Organizational Beliefs and Managerial Vision

By Eric Van den Steen. 2005

316 citations recorded by the source corpus.

Can managers have an impact on their firm that goes beyond their direct actions and decisions? This article shows that a manager with strong beliefs about the right course of action will attract, through sorting in the labor market, employees with similar beliefs. This alignment of beliefs gives direction to the firm and has important implications for incentives and coordination. The article then defines vision, in accordance with the management literature, as a strong belief about the right course of action, and shows that it may be optimal to hire managers with such strong beliefs. Vision will be most important when uncertainty is high and actions are difficult to contract on.

Subfields: Organizational Behavior and Human Resource Management, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/866837854c533932bb395883ff2c2984d33595c2

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In Organizational Behavior and Human Resource Management

In Strategy and Management

Citations in the corpus

Living through the Great Chinese Famine: Early-life experiences and managerial decisions ☆ (2018, background): “…of managers affect corporate decisions and performance (e.g., Rotemberg and Saloner, 2000; Bertrand and Schoar, 2003; Malmendier and Tate, 2005; Van den Steen, 2005; Bennedsen et al., 2006; PérezGonzález, 2006; Hirshleifer et al., 2012; Kaplan et al., 2012; Quigley and Hambrick, 2015).”
Who Makes Acquisitions? CEO Overconfidence and the Market's Reaction (2008, unknown): “6 See Bernardo and Welch (2001), Goel and Thakor (2000), Schelling (1960), and Van den Steen (2005).”
Walking the Talk on Diversity: CEO Beliefs, Moral Values, and the Implementation of Workplace Diversity Practices (2018, background): “When CEOs communicate their beliefs consistently and over time, organizational members begin to develop expectations about the strategic priorities of their CEOs (Bertsch and Williams 1994; O’Reilly 1989; Van den Steen 2005).”
Powerful CEOs and Their Impact on Corporate Performance (2005, unknown): “…managers may make good or bad decisions due to human fallibility (Sah, 1991; Sah and Stiglitz, 1991; Bhidé, 2001) or because they are overconfident (Heaton, 1998; Goel and Thakor, 2000) or have different “visions” (Rotemberg and Saloner, 2000; Van den Steen, 2001; Hart and Holmstrom, 2002).”
Team theory, garbage cans and real organizations: some history and prospects of economic research on decision‐making in organizations (2003, background): “In fact, there are recent economic models of managerial ‘vision’ that analyze how life can indeed be easier for organizations with ‘consistent, shared goals’ (Rotemberg and Saloner, 2000; Van den Steen, 2002 ).”
Coworker Complementarity and the Stability of Top-Management Teams (2005, unknown): “4.3 Skills that Complement Strategy CEO and managerial turnover may be associated if executives invest in or possess skills that complement the firm’s strategy or business practices (see, e.g., Van den Steen, 2005).”
Competition, cooperation, and corporate culture (2011, background): “…papers have argued that different corporate cultures are the result of coordination (Kreps 1990), shared knowledge (Crémer 1993), asymmetric equilibria in the product market (Hermalin 1994), differences in firms’ initial conditions (Rob and Zemsky 2002), or shared beliefs (Van den Steen 2005a).”
The Role of Corporate Culture in Bad Times: Evidence from the COVID-19 Pandemic (2020, unknown): “Van den Steen (2005), (2010) shows that one way for firms to develop homogeneous beliefs (i.e., corporate culture) is screening: Firms hire employees whose beliefs andwork ethosmatch those of the firm.”
Groupthink: Collective Delusions in Organizations and Markets (2013, background): “In Van den Steen (2005), agents with diverse priors do not learn but instead sort themselves through the labor market.”