Opening Pandora's Box: Studying the Accuracy of Managers' Perceptions

Abstract

Both researchers and managers depend on the accuracy of managers' perceptions. Yet, few studies compare subjective with"objective" data, perhaps because it is very difficult to do well. These difficulties also muddy interpretations of results. Onone hand, studies suggest that managers' perceptions may be very inaccurate. On the other hand, the observed errors inmanagerial perceptions may arise from research methods instead of managers.Because perceptual data are so significant for both researchers and managers, researchers need to understand both thepotential contaminants of perceptual research and the determinants of perceptual errors and biases. This article reviewsstudies of the accuracies of managers' perceptions, points out hazards in such research, and suggests various ways toimprove studies of perceptions. The suggestions encompass improvements in gathering more valid subjective data, locatingmore appropriate "objective" data, finding appropriate respondents, and using statistical methods that provide accurate andreliable estimates with small samples.