Skip to main content
SpringerLink
Log in

Debiasing illusion of control in individual judgment: the role of internal and external advice seeking

  • Original Paper
  • Published:
Review of Managerial Science Aims and scope Submit manuscript

Abstract

This paper builds on behavioral strategy and strategic decision making literatures to propose a stronger integration of information acquisition behaviors in debiasing research. We argue that the advice-seeking behavior of executives—as their dominant way of information acquisition—may have a fundamental effect on cognitive biases in individual judgment. Empirical results of a vignette-based survey of 186 top executives in German SMEs support this claim. We posit that internal and external advice affect individual judgment differently and that external advice, in particular, is likely to be effective for debiasing. These results suggest new avenues for debiasing research that go beyond the active intervention techniques that have been the focus of debiasing research thus far.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

References

  • Agle BR, Mitchell RK, Sonnenfeld JA (1999) Who matters to CEOs? An investigation of stakeholder attributes and salience, corporate performance, and CEO values. Acad Manag J 42(5):507–525

    Article  Google Scholar 

  • Agle BR, Nagarajan NJ, Sonnenfeld JA, Srinivasan D (2006) Does CEO charisma matter? An empirical analysis of the relationships among organizational performance, environmental uncertainty, and top management team perceptions of CEO charisma. Acad Manag J 49(1):161–174

    Article  Google Scholar 

  • Alexiev AS, Jansen JJP, Van den Bosch FAJ, Volberda HW (2010) Top management team advice seeking and exploratory innovation: the moderating role of TMT heterogeneity. J Manage Stud 47(7):1343–1364

    Google Scholar 

  • Arkes HR (1991) Costs and benefits of judgment errors: implications for debiasing. Psychol Bull 110(3):486–498

    Article  Google Scholar 

  • Atuahene-Gima K, Li H (2004) Strategic decision comprehensiveness and new product development outcomes in new technology ventures. Acad Manag J 47(4):583–597

    Article  Google Scholar 

  • Balkundi P, Harrison DA (2006) Ties, leaders, and time in teams: strong inference about network structure’s effects on team viability and performance. Acad Manag J 49:49–68

    Article  Google Scholar 

  • Barnes JH (1984) Cognitive biases and their impact on strategic planning. Strateg Manag J 5(2):129–137

    Article  Google Scholar 

  • Bazerman MH, Moore DA (2008) Judgment in managerial decision making. Wiley, Hoboken

    Google Scholar 

  • Belsley DA, Kuh E, Welsch R (1980) Regression diagnostics: identifying influential data and sources of collinearity. Wiley, New York

    Book  Google Scholar 

  • Blenko MW, Mankins MC, Rogers P (2010) The decision-driven organization. Harvard Bus Rev 88(6):54–62

    Google Scholar 

  • Bonaccio S, Dalal RS (2006) Advice taking and decision-making: an integrative literature review, and implications for the organizational sciences. Organ Behav Hum Decis Process 101(2):127–151

    Article  Google Scholar 

  • Bradfield RM (2008) Cognitive barriers in the scenario development process. Adv Dev Hum Resour 10(2):198–215

    Article  Google Scholar 

  • Carmeli A, Schaubroeck J (2006) Top management team behavioral integration, decision quality, and organizational decline. Leadersh Q 17(5):441–453

    Article  Google Scholar 

  • Chatterjee A, Hambrick DC (2007) It’s all about me: narcissistic chief executive officers and their effects on company strategy and performance. Adm Sci Q 52:351–386

    Google Scholar 

  • Churchill GA (1991) Marketing research: methodological foundations. Dryden, Chicago

    Google Scholar 

  • Cruz CC, Gómez-Mejia LR, Becerra M (2010) Perceptions of benevolence and the design of agency contracts: CEO-TMT relationships in family firms. Acad Manag J 53(1):69–89

    Article  Google Scholar 

  • Das TK, Teng B-S (1999) Cognitive biases and strategic decision processes: an integrative perspective. J Manag Stud 36(6):757–778

    Article  Google Scholar 

  • Druckman JN (2001) Using credible advice to overcome framing effects. J Law Econ Organ 17(1):62–82

    Article  Google Scholar 

  • Duhaime IM, Schwenk CR (1985) Conjectures on cognitive simplification in acquisition and divestment decision making. Acad Manag Rev 10(2):287–295

    Google Scholar 

  • Durand R (2003) Predicting a firm’s forecasting ability: the roles of organizational illusion of control and organizational attention. Strateg Manag J 24(9):821–838

    Article  Google Scholar 

  • Eddleston KA, Kellermanns FW, Sarathy R (2008) Resource configuration in family firms: linking resources, strategic planning and technological opportunities to performance. J Manag Stud 45(1):26–50

    Google Scholar 

  • Eisenhardt KM (1989) Making fast strategic decisions in high-velocity environments. Acad Manag J 32(3):543–576

    Article  Google Scholar 

  • Forbes DP (2007) Reconsidering the strategic implications of decision comprehensiveness. Acad Manag Rev 32(2):361–376

    Article  Google Scholar 

  • Fredrickson JW (1984) The comprehensiveness of strategic decisions processes: extension, observations, future directions. Acad Manag J 27(3):445–466

    Article  Google Scholar 

  • Fredrickson JW, Mitchell TR (1984) Strategic decision processes: comprehensiveness and performance in an industry with an unstable environment. Acad Manag J 27(2):399–423

    Article  Google Scholar 

  • Hambrick DC, Mason PA (1984) Upper echelons: the organization as a reflection of its top managers. Acad Manag Rev 9(2):193–206

    Google Scholar 

  • Hart S, Banbury C (1994) How strategy-making processes can make a difference. Strateg Manag J 15(4):251–269

    Article  Google Scholar 

  • Heyden MLM, van Doorn S, Reimer M, Van Den Bosch FAJ, Volberda HW (2013) Perceived environmental dynamism, relative competitive performance, and top management team heterogeneity: examining correlates of upper echelons’ advice-seeking. Organ Stud 34(9):1327–1356

  • Hodgkinson GP, Bown NJ, Maule AJ, Glaister KW, Pearman AD (1999) Breaking the frame: an analysis of strategic cognition and decision making under uncertainty. Strateg Manag J 20(10):977–985

    Article  Google Scholar 

  • Hodgkinson GP, Maule AJ, Bown NJ (2004) Causal cognitive mapping in the organizational strategy field: a comparison of alternative elicitation procedures. Organ Res Methods 7(1):3–26

    Article  Google Scholar 

  • Huff AS (1990) Mapping strategic thought. Wiley, Chichester

    Google Scholar 

  • Kahneman D, Klein G (2009) Conditions for intuitive expertise a failure to disagree. Am Psychol 64(6):515–526

    Article  Google Scholar 

  • Kahneman D, Lovallo D (1993) Timid choices and bold forecasts: a cognitive perspective on risk taking. Manage Sci 39(1):17–31

    Article  Google Scholar 

  • Kahneman D, Tversky A (1979) Prospect theory: an analysis of decision under risk. Econometrica 47(2):263–291

    Article  Google Scholar 

  • Kahneman D, Tversky A (2000) Choices, values, and frames. Cambridge University Press, Cambridge

    Google Scholar 

  • Karasz A, Mckinley PS (2007) Cultural differences in conceptual models of everyday fatigue a vignette study. J Health Psychol 12(4):613–626

    Article  Google Scholar 

  • Katz R, Allen TJ (1982) Investigating the not invented here (NIH) syndrome: a look at the performance, tenure, and communication patterns of 50 R & D project groups. R&D Manag 12(1):7–20

    Article  Google Scholar 

  • Langer EJ (1975) The illusion of control. J Pers Soc Psychol 32(2):311–328

    Article  Google Scholar 

  • Langer EJ (1983) The psychology of control. Sage, Beverly Hills

    Google Scholar 

  • Larrick RP (2004) Debiasing. In: Koehler DJ, Harvey N (eds) Blackwell handbook of judgment and decision making. Blackwell Publishing, Oxford

    Google Scholar 

  • Ling Y, Kellermanns FW (2010) The effects of family firm specific sources of TMT diversity: the moderating role of information exchange frequency. J Manage Stud 47(2):322–344

    Article  Google Scholar 

  • Ling Y, Simsek Z, Lubatkin MH, Veiga JF (2008) The impact of transformational CEOs on the performance of small- to medium-sized firms: does organizational context matter? J Appl Psychol 93(4):923–934

    Article  Google Scholar 

  • Lovallo D, Sibony O (2010) The case for behavioral strategy. McKinsey Q 2:30–43

  • Lubatkin MH, Simsek Z, Ling Y, Veiga JF (2006) Ambidexterity and performance in small-to medium-sized firms: the pivotal role of top management team behavioral integration. J Manag 32(5):646–672

    Google Scholar 

  • McDonald ML, Westphal JD (2003) Getting by with the advice of their friends: CEOs’ advice networks and firms’ strategic responses to poor performance. Adm Sci Q 48(1):1–32

    Article  Google Scholar 

  • McDonald ML, Khanna P, Westphal JD (2008) Getting them to think outside the circle: corporate governance, Ceos’ external advice networks, and firm performance. Acad Manag J 51(3):453–475

    Article  Google Scholar 

  • Meissner P, Wulf T (2013) Cognitive benefits of scenario planning: its impact on biases and decision quality. Technol Forecast Soc Change 80(4):801–814

  • Menon T, Thompson L, Choi H-S (2006) Tainted knowledge vs. tempting knowledge: people avoid knowledge from internal rivals and seek knowledge from external rivals. Manag Sci 52(8):1129–1144

    Article  Google Scholar 

  • Milkman KL, Chugh D, Bazerman MH (2009) How can decision making be improved? Perspect Psychol Sci 4(4):379–383

    Article  Google Scholar 

  • Miller D, Dröge C (1986) Psychological and traditional determinants of structure. Adm Sci Q 31(4):539–560

    Article  Google Scholar 

  • Miller CC, Burke LM, Glick WH (1998) Cognitive diversity among upper-echelon executives: implications for strategic decision processes. Strateg Manag J 19(1):39

    Article  Google Scholar 

  • Mussweiler T, Strack F, Pfeiffer T (2000) Overcoming the inevitable anchoring effect: considering the opposite compensates for selective accessibility. Pers Soc Psychol Bull 26(9):1142–1150

    Article  Google Scholar 

  • Podsakoff PM, MacKenzie SB, Lee J-Y, Podsakoff NP (2003) Common method biases in behavioral research: a critical review of the literature and recommended remedies. J Appl Psychol 88(5):879

    Article  Google Scholar 

  • Presson PK, Benassi VA (1996) Illusion of control: a meta-analytic review. J Soc Behav Personal 11(3):493–510

    Google Scholar 

  • Priem RL, Rasheed AMA, Kotulic AG (1995) Rationality in strategic decision processes, environmental dynamism and firm performance. J Manag 21(5):913–929

    Google Scholar 

  • Salancik GR, Pfeffer J (1977) Who gets power—and how they hold on to it: a strategic-contingency model of power. Org Dyn 5(3):2–21

    Article  Google Scholar 

  • Salk JE, Brannen MY (2000) National culture, networks, and individual influence in a multinational management team. Acad Manag J 43(2):191–202

    Article  Google Scholar 

  • Salomon JA, Tandon A, Murray CJL (2004) Comparability of self rated health: cross sectional multi-country survey using anchoring vignettes. BMJ 328(7434):258

    Article  Google Scholar 

  • Saunders C, Jones JW (1990) Temporal sequences in information acquisition for decision making: a focus on source and medium. Acad Manag Rev 15(1):29–46

    Google Scholar 

  • Schoemaker PJH (1993) Multiple scenario development: its conceptual and behavioral foundation. Strateg Manag J 14(3):193–213

    Article  Google Scholar 

  • Schulze WS, Lubatkin MH, Dino RN, Buchholtz AK (2001) Agency relationships in family firms: theory and evidence. Organ Sci 12(2):99–116

    Article  Google Scholar 

  • Schwenk CR (1984) Cognitive simplification processes in strategic decision-making. Strateg Manag J 5(2):111–128

    Article  Google Scholar 

  • Schwenk CR (1985) Management illusions and biases: their impact on strategic decisions. Long Range Plan 18(5):74–80

    Article  Google Scholar 

  • Schwenk CR (1988) The cognitive perspective on strategic decision making. J Manage Stud 25(1):41–55

    Article  Google Scholar 

  • Schwenk CR (1995) Strategic decision making. J Manag 21(3):471–493

    Google Scholar 

  • Simon M, Houghton SM, Aquino K (2000) Cognitive biases, risk perception, and venture formation: how individuals decide to start companies. J Bus Ventur 15(2):113–134

    Article  Google Scholar 

  • Simsek Z, Veiga JF, Lubatkin MH, Dino RN (2005) Modeling the multilevel determinants of top management team behavioral integration. Acad Manag J 48(1):69–84

    Article  Google Scholar 

  • Sniezek JA, Van Swol LM (2001) Trust, confidence, and expertise in a judge-advisor system. Organ Behav Hum Decis Process 84(2):288–307

    Article  Google Scholar 

  • Soll JB (1999) Intuitive theories of information: beliefs about the value of redundancy. Cogn Psychol 38(2):317–346

    Article  Google Scholar 

  • Soll JB, Larrick RP (2009) Strategies for revising judgment: how (and how well) people use others’ opinions. J Exp Psychol Learn Mem Cogn 35(3):780–805

    Article  Google Scholar 

  • Srivastava MK, Gnyawali DR (2011) When do relational resources matter? Leveraging portfolio technological resources for breakthrough innovation. Acad Manag J 54(4):797–810

    Article  Google Scholar 

  • Stolte JF (1994) The context of satisficing in vignette research. J Soc Psychol 134(6):727–733

    Article  Google Scholar 

  • Thomas JB, Clark SM, Gioia DA (1993) Strategic sensemaking and organizational performance: linkages among scanning, interpretation, action, and outcomes. Acad Manag J 36(2):239–270

    Article  Google Scholar 

  • Thompson T, Barbour R, Schwartz L (2003) Adherence to advance directives in critical care decision making: vignette study. BMJ 327(7422):1011

  • Wally S, Baum JR (1994) Personal and structural determinants of the pace of strategic decision making. Acad Manag J 37(4):932–956

    Article  Google Scholar 

  • Wang L, Zajac EJ (2007) Alliance or acquisition? A dyadic perspective on interfirm resource combinations. Strateg Manag J 28(13):1291–1317

    Article  Google Scholar 

  • Wright G, Goodwin P (2002) Eliminating a framing bias by using simple instructions to ‘think harder’ and respondents with managerial experience: comment on ‘breaking the frame’. Strateg Manag J 23(11):1059–1067

    Article  Google Scholar 

  • Yaniv I (2004) Receiving other people’s advice: influence and benefit. Organ Behav Hum Decis Process 93(1):1–13

    Article  Google Scholar 

  • Zajac EJ, Bazerman MH (1991) Blind spots in industry and competitor analysis: implications of interfirm (mis)perceptions for strategic decisions. Acad Manag Rev 16(1):37–56

    Google Scholar 

  • Zellweger TM, Kellermanns FW, Chrisman JJ, Chua JH (2011) Family control and family firm valuation by family CEOs: the importance of intentions for transgenerational control. Organ Sci 23(3):851–868

    Article  Google Scholar 

Download references

Acknowledgments

We thank Tomi Laamanen, Thomas Hutzschenreuter, and Peter Kesting for their valuable comments on earlier versions of this manuscript. In addition, we would like to thank editor Wolfgang Kürsten as well as the two anonymous reviews for their extremely helpful feedback on the article.

Author information

Authors and Affiliations

  1. Chair of Strategic and International Management, Philipps-University Marburg, Universitätsstr. 24, 35037, Marburg, Germany

    Philip Meissner & Torsten Wulf

Authors
  1. Philip Meissner
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Torsten Wulf
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Torsten Wulf.

Appendix: Questionnaire and variable scales

Appendix: Questionnaire and variable scales

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Meissner, P., Wulf, T. Debiasing illusion of control in individual judgment: the role of internal and external advice seeking. Rev Manag Sci 10, 245–263 (2016). https://doi.org/10.1007/s11846-014-0144-6

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s11846-014-0144-6

Keywords

JEL Classification

Search

Navigation