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. On one hand, studies suggest that managers' perceptions may be very inaccurate. On the other hand, the observed errors in managerial 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 the potential contaminants of perceptual research and the determinants of perceptual errors and biases. This article reviews studies of the accuracies of managers' perceptions, points out hazards in such research, and suggests various ways to improve studies of perceptions. The suggestions encompass improvements in gathering more valid subjective data, locating more appropriate "objective" data, finding appropriate respondents, and using statistical methods that provide accurate and reliable estimates with small samples.Information Systems Working Papers Serie

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. On one hand, studies suggest that managers' perceptions may be very inaccurate. On the other hand, the observed errors in managerial 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 the potential contaminants of perceptual research and the determinants of perceptual errors and biases. This article reviews studies of the accuracies of managers' perceptions, points out hazards in such research, and suggests various ways to improve studies of perceptions. The suggestions encompass improvements in gathering more valid subjective data, locating more appropriate "objective" data, finding appropriate respondents, and using statistical methods that provide accurate and reliable estimates with small samples.Information Systems Working Papers Serie

Country level corruption as a liability of foreignness: effects on staffing, incentives, and activities

Past research examining country-level corruption found that corruption reduces foreign direct investment. However, this research lacks implications for multinational corporations considering operating in high corruption countries. Recent international research has examined subsidiary challenges beyond initial investment decisions, but has not addressed operational challenges posed by corruption. Research investigating country-level corruption as a liability of foreignness (LOF) is needed because this theoretical perspective specifically examines mechanisms for managing and controlling subsidiaries. This paper utilizes the LOF perspective, integrating learning, international human resource management, and agency theories, to understand how corruption affects subsidiary adaptation strategies

How to identify liabilities of foreignness and assess their effects on multinational corporations

This article examines the liabilities of foreignness construct and discusses key methodological and research design issues facing liability of foreignness researchers. After reviewing past studies and more recent liabilities of foreignness research, I discuss definitional issues related to this construct. I then present a two-part research framework designed to first help identify a specific liability of foreignness in a focal country, and then help identify factors that minimize the effects of that specific liabilities of foreignness. I also discuss multinational management issues at the corporation level that likely affect liabilities of foreignness experienced at the foreign subsidiary level

How to identify liabilities of foreignness and assess their effects on multinational corporations

This article examines the liabilities of foreignness construct and discusses key methodological and research design issues facing liability of foreignness researchers. After reviewing past studies and more recent liabilities of foreignness research, I discuss definitional issues related to this construct. I then present a two-part research framework designed to first help identify a specific liability of foreignness in a focal country, and then help identify factors that minimize the effects of that specific liabilities of foreignness. I also discuss multinational management issues at the corporation level that likely affect liabilities of foreignness experienced at the foreign subsidiary level.Liability of foreignness Foreign direct investment Foreign subsidiaries Multinational management