Successful leadership depends on the confidence to rally support, win allies, and deter competitors. However, overconfident leaders have led their companies into disaster. This article identifies the circumstances in which leaders are most prone to overconfidence and its concomitant risks. On the flip side, it explores those circumstances under which confidence is most conducive to success. Using insights from recent research, the article provides recommendations on how managers can avoid the pitfalls of overconfidence while benefiting from the advantages of confidence.
- Decision making
- Organizational behavior
- Securities trading
The authors would like to thank Linda Dong and Joe Mazzella for their help in finding examples of overconfidence. The first author would also like to thank California Management Review for financial support during his second year of graduate school.
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