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- Title
CEO过度自信与战略变革 --基于" 韧性效应" 和" 创造效应" 的研究.
- Authors
韵 江; 宁 鑫; 暴 莹
- Abstract
In recent years, uncertain events and unexpected changes in the general environment have been increasing, which have undoubtedly increased the operational pressure on companies, affected the realization of strategic targets, and even jeopardized the function and survival of organizations. In particular, many organizations are caught in operational difficulties and uncertainties due to the outbreak of the COVID-19 pandemic. However, in the face of adverse circumstances (major unexpected changes, operational difficulties or financial crises), some enterprises are able to quickly get out of the difficulty through their own strategic changes and even gain new opportunities and development, while some are unable to cope with it and gradually decline or even collapse. This reflects that many previous studies have overemphasized the influence of objective organizational conditions, both inside and outside, while not paying sufficient attention to the primary effect of internal organizational change. Indeed, when executives within an organization perceive adversity, whose cognition may generate strong motivation to initiate and achieve change to dynamically adapt to stress or distress. Therefore, executives' cognition and decision-making characteristics are emerging as important cues for strategic change research. Among the cognitive characteristics of executives, CEO overconfidence is a direction that deserves special research. According to behavioral finance research, the cognitive biases resulting from overconfidence are important irrational factors influencing corporate decisions under uncertainty, such as inefficient investment, financial fraud, and merger & acquisition premium. However, most existing studies focus on the "dark side" of overconfidence, which is the negative consequences of overconfidence. Few studies have addressed the positive consequences of overconfidence. In order to alleviate the above research deficiencies, this paper focuses on strategic change activities with high adaptability and growth, and deeply explores the mechanism of overconfidence in the process of strategic change. Based on the upper echelons theory and the resource-based view, this paper empirically analyzes the effects and mechanism of CEO overconfidence on strategic change. The findings are as follows. At the beginning, CEO overconfidence plays a positive role in facilitating strategic change, indicating that CEO overconfidence has a positive effect. Then, the effect of CEO overconfidence on strategic change is more pronounced when faced with higher levels of internal business distress (historical operational gap and industrial aspiration gap) and external environmental pressure (environmental uncertainty), showing the resilience effect. Further research shows that the positive effect of CEO overconfidence on strategic change is partly realized by strengthening the entrepreneurial orientation of enterprises, which shows the creation effect. At the same time, the effect of CEO overconfidence on entrepreneurial orientation is more significant when there is high environmental uncertainty and low industrial aspiration gap. It is also found that CEO overconfidence can enhance the dynamic adaptation to the environment by promoting strategic change, and then enhance corporate growth. In addition, CEO overconfidence has a certain lag and continuity in the strategic change upgrading, which is mainly concentrated in the two-year period after the implementation of the change, but the impact diminishes over time. Compared to previous literature, the contributions of this paper are mainly in the following four aspects. Firstly, this paper breaks through the negative-negative research stereotype of overconfidence. By exploring the positive consequences of overconfidence, it enriches and expands relevant literature in the field of the economic consequences of overconfidence and the influencing factors of strategic change, which provides a new research direction for the investigation of the influencing factors of strategic change from the cognitive perspective. Secondly, this paper expands the research perspective of organizational resilience, which is helpful to understand the representation of organizational resilience at all levels and fits the research trend of positive psychology. This research examines the triggering effect of adverse situations on overconfidence from two dimensions: business difficulty (performance-aspiration gap) and environmental stress (environmental uncertainty), testing the resilience effect of overconfidence based on a process theory perspective. Thirdly, it enriches the research on the inner influence path of the upper echelons theory, and makes a beneficial exploration to reveal the black box of the upper echelons theory. By integrating the views of entrepreneurial orientation and organizational creativity, the study finds that CEO overconfidence has a creative effect on strategic change. Fourthly, it deepens the research on the relationship between organization and environment, which provides theoretical insights for enterprises to improve their adaptability and maintain their growth and development when facing crisis situations. To some extent, the study reveals the potential "bright side" of CEO overconfidence, which is useful for drawing attention to the value creation effect of overconfidence, and providing practical insights for enterprises to effectively drive strategic change from the inside, actively cope with difficulties and promote enterprise growth in the face of setbacks and pressure. For the enterprises in the midst of operational difficulties and uncertainties, only by shaping positive and confident beliefs and mental models, using resilience and creativity to enhance organizational vitality and change incentive, and paying attention to the reallocation and adjustment of organizational resources and strategic paths, maintaining corporate growth, can they turn the corner and even transform crises into opportunities.
- Publication
Nankai Business Review, 2022, Vol 25, Issue 5, p180
- ISSN
1008-3448
- Publication type
Article