Organizational Beliefs and Managerial Vision

32 Pages Posted: 29 Aug 2001

See all articles by Eric Van den Steen

Eric Van den Steen

Harvard Business School - Strategy Unit

Multiple version iconThere are 2 versions of this paper

Date Written: July 2001

Abstract

This paper studies, in a world with differing priors, the role of organizational beliefs and managerial vision in the behavior and performance of corporations.

The paper defines vision operationally as a very strong belief by the manager about the right course of action for the firm. The interaction between employees' beliefs and the manager's vision influences decisions and determines employees' motivation and satisfaction. Through sorting in the labor market, the manager's vision also shapes organizational beliefs. Under weak conditions, a company's board should select a manager with stronger beliefs than its own, although spurious effects may make vision often look better than it really is.

The analysis shows that beliefs play an important role that goes beyond their information content. It also has implications for theories of corporate culture and business strategy.

Keywords: vision, organizational beliefs, culture, heterogeneous priors, differing priors

JEL Classification: D21, D80, J30, J41, L22, M10, M12, M14

Suggested Citation

van den Steen, Eric, Organizational Beliefs and Managerial Vision (July 2001). MIT Sloan Working Paper No. 4224-01. Available at SSRN: https://ssrn.com/abstract=278200 or http://dx.doi.org/10.2139/ssrn.278200

Eric Van den Steen (Contact Author)

Harvard Business School - Strategy Unit ( email )

Harvard Business School
Soldiers Field Road
Boston, MA 02163
United States

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