How CEOs create heuristics to make their work more effective

The lifecycle of heuristics as managerial proverbs

Radu Atanasiu
Bucharest International School of Management & Vrije Universiteit Amsterdam

This paper proposes a theory-based process model for the generation, articulation, sharing and application of managerial heuristics, from their origin as unspoken insight, to proverbialization, to formal or informal sharing, and to their adoption as optional guidelines or policy. A conceptual paper is built using systematic and non-systematic review of literature. This paper employs a three-step approach to propose a process model for the emergence of managerial heuristics. Step one uses a systematic review of empirical studies on heuristics in order to map extant research on four key criteria and to obtain, by flicking through this sample in a moving-pictures style, the static stages of the process; step two adapts a knowledge management framework to yield the dynamic aspect; step three assembles these findings into a graphical process model and uses insights from literature to enrich its description and to synthesize four propositions. The paper provides insights into how heuristics originate from experienced managers confronted with negative situations and are firstly expressed as an inequality with a threshold. Further articulation is done by proverbialization, refining and adapting. Sharing is done either in an informal way, through socialization, or in a formal way, through regular meetings. Soft adoption as guidelines is based on expert authority, while hard adoption as policy is based on hierarchical authority or on collective authority.

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