Tackling Managerial Cognitive Limitations by Harnessing Artificial Intelligence

Abstract

Human cognitive limitations pose significant challenges to processing the vast amounts of data necessary for strategic decision-making and management. This paper examines some of the limitations, including heuristics and biases, and explores how emerging Artificial Intelligence (AI) systems may transform strategic management practices in the future. Drawing on previous literature and industry insights, we trace how AI tools are already reshaping strategic decision-making to overcome human limits. Our paper reveals a tension: while novel AI excels at pattern recognition, explanation, content creation, and predictive analytics across vast datasets, many strategically critical decisions, particularly those involving ethical judgment and authentic relationship building, are likely reserved for humans. This suggests that future leaders must balance AI's analytical power with distinctly human capabilities, and humans benefit from adapting to and collaborating with machines in decision-making processes. The paper concludes by proposing six working hypotheses and delineating research opportunities for understanding human-AI collaboration in the future.