic approach in business, a scientific approach. Either quantitatively or qualitatively, they must be scientific. We plan, set goals, allocate resources, control behaviors, and evaluate what have been done. It is rational thinking. However, business administration is also an art. It involves creativity and imagination, gut feeling, and emotion.
There is a growing evidence that humans do have irrationalities. Dan Ariely, the author of the groundbreaking books: Predictably Irrational and The Upside of Irrationality, made researches to support the claim that we are irrational beings. That means we don’t just think in terms of cost-benefit-analysis (CBA). We also think and act based on our individual biases.
There are things that we could not just explain to other people. Our judgement tells us that is it the right thing to do while people around us perceives it inadmissible. Malcolm Gladwell, in his book Blink, explains that snap judgement could be reliable. It is a slice of the whole. It is now being studied in prestigious universities, the psychology of blink.
It’s anecdotal but it’s true, when a Filipino author said that business planning is a myth. So why do we plan anyway? “If you fail to plan, you plan to fail,” is the message of a rational being, however, an irrational being would say “my gut feeling says so.” “What if it won’t sell?” a rational being asks, the irrational being would argue “If you think it won’t, it won’t really, but I feel it will.” After all, the person who says it won’t sell is irrational too.
