Predicting a firm's forecasting ability: the roles of organizational illusion of control and organizational attention

Durand, Rodolphe

doi:10.1002/smj.339

Cited by 134 publications

(121 citation statements)

References 80 publications

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“…Empirical studies of forecasting accuracy show that predicting important business outcomes is challenging (Durand, 2003). The average absolute percentage error, i.e., (forecast -outcome) / forecast, in forecasts of macro-economic quantities (e.g., inflation, exchange rates, unemployment) by economists and analysts is about 20% (Armstrong & Collopy, 1992).…”

Section: Luck As Randomnessmentioning

confidence: 99%

Good Night, and Good Luck: Perspectives on Luck in Management Scholarship

Liu

Rond

2016

The Academy of Management Annals

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It is not insignificant that seminal contributions to management scholarship have highlighted luck as an alternative explanation for performance differences between individuals and organizations. Yet it has rarely taken center-stage in scholarship. The principal purpose of this paper is to provide a systematic review of the application of luck in the management literature and in such foundation disciplines as economics, sociology, and psychology. Our analysis finds five common perspectives on luck: (a) luck as Attribution; (b) luck as Randomness; (c) luck as Counterfactual; (d) luck as Undeserved; and (e) luck as Serendipity. We outline various ways in which research on luck may be advanced along each of these perspectives, and develop an underexplored, sixth, perspective on (f) 'luck as Leveler' to provide a possible solution to such issues as social inequality and (unwarranted) executive compensation.

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Section: Luck As Randomnessmentioning

confidence: 99%

Good Night, and Good Luck: Perspectives on Luck in Management Scholarship

Liu

Rond

2016

The Academy of Management Annals

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“…By relying on established routines to ascertain the profitability of environmental and 29 social investments, such as formal investment appraisal procedures (Epstein & Roy, 2003), and by referring to known solutions, such as incremental improvements of existing technologies (Hart, 1995), they strongly believe in their ability to handle and control risk (Das & Teng, 1999). The higher their sense of control, the lower not only the perceived risk, but also the greater the likelihood that risk is underestimated and the more optimistic the forecasts managers make about the outcomes of their responses to an issue (Durand, 2003;Kahneman & Lovallo, 1993). Consequently, these decision-makers are willing to consider investments of considerable magnitude as long as these do not entail radical departures from established routines but rely on skills and solutions, which they perceive to be able to master.…”

Section: Respondingmentioning

confidence: 99%

Cognitive Frames in Corporate Sustainability: Managerial Sensemaking with Paradoxical and Business Case Frames

Hahn

Preuss

Pinkse

et al. 2014

AMR

747

895

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(2014) Cognitive frames in corporate sustainability: managerial sensemaking with paradoxical and business case frames. Academy of Management Review (AMR), 39 (4). pp. This version is available from Sussex Research Online: http://sro.sussex.ac.uk/63539/ This document is made available in accordance with publisher policies and may differ from the published version or from the version of record. If you wish to cite this item you are advised to consult the publisher's version. Please see the URL above for details on accessing the published version. Copyright and reuse:Sussex Research Online is a digital repository of the research output of the University.Copyright and all moral rights to the version of the paper presented here belong to the individual author(s) and/or other copyright owners. To the extent reasonable and practicable, the material made available in SRO has been checked for eligibility before being made available.Copies of full text items generally can be reproduced, displayed or performed and given to third parties in any format or medium for personal research or study, educational, or not-for-profit purposes without prior permission or charge, provided that the authors, title and full bibliographic details are credited, a hyperlink and/or URL is given for the original metadata page and the content is not changed in any way. 1 COGNITIVE FRAMES IN CORPORATE SUSTAINABILITY: MANAGERIAL SENSEMAKING WITH PARADOXICAL AND BUSINESS CASE FRAMES ACKNOWLEDGEMENTSWe would like to thank Associate Editor Peer Fiss for his strong guidance throughout the review process, as well as three anonymous reviewers for their most constructive feedback and suggestions. 2 ABSTRACTCorporate sustainability confronts managers with complex issues and tensions between economic, environmental and social aspects. Drawing on the literature on managerial cognition, corporate sustainability, and strategic paradoxes, we develop a cognitive framing perspective on corporate sustainability. We propose two cognitive frames -a business case frame and a paradoxical frame -and explore how differences between them in cognitive content and structure influence the three stages of the sensemaking process, i.e. managerial

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“…By contrast, relatively little strategy research has focused on affirmative applications of information asymmetry, wherein a firm captures profit by exploiting informational advantages-for example, by ex ante misrepresenting the quality of its products to customers before the sale (adverse selection) or by ex post underinvesting in providing customer services after the sale (moral hazard). One notable exception is research on strategic factor markets (Barney, 1986;Makadok, 2001Makadok, , 2002Makadok & Barney, 2001), which focuses on how firms can exploit informational advantages when they play the role of buyer rather than seller, especially in markets for corporate acquisitions (Capron & Shen, 2007;Nayyar, 1990Nayyar, , 1993 and for other assets whose future value may be difficult to forecast (Durand, 2003;Makadok & Walker, 2000).…”

Section: Information Asymmetry: "You Can Fool Some Of the People Somementioning

confidence: 99%