Managerial myopia: Self-serving biases in organizational planning.

Recent work indicates that people hold a variety of self-serving biases, be-lieving themselves more capable than they are in fact. Such biases, if ex-tended to the organizational level, would lead to overly optimistic planning for the future. This prediction was tested with two groups of management students and with a sample of corporate presidents. The management students consistently overestimated their abilities; in a marketing exercise, they like-wise indicated that a hypothetical firm, of which they were sales managers, would quickly overtake established competition. The executive sample also predicted inordinate success; the latter group, however, moderated projections somewhat if prior planning experience had been unsatisfactory. The impor-tance of managerial myopia to considerations of marketing, resource manage-ment, and demarketing is discussed. During the past decade, a number of re-searchers have noted that individuals often view themselves more favorably than seems