CEOs of firms facing poor financial performance consult internal advisers who are less likely to offer fresh insight, says study co-authored at Cambridge Judge Business School.
CEOs of companies facing poor financial performance are more apt to seek advice, but they show a preference for internal advisers who are less likely to offer fresh insight and more likely to confirm the CEO’s previous views. That’s the conclusion of a paper published in the Journal of Management co-authored by Professor Yasemin Kor of Cambridge Judge Business School, which is based on a review of 65 studies in high-impact academic journals or which have been heavily cited.
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The management implications of such “confirming” behavior are clear: “If CEOs have not already surrounded themselves with advisers who have a diverse set of perspectives and ideas, it may be too late to seek these in desperate times,” says the article.
For a fuller summary of the new paper: https://insight.jbs.cam.ac.uk/2020/confirming-behaviour
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