Understanding hubris and heuristics in CEO decision-making: Implications for management

Abstract

This paper seeks to provide insight into the link between CEO hubris and heuristics. It presents a review of academic literature pertaining to personality, hubris and heuristics, and a review of these domains leads to the development of a conceptual model that allows for a better understanding of the relationship between these constructs. The theoretical part of the paper is followed by short case studies on four CEOs (Steve Jobs, Howard Schultz, Elon Musk, Jamie Dimon) that help to illustrate how CEO’s personality, hubris and heuristics can contribute to sub-optimal decision-making and, therefore, adverse organizational outcomes. Overall, this paper contributes to management literature by establishing a clear link between personality, hubris and heuristics. In addition, the paper’s practical implications allow mitigation against mis-judged heuristics and hubris fueled decisions in organizations.