Making the same mistake all over again: CEO overconfidence and corporate resistance to corrective feedback

• 成果类型: Review
• 署名作者: Chen, Guoli; Crossland, Craig; Luo, Shuqing
• 署名单位: INSEAD Business School; University of Notre Dame; National University of Singapore
• 刊物名称: STRATEGIC MANAGEMENT JOURNAL
• ISSN/ISSBN: 0143-2095
• DOI: 10.1002/smj.2291
• 发表日期: 2015
• 页码: 1513-1535
• 关键词: ceo overconfidence; corrective feedback; strategic decision making; management forecast accuracy; MANAGERIAL COGNITION

摘要

Firms often make mistakes, from simple manufacturing overruns all the way to catastrophic blunders. However, there is considerable heterogeneity in the nature of corporate responses when faced with evidence that an error has taken place, and, therefore, in the likelihood that such errors will reoccur in the future. In this paper, we explore an important but understudied influence on firms' responses to corrective feedbacka CEO's level of overconfidence. Using multiple distinct measures of overconfidence and the empirical context of voluntary corporate earnings forecasts, we find strong, robust evidence that firms led by overconfident CEOs are less responsive to corrective feedback in improving management forecast accuracy. We further show that this relationship is moderated by prior forecast error valence, time horizon, and managerial discretion. Copyright (c) 2014 John Wiley & Sons, Ltd.