Decision making, emotions, and

entrepreneurship
Ivey 908M58

Key questions
1. Whats new about emotional intelligence
in our understanding of human behavior?
2. Is EI really as touchy-feely as its 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

Emotion

Positive

Content, serene, Alert, excited,

relaxed, calm
enthusiastic,
elated, happy

Negative

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 leaders
attention, alert us to focus on issues that
wed 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

Golemans 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

Golemans 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

Golemans 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

Golemans 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

Golemans 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-confidence, realistic selfassessment, self-deprecating sense of

humor

Self-regulation

Trustworthy, open to change

Motivation

Achievers, optimists, committed

Empathy

Building & retaining talent, service

Social skill

Change leaders, persuasive, team

builders