The Heuristics and Biases of Top Managers: Past, Present, and Future

Abstract

Psychology-grounded research on heuristics and biases in decision making has become increasingly influential in the field of management studies. However, although this line of inquiry is recognized as a valuable perspective for advancing understanding of decision processes in the upper echelons of firms, extant research remains unbalanced, the bulk of previous endeavours having been focused on managerial overconfidence, with insights from more recent dual-process theory and ecological rationality conceptions of heuristics less explored. This introductory article to the special issue of the Journal of Management Studies, entitled 'the heuristics and biases of top managers: Past, present, and future', offers a reflective review of prior work addressing its focal theme and places the articles incorporated into the special issue within this broader context. In addition, it sets out a number of directions for future work, with a view to inspiring the continuing advancement of conceptual and empirical knowledge and management practice.

Simon’s scissors: meta-heuristics for decision-makers

“…For instance, we highlighted how the growing interest in heuristics in the management-literature (e.g. Atanasiu et al, 2023;de Treville et al 2023;Guercini and Lechner, 2021;Hodgkinson et al, 2023;Katsikopoulos, 2023) lacks an integrative framework, which is problematic for scholars studying how heuristics are discovered. One may add that the changing technological and geopolitical environmentand the resulting uncertaintiesmay lead management-practitioners to perceive a need to equip themselves with new principles for behavior.…”

“…Hopp and Spearman, 2020, footnote 8;Lopes, 1992), on other occasions they are contrastedwithout any theory integration taking place in either case. Literature analyses reflect that rift, too: For instance, Hodgkinson et al (2023) document increases in publications on "top managers' heuristics and cognitive biases" (p. 1062; Italics added; capitalized and in bold in original), whereas Loock and Hinnen (2015) review neo-Simonian adaptive heuristics. Diverse usages of the term 'heuristics' have also been examined in other business-contexts, for example in marketing (Guercini, 2023a(Guercini, , 2023bGuercini and Freeman, 2023), international management (Guercini and Milanesi, 2020), customer-supplier relationships (Guercini et al, 2015), and operations management (Katsikopoulos, 2023).…”

“…Hopp and Spearman, 2020, footnote 8; Lopes, 1992), on other occasions they are contrasted – without any theory integration taking place in either case. Literature analyses reflect that rift, too: For instance, Hodgkinson et al . (2023) document increases in publications on “top managers’ heuristics and cognitive biases ” (p. 1062; Italics added; capitalized and in bold in original), whereas Loock and Hinnen (2015) review neo-Simonian adaptive heuristics.…”

How do stakeholder groups make sense of sustainability: Analysing differences in the complexity of their cognitive frames

“…Organizational strategy and action-including strategy and action by an MSI-are, in the final analysis, designed and implemented by people (Aguinis & Glavas, 2019;Hodgkinson et al, 2023). Hence, we focus in this paper on how individuals-as decision-makers in organizations from various stakeholder sectors make sense of the concept of sustainability.…”

“…Pushing the emphasis on the person further, we argue that the effectiveness of MSIs crucially depends on stakeholder cognition, that is, on how different stakeholders make sense of the sustainability issue at hand. When faced with ambiguities, as the ones surrounding sustainability challenges, humans tend to use cognitive frames to filter out information that may be relevant to the decision at hand (Daft & Weick, 1984;Hodgkinson et al, 2023). Different individuals are likely to develop cognitive frames that differ in the amount of information they hold, and these differences in information then feed into differences in the evaluation of the issue (Suedfeld & Tetlock, 1977).…”