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

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.

[1]  K. Gordon,et al.  Group judgments in the field of lifted weights. , 1924 .

[2]  James E. Boyce.  COMPARISON OF METHODS OF COMBINING SCORES TO PREDICT ACADEMIC SUCCESS IN A COOPERATIVE ENGINEERING PROGRAM , 1955 .

[3]  H. Simon,et al.  Rational choice and the structure of the environment. , 1956, Psychological review.

[4]  A. Wesman,et al.  Multiple Regression vs. Simple Addition of Scores in Prediction of College Grades , 1959 .

[5]  C. H. Lawshe,et al.  The Relative Efficiency of four Test Weighting Methods in Multiple Prediction , 1959 .

[6]  Robert B. Zajonc,et al.  Social psychology : an experimental approach , 1966 .

[7]  P. Lawrence,et al.  Organization and environment , 1967 .

[8]  An Experimental Study of Risk-Taking and the Value of Information in a New Product Context , 1967 .

[9]  Frank L. Schmidt,et al.  The Relative Efficiency of Regression and Simple Unit Predictor Weights in Applied Differential Psychology , 1971 .

[10]  John G. Claudy.  A Comparison of Five Variable Weighting Procedures , 1972 .

[11]  J. Wiginton.  MSAE estimation: An alternative approach to regression analysis for economic forecasting applications , 1972 .

[12]  R. Duncan.  Characteristics of Organizational Environments and Perceived Environmental Uncertainty. , 1972 .

[13]  A. Tversky,et al.  On the psychology of prediction , 1973 .

[14]  Henry L. Tosi,et al.  On the Measurement of the Environment: An Assessment of the Lawrence and Lorsch Environmental Uncertainty Subscale , 1973 .

[15]  Barr Rosenberg,et al.  Error Rates in CRSP and Compustat Data Bases and their Implications , 1974 .

[16]  J. Slocum,et al.  Environmental Uncertainty: The Construct and Its Application , 1975 .

[17]  R. Hogarth,et al.  Unit weighting schemes for decision making , 1975 .

[18]  R. Payne,et al.  Organizational structure and climate , 1976 .

[19]  Robyn M. Dawes,et al.  Suppose We Measured Height With Rating Scales Instead of Rulers , 1977 .

[20]  F. Drasgow,et al.  Alternative weighting schemes for linear prediction , 1978 .

[21]  Nils Brunsson.  THE IRRATIONALITY OF ACTION AND ACTION RATIONALITY: DECISIONS, IDEOLOGIES AND ORGANIZATIONAL ACTIONS , 1982 .

[22]  S. Kiesler,et al.  Managerial Response to Changing Environments: Perspectives on Problem Sensing from Social Cognition. , 1982 .

[23]  Gregory G. Dess,et al.  Measuring organizational performance in the absence of objective measures: The case of the privately-held firm and conglomerate business unit , 1984 .

[24]  L. Bourgeois.  STRATEGIC GOALS, PERCEIVED UNCERTAINTY, AND ECONOMIC PERFORMANCE IN VOLATILE ENVIRONMENTS , 1985 .

[25]  Barbara W. Keats,et al.  Environmental Assessment and Organizational Performance: An Exploratory Field Study. , 1987 .

[26]  Spyros Makridakis,et al.  Confidence intervals: An empirical investigation of the series in the M-competition , 1987 .

[27]  David V. Budescu,et al.  Decisions based on numerically and verbally expressed uncertainties. , 1988 .

[28]  Uncertainty and predictive accuracy: an empirical study , 1988 .

[29]  Frances J. Milliken,et al.  Executives’ Perceptual Filters: What They Notice and How They Make Sense , 1988 .

[30]  John M. Jermier,et al.  Reactions to physically dangerous work: A conceptual and empirical analysis , 1989 .

[31]  R. Baumeister.  The Optimal Margin of Illusion , 1989 .

[32]  William H. Starbuck,et al.  Innocents in the Forest: Forecasting and Research Methods , 1990 .

[33]  Alan D. Meyer,et al.  Visual Data in Organizational Research , 1991 .

[34]  Frances J. Milliken,et al.  The role of managerial learning and interpretation in strategic persistence and reorientation: An empirical exploration , 1992 .

[35]  Gregory G. Dess,et al.  Divergence between Archival and Perceptual Measures of the Environment: Causes and Consequences , 1993 .

[36]  K. Sutcliffe.  What Executives Notice: Accurate Perceptions in Top Management Teams , 1994 .

[37]  David L. Shapiro,et al.  On the Psychology of , 1996 .