The Origin of Failure: A Multidisciplinary Appraisal of the Hubris Hypothesis and Proposed Research Agenda

Abstract

The hubris hypothesis complements the extant debate on how people make judgments and decisions in organizations. Drawing on the origin of hubris in Greek mythology, the psychological approach, and finance studies, this paper portrays an informed picture of the current status of managerial hubris literature that develops a more advanced understanding of what is known about hubris. We present a conceptual map that provides a comprehensive appreciation of hubris antecedents-symptoms-strategic choices-feedback performance main cause effect relationships. Our proposed conceptual map draws on the idea that managerial hubris is one of the determinants of CEO judgments, strategic choices, and organizational performance. We also show that managerial hubris has a good side and a bad side and identify the implications for strategy formulation and implementation. By doing so, the study not only provides a multidisciplinary introduction to hubris that is tailored to scholars, but also distills a suite of suggestions for managing hubris symptoms and traps that may prove valuable to practitioners.

Management Practices as Capabilities Leading to Superior Performance

“…The relationship was highly significant with a standardized regression coefficient of -0.63 and the final regression explained 72% of the variance in the level of management practices. This finding builds on the literature about positive and negative effects of managerial hubris on different organizational outcomes (Hiller & Hambrick, 2005;Picone et al, 2014;Tang et al, 2015).…”

“…Hubris negatively influences the evolution of management practices. As Picone et al (2014) assert, managerial hubris "brings crystallization in managerial practices" (p. 456). The overconfidence of managers can influence their decisions (Li & Tang, 2010) and cause them to lower the efforts and resources allocated to improving management practices, which can in turn significantly reduce the chances of achieving superior levels of management practices.…”

“…This finding builds on recent literature on the effects of senior management hubris on organizational outcomes (Ou, Waldman, & Peterson, 2015;Picone, Dagnino, & Minà, 2014;Tang, Li, & Yang, 2015).…”

“…Picone, Dagnino and Minà (2014) argue that CEO's overestimation of own abilities and performance brings crystallization in managerial practices. In other words, executives prefer to follow recipes already used in their previous experience which have been successful in achieving exceptional performance.…”

Teaching Leadership Critically: New Directions for Leadership Pedagogy

“…In terms of content, critical courses go beyond the romanticized assumptions of practices, and the negative consequences of certain leadership dynamics. Critical courses also investigate the damaging effects of over-conformity to destructive behavioural norms, the promotion of monocultures that can stifle critical feedback and the extent and dangers of 'executive hubris' (Picone et al, 2014).…”