Strategic Management Journal

Strat. Mgmt. J., 26: 297–319 (2005)

Published online in Wiley InterScience (www.interscience.wiley.com). DOI: 10.1002/smj.455

CONCEPTUALIZING EXECUTIVE HUBRIS: THE ROLE

OF (HYPER-)CORE SELF-EVALUATIONS IN
STRATEGIC DECISION-MAKING
NATHAN J. HILLER1 and DONALD C. HAMBRICK2 *
1
College of Arts and Sciences, Florida International University, Miami, Florida, U.S.A.
2
Smeal College of Business Administration, Pennsylvania State University, University
Park, Pennsylvania, U.S.A.

Researchers have long been interested in how an executive’s self-concept affects his or her behav-
iors, but have lacked a theoretically grounded, validated construct for conducting systematic
inquires. The concept of ‘core self-evaluation’ (CSE), which has been recently validated in the
psychology literature, concisely encompasses and consolidates the common, overlapping portions
of four previously unconnected personality dimensions: self-esteem, self-efficacy, locus of con-
trol, and emotional stability. CSE has great potential to provide substantial leverage for research
on executive self-concept. We review and reconcile prior research on related constructs in exec-
utive settings (including narcissism, hubris, and overconfidence) and argue that CSE should be
adopted as a robust, well-validated umbrella construct for research on executive self-concept.
Indeed, a very high level of CSE, or hyper-CSE, aligns closely with what is often colloquially
called ‘hubris.’ We anticipate that hyper-CSE executives—who possess supreme levels of self-
confidence, self-potency, and conviction that they will prevail—will manifest this trait in their
job behaviors. We develop a set of integrated propositions that describe the implications of CSE
for strategic decision processes, strategic choices, and organizational performance. Finally, we
propose additional avenues for research. Copyright  2005 John Wiley & Sons, Ltd.

All the extraordinary men I have known were
extraordinary in their own estimation.
Woodrow T. Wilson
The most useful thing I learned was to be humble
...
Larry Bossidy, Former CEO of Allied Signal
Among the most central, fundamental components
of individuals is the basic conviction they have in
themselves. As the two quotations above indicate,
conflicting views exist about the merits of positive
Keywords: upper echelons; core self-evaluation; hubris;
executive self-perceptions; decision speed; strategic per-
sistence
*Correspondence to: Donald C. Hambrick, Smeal College of
Business Administration, The Pennsylvania State University,
440 Beam Business Administration Building, University Park,
PA 16802, U.S.A. E-mail: dch14@psu.edu
self-concept. This tension is especially relevant in
the top executive arena. On the one hand, execu-
tives who have highly positive self-assessments are
thought to be able to create and seize opportunities
and to motivate their organizations in ways that
less confident executives cannot (Barnard, 1938;
Bass, 1990, Ch. 10; Keegan, 1987). But these
same executives may be likely to engage in unin-
formed or excessive risk-taking, grandiose initia-
tives, and acts of intimidation (Hayward and Ham-
brick, 1997; Kets de Vries, 1994; Van Velsor and
Leslie, 1995).
Although a substantial amount of research on
top executives has been conducted over the last
20 years (summarized in Finkelstein and Ham-
brick, 1996), scholars still only possess a frag-
mented understanding of the origins and implica-
tions of executive self-potency. A chief obstacle

Copyright  2005 John Wiley & Sons, Ltd. Received 14 January 2004
Final revision received 29 October 2004
298 N. J. Hiller and D. C. Hambrick
has been the absence of any rigorous conceptual
apparatus for conducting such inquiries. The few
attempts to explore executive self-potency have
invoked an array of disconnected concepts, includ-
ing those that address only narrow slices of overall
self-assessment (notably, locus of control) (Boone,
De Brabander, and Hellemans, 2000); colloquial
concepts that, despite intuitive appeal, lack rig-
orous psychological and methodological ground-
ing (hubris) (Hayward and Hambrick, 1997); psy-
chopathological concepts that are difficult to oper-
ationalize beyond clinical settings (narcissism)
(Lubit, 2002); and constructs that describe exec-
utive self-concept only on a post hoc basis (over-
confidence) (Malmendier and Tate, 2003).
Recently, psychologists have made considerable
progress in identifying and validating a fundamen-
tal construct that holds considerable promise for
advancing theory and research on executive self-
assessment. Specifically, Timothy Judge and co-
authors have developed the concept of ‘core self-
evaluation’ to describe how individuals broadly
evaluate themselves and their relationship to their
environment across situations (Judge, Locke, and
Durham, 1997). This concept, which has been
extensively validated over the last 5 years with a
wide array of subject samples, has the advantage
of providing considerable parsimony for theory-
building in the area of self-assessment. Findings
indicate that the concept of core self-evaluation
(CSE) concisely encompasses and consolidates
the common, overlapping portions of four well-
studied, but heretofore unconnected, concepts: self-
esteem, self-efficacy, locus of control, and emo-
tional stability (Judge, Bono, Erez, Locke and
Thoresen, 2002; Judge, Erez, Bono, and Thore-
sen, 2002; Judge, Erez and Bono, 1998). These
four concepts are not identical, but they do share
significant conceptual similarities, and it is this
area of similarity that constitutes the basic, fun-
damental assessment an individual makes of one-
self. As we shall discuss below, Judge and col-
leagues have found that CSE leads to more potent
and parsimonious predictions of individual behav-
iors and outcomes than do the individual vari-
ables.
Although several papers have identified, vali-
dated, and applied the CSE concept, its relevance
for the study of top executives and their behav-
ior has not been considered. Applying CSE to
the executive arena does not involve an obvi-
ous, linear transposition. Judge’s work has focused
Copyright  2005 John Wiley & Sons, Ltd.
primarily on the liabilities of having too lit-
tle CSE, or on the benefits of having a req-
uisite, threshold level of CSE. In a variety of
samples, those people who evaluated themselves
positively were more satisfied with work, per-
formed better, and dealt with upheaval better
than those lacking such self-assessments (Erez
and Judge, 2001; Judge, Erez, and Bono, 1998;
Judge, Locke, Durham, and Kluger, 1998; Judge,
Thoresen, Pucik, and Welbourne, 1999). As such,
Judge and co-authors have not had much spe-
cific interest in the upper end of their scale
and, particularly, have not considered the impli-
cations of having an extraordinarily high level
of CSE.
Stereotypes aside, there is reason to expect that
many executives have relatively high CSE, and a
significant proportion may have exceptionally high
CSE, or ‘hyper-CSE.’ As we shall argue, execu-
tive behaviors at the very upper reaches of the CSE
scale may not conform to Judge’s ‘more is better’
thesis. For example, we anticipate that hyper-CSE
executives are inclined to take grandiose actions
that can easily lead to catastrophic results—as a
result of their personal conviction that they can
do no wrong (or fix all wrongs that may turn
up). Thus, the high end of the CSE scale aligns
very well with what is colloquially called ‘hubris.’
Judge and co-authors may have laid the foundation
for rigorous examination of the syndrome that to
the ancient Greeks was ‘man’s capital sin’ (Hay-
ward and Hambrick, 1997).
Our paper is organized as follows. In the next
section we provide an overview of the CSE
construct, including discussion of its conceptual
underpinnings and validity. Next, we introduce the
idea of applying CSE to the study of executives;
we address research that has dealt with related con-
structs, including hubris, narcissism, locus of con-
trol, and overconfidence. We then develop proposi-
tions regarding the strategic decision-making pro-
cesses, strategic choices, and performance conse-
quences that follow from high-CSE executives. We
limit our propositions only to those dealing with
strategic decision-making and performance, omit-
ting for now consideration of the potentially impor-
tant effect of CSE on executives’ leadership behav-
iors and interactions with others. Next, we discuss
the issues associated with measurement of CSE
in executives, suggesting some refinements and
accompaniments to existing measures. We close
with a brief inventory of research opportunities.
Strat. Mgmt. J., 26: 297–319 (2005)
 Core Self-Evaluations in Strategic Decision-Making 299

THE CONCEPT OF CORE or ‘central,’ trait, underlying and causing more

SELF-EVALUATION ‘peripheral’ traits1 (Cattell, 1965; Rokeach, 1972).

A core self-evaluation (CSE) is a deeply sourced

dispositional trait that defines how we evaluate
ourselves and our relationship with the environ-
ment (Judge, Bono, Erez, Locke, and Thoresen,
2002). Thus, CSE is a relatively enduring and fun-
damental evaluation of oneself as an individual,
essentially akin to ‘self-concept’ (Judge, Thore-
sen, Pucik, and Welbourne, 1999). At a basic
level, the high-CSE person is characterized by self-
confidence, self-worth, self-potency, and freedom
from anxiety.
In developing the CSE concept, Judge and his
colleagues (Judge, Locke, and Durham, 1997)
searched domains including philosophy, as well
as clinical, developmental, personality, and social
psychology, and distilled a common theme about
appraisals of the self running throughout these
literatures. After examining various existing per-
sonality traits that might be partial indicators of
this overarching concept, they empirically exam-
ined and found evidence for the existence of
a widely held, basic appraisal of the self: a
core self-evaluation (CSE). Since its initial con-
ceptualization, numerous top-tier journal publi-
cations, based upon a variety of samples from
four continents (including Europe, Asia, Australia,
and North America), have indicated that CSE
is the common core, or central factor, of four
heavily studied human qualities: (a) self-esteem,
(b) generalized self-efficacy, (c) locus of control,
and (d) emotional stability (which is sometimes
known by its opposite, neuroticism). That the CSE
trait is fundamental means that it is a ‘source,’
Validity of the CSE concept
Thousands of studies have investigated the four
traits that make up CSE. Yet, only a small pro-
portion of these studies has considered more than
one at a time, and almost none considered all of
them simultaneously or as representative of an
underlying construct—until the concept of CSE
was proposed. Since then, there is mounting evi-
dence that the four individual traits all impor-
tantly contribute to a latent unitary construct (Erez
and Judge, 2001; Judge, Erez, Bono, and Thore-
sen, 2002; Judge, Thoresen, Pucik, and Welbourne,
1999; Judge, Locke, Durham, and Kluger, 1998).
Table 1 (left-hand side) presents meta-analytic
population estimates of the correlations (from
Judge, Erez, Bono, and Thoresen, 2002) among the
four component variables, based on a total of 127
primary study correlations and 33,854 individual
relationships. Using these estimates of the popula-
tion correlations, the right-hand side of the table
presents standardized factor loadings on the CSE
construct. As shown, the four component variables
are substantially related to each other, and each of
them loads onto the CSE construct well above the
generally accepted minimum threshold of 0.4.
As a way to clarify the relationship between
the four components and CSE, we present a styl-
ized schematic as Figure 1. We emphasize that
1
For example, the deeply held source trait of dominance may be
considered as a primary cause of arrogance (a peripheral trait;
Judge et al., 1997).

Table 1. Meta-analytic relationships between self-esteem, generalized self-efficacy, emotional sta-

bility, and locus of control, and factor loading on CSE construct

Self-esteem Gen. self- Emotional Standardized factor

efficacy stability loading on CSE
construct

Self-esteem — 0.92
Generalized self-efficacy 0.85 — 0.93
Emotional stability 0.64 0.62 — 0.68
Locus of control 0.52 0.56 0.40 0.59

Values for the correlation table are taken from Judge, Erez, Bono, and Thoresen’s (2002) meta-analysis of
studies reporting correlations between at least two of the CSE component traits. The population estimates for
the correlations are based on a total of 127 primary-study correlations, representing 33,854 individuals. Factor
loadings of each trait on the CSE construct were computed using LISREL 8.5 and are based on the meta-analytic
correlation matrix; harmonic mean N = 3362.

Copyright  2005 John Wiley & Sons, Ltd. Strat. Mgmt. J., 26: 297–319 (2005)
300 N. J. Hiller and D. C. Hambrick
Figure 1. Qualitative portrayal of the conceptual space occupied by CSE
this figure is not meant to represent the quanti-
tative relationships involved, but rather is a qual-
itative aid to help explain the CSE construct. As
Figure 1 portrays (and as follows from Table 1),
the four component variables overlap considerably,
and CSE is at the core, or center, of their over-
lap. This schematic also allows us to point out
that there are aspects of the four component vari-
ables that fall outside of, and do not contribute
to, CSE. For example, locus of control (LOC)
gauges the degree to which a person feels that life’s
events are within his or her control. LOC is not
meant to capture the degree to which the person
believes that his or her actions will generate pos-
itive outcomes. Still, there is probably some part
of LOC that captures that belief; after all, those
most inclined to believe that their actions will mat-
ter also tend to believe that their actions will lead
to salutary results. It is that part of LOC, then,
that conceptually loads onto CSE. Thus, CSE does
Copyright  2005 John Wiley & Sons, Ltd.
not encompass the entirety of all four constructs.
Rather, CSE represents a significant and common
core of the four component traits.
Beyond evidence that all four component traits
load highly on the CSE construct, research has
shown that this higher-order factor is more predic-
tive of a variety of job behaviors and outcomes
than are the four component traits. For exam-
ple, CSE has been shown to be more consistently
and strongly related to job performance and sat-
isfaction, motivation, stress, and other personality
measures (such as conscientiousness and extrover-
sion) than are the four individual traits (Erez and
Judge, 2001; Judge, Erez, Bono, and Thoresen,
2002; Judge et al., 2003). Whether CSE is entered
into regression models before or after the compo-
nent traits, its effects generally dominate the four
individual dimensions. These results suggest that
the higher-order CSE construct is a better predic-
tor than the component traits used in isolation; both
Strat. Mgmt. J., 26: 297–319 (2005)
 Core Self-Evaluations in Strategic Decision-Making
parsimony and explanatory power are greatly aided
by its use.
Four component traits
Because CSE is at the core, or captures the overlap,
of four human traits, it is important to review those
component concepts in order to better understand
CSE. Self-esteem, conceptually the most central
component of CSE (Judge et al., 1997), is an indi-
vidual’s global evaluation of self-worth (Baumeis-
ter, Smart, and Boden, 1996). Self-esteem refers
to an individual’s overall self-acceptance, self-
liking, and self-respect (Harter, 1990), and it has
been related to various outcomes in non-executive
samples, including: successful handling of jobs
with ambiguous roles (Jex and Elacqua, 1999);
acceptance of change (Wanberg and Banas, 2000);
motivation and organizational commitment (Hui
and Lee, 2000); resistance to influence (Brockner,
1988); and restricted information search and policy
experimentation (Knight and Nadel, 1986).
Self-efficacy refers to one’s belief in his or
her capability to successfully execute and per-
form tasks (Gist and Mitchell, 1992). Although
assessments of self-competence can vary some-
what depending on the task being performed (task-
specific self-efficacy), individuals possess a gener-
alized self-efficacy that is stable across domains
(Bandura, 1977). Most organizational research has
examined task-specific self-efficacy (e.g., Audia,
Locke, and Smith, 2000; Brown, Ganesan, and
Challagalla, 2001), but the limited literature on
generalized self-efficacy in non-executive sam-
ples has generally found relationships with overall
job performance and organizational commitment
(Gardner and Pierce, 1998), self-serving bias after
failure (Silver, Mitchell, and Gist, 1995), and cop-
ing with career-related events (Stumpf, Brief, and
Hartman, 1987).
Locus of control is the belief one holds about
who or what controls the occurrence of life events
(Rotter, 1954). Individuals with an internal locus of
control believe that their fate is determined by their
actions, whereas those with an external locus of
control believe that what happens to them is deter-
mined by factors outside of their control. In empir-
ical studies of general populations, internal locus
of control has been found to be positively related to
variables such as skill acquisition, transfer of train-
ing and job performance (Colquitt, Lepine, and
Noe, 2000), acceptance of organizational change
Copyright  2005 John Wiley & Sons, Ltd.
301
(Wanberg and Banas, 2000), and positive job atti-
tude following promotion (Lam and Schaubroeck,
2000). There is a significant literature investigat-
ing locus of control among executives, which we
will discuss below.
With origins in psychopathology, emotional sta-
bility has been identified as one of the ‘Big Five’
personality traits (Costa and McCrae, 1992) and
is sometimes known by its converse, neuroticism.
Because these labels can lead to various inter-
pretations, it is essential to understand that it is
anxiety that is at the heart of most measures of
this construct (Judge et al., 2003). Individuals who
score low on emotional stability (high on neuroti-
cism) are prone to worry, fear, stress, and feelings
of helplessness (Costa and McCrae, 1992); those
who score high have an absence of these qualities.
It is understandable, then, that emotional stabil-
ity covaries significantly with the other elements
of CSE. Individuals who have high self-esteem,
high self-efficacy, and an internal locus of con-
trol—those who are highly confident in their abil-
ities and who feel in control of their fate—have lit-
tle to worry or be anxious about. In organizational
research, emotional stability has been found to be
positively related to job performance (Ployhart,
Lim, and Chan, 2001), extrinsic career success
(Judge, Higgins, Thoresen, and Barrick, 1999), and
leadership emergence (Judge, Bono, Ilies, and Ger-
hardt, 2002).
CSE IN EXECUTIVES
Over the last 20 years, researchers have devoted
great effort to understanding how the character-
istics of executives are manifested in the strate-
gic choices they make and the performance they
deliver. The underlying premise of this research
has been that senior executives confront so many
stimuli, laden with so much ambiguity, that their
personal schemas—their values, experiences, per-
sonalities, and other human factors—greatly enter
into their interpretations of situations and the
choices they make. This stream of research, often
termed ‘the upper-echelons perspective,’ has relied
on a combination of executive demographic char-
acteristics (e.g., functional background and tenure
in the company; Bantel and Jackson, 1989) and
psychological constructs (e.g., tolerance for ambi-
guity and risk aversion; Gupta and Govindarajan,
Strat. Mgmt. J., 26: 297–319 (2005)
302 N. J. Hiller and D. C. Hambrick
1984) to predict organizational outcomes (Ham-
brick and Mason, 1984). Generally, these individ-
ual differences manifest themselves most strongly
in situations where the top managers have rela-
tively great discretion (Hambrick and Finkelstein,
1987), such as in situations of information over-
load, situations where cause and effect relation-
ships are not known, where regulatory or oversight
forces are minimal, and in small organizations
(Finkelstein and Hambrick, 1996; Miller et al.,
1982).
Although there have been no attempts to incor-
porate executive CSE into upper-echelons the-
ory, three of the individual component variables
that comprise CSE—self-esteem, locus of con-
trol, and emotional stability—have been exam-
ined in the executive context (summarized in
Table 2). In an early study with limited data, Berry
(1978) surveyed executives of manufacturing firms
to establish how they accounted for their ascen-
dance to the upper ranks of their companies; he
found that self-esteem was considered one of the
primary factors in their success. Among the numer-
ous studies that have examined locus of control
in executive samples, the most pronounced and
recurring finding is that executives who have an
internal LOC (i.e., feel in control of their fates)
are associated with strategies involving innova-
tion and product differentiation. Moreover, inter-
nal LOC executives perform well when pursuing
those strategies; they perform less well when pur-
suing cost leadership (efficiency) strategies (e.g.,
Boone et al., 2000; Miller et al., 1982; Miller and
Toulouse, 1986a, 1986b). In the single study that
has examined emotional stability, Peterson and
colleagues (2003) used archival sources, such as
biographies and published interviews, to code the
emotional stability of 17 well-known CEOs. They
found that CEO emotional stability was positively
related to TMT cohesion and intellectual flexibil-
ity. Again, we are aware of no studies that have
examined self-efficacy in executive samples.
Related constructs in the study of executives
In addition to studies that have examined the com-
ponents of CSE at the executive level, several
works have discussed other constructs that are
related to CSE, particularly narcissism, overcon-
fidence, and hubris (summarized in Table 3). It is
useful to differentiate and relate each to the con-
cept of CSE.
Copyright  2005 John Wiley & Sons, Ltd.
Narcissism
At its most basic, narcissism is self-love. A healthy
amount of narcissism is necessary for successful
functioning; it is based on secure self-esteem that
allows one to survive everyday life (Kets de Vries,
1994). An unstable sense of self-esteem, however,
can lead to excessive self-love in an attempt to
compensate. It is this danger of excess that gives
narcissism its derogatory connotation and causes
it to become a psychopathological condition (Kets
de Vries, 1994). Reactive narcissists (those who
have the pathological form) have a grandiose sense
of self-importance, take advantage of and devalue
others, and live under the illusion that their prob-
lems are unique and especially burdensome. They
feel entitled to be treated specially and to get
their way, are addicted to compliments, and lack
empathy (Lubit, 2002). A considerable amount has
been written about narcissism in executives (e.g.,
Bedeian, 2002; Kets de Vries, 1994; Kets de Vries
and Miller, 1985; Lubit, 2002), though most writ-
ings have been theoretical or case study observa-
tions rather than large-sample empirical research.
Our interpretation of the work on narcissism leads
us to conclude that CSE is highly related to healthy
narcissism but unrelated (and possibly negatively
related) to unhealthy reactive narcissism.
Overconfidence
Overconfidence is an overestimation of certainty
about being correct or producing a certain out-
come (Russo and Schoemaker, 1992). The ten-
dency for individuals to overestimate their abili-
ties and chances for success has been examined
extensively in the literature on negotiations and
decision-making (e.g., Bazerman and Neale, 1982;
Busenitz and Barney, 1997; Neale and Bazerman,
1985), primarily with an eye toward the idea that
overconfidence occurs more in some decision sit-
uations than in others. For instance, a recent paper
by Simon and Houghton (2003) found that a sam-
ple of computer executives were more overconfi-
dent (measured as the differential between a priori
estimates of success and ex post results) about
highly novel product introductions than they were
about more incremental product introductions.
It has been rare, however, for researchers to con-
sider the idea that overconfidence emanates from
individual differences. One exception is a recent
study in finance by Malmendier and Tate (2003),
Strat. Mgmt. J., 26: 297–319 (2005)
 Table 2. Summary of empirical research on core self-evaluations and component traits at the executive levela

Trait Study Research method Executive sample Findings

Core self-evaluations No extant research

(CSE)
Self-esteem Berry (1978) Self-reported questionnaire survey 36 CEOs and VPs of Midwestern Executives partially attribute their success
manufacturing firms to high self-esteem
Generalized self-efficacy No extant research
Locus of control (LOC) Miller, Kets de Vries, and Interview 24 CEOs in multiple industries in Higher internal LOC correlated with
Toulouse (1982) Quebec, Canada strategic innovation, risk taking,
environmental dynamism, and structural

Copyright  2005 John Wiley & Sons, Ltd.

Miller (1983) LOC and strategy variables gathered
through same-source interviews
Miller and Toulouse (1986a) Self-reported LOC and organizational
performance
Miller & Toulouse (1986b) CEO self-reported LOC (survey) and
strategy (interview). Another top
exec. evaluated structure and
environment
Govindarajan (1989) Self-report questionnaire survey.
Multidimensional effectiveness data
Khan and All variables self-reported
Manopichetwattana
(1989)
Hodgkinson (1992) Self-report questionnaire survey
Boone and De Brabander Interview and self-report survey
(1993)
Top executives in 52 medium and
large firms in various industries
97 CEOs in multiple industries in
Quebec, Canada
CEO and one other top executive from Internal LOC pursued more product
97 firms in various industries in
Quebec, Canada
105 SBU general managers
50 CEOs of small to medium-sized
manufacturing firms in Texas
91 small business owner-managers
59 CEOs of Flemish furniture
companies
differentiation. Relationships stronger in
small firms
Risk-taking, innovation, and proactiveness
of simple and planning firms (but not
organic firms) predicted by LOC of top
executives
Internal LOC correlated with relative
performance within dynamic
environments, and actual sales growth
and net income growth in all
environments
innovation, were more future oriented,
and tailored their strategy to
environment. Relationships stronger in
small firms
Internal LOC positively related to
effectiveness for SBUs with
differentiation strategy, but negatively
related to effectiveness for SBUs with a
low-cost strategy
Internal LOC related to increased
scanning and lower age and tenure, and
environmental scanning. LOC not
directly related to innovation
Internal LOC positively related to social
desirability. LOC related to
context-specific LOC
Generalized measure of LOC is better
predictive of performance than situation
Core Self-Evaluations in Strategic Decision-Making

specific measure of LOC advocated by

Hodgkinson (1992)

(continued overleaf )
303

Strat. Mgmt. J., 26: 297–319 (2005)

 Table 2. (Continued )
Trait Study
Wally & Baum (1994)
Roth (1995)
Copyright  2005 John Wiley & Sons, Ltd.
Boone, De Brabander, and
Van Witteloostuijn
(1996)
Boone and De Brabander
(1997)
Boone, Van Olffen, and Van Simulated business game.
Witteloostuijn (1998) Self-reported LOC
Boone, De Brabander, and
Hellemans (2000)
Emotional stability Peterson, Smith, Martorana,
and Owens (2003)
a
Domain-specific variables (such as role breadth self-efficacy, organization-based self-esteem, and specific measures of locus of control) are not included in this table, as they are not
considered to be components of the broad psychological trait of CSE.
Strat. Mgmt. J., 26: 297–319 (2005)
Research method
Mainly self-report. Decision pace
assessed through response to
hypothetical business scenario
Self-report questionnaire survey.
Archival performance measures
Self-report questionnaire survey.
Archival performance data
CEO self-reported LOC. Strategy
evaluated by CEO and other top
executive
Relied on LOC scores from Boone
et al. (1996) study. Archival
performance data
Personality and TMT dynamics
assessed by raters using archival
sources
Executive sample
151 manufacturing sector CEOs in
York County, Pennsylvania
74 CEOs of medium-sized firms in
nine industries
39 CEOs of Flemish furniture
companies
CEO and at least one other top
executive from 53 firms in Flemish
furniture industry
58 teams of managers in European
firms
39 CEOs of Flemish furniture
companies
17 well-known and well-documented
CEOs and their companies from the
past 25 years
304
Findings
LOC not related to pace of
decision-making, cognitive complexity,
centralization, or experience. Internal
LOC related to increased formalization,
risk propensity, and use of intuition
Internal LOC positively related to 5-year
income growth for firms with high
international interdependence; Internal
LOC negatively related for firms with
low international interdependence
Internal LOC related to product
differentiation and performance but not
cost leadership. Negative relationship
between differentiation and
N. J. Hiller and D. C. Hambrick
performance mitigated by internal LOC
Pattern of relationships between
CEO-reported LOC and strategy
dependent upon who evaluates strategy
(CEO or other top executive). Indicates
ambiguity of same-source self-report
data
Teams composed of predominantly
internal LOC members performed better
than teams predominantly composed of
external LOC members, who in turn
performed better than ‘mixed’ teams
Low-performing organizations were more
likely to fail within 6 years when CEO
had external LOC
Emotionally stable CEOs were more
dominant, and had TMTs that were
more cohesive, more intellectually
flexible, and less concerned with
legalism. Emotional stability not
significantly related to centralization or
risk-taking, though results in expected
direction
 Table 3. Summary of executive-level empirical research on traits related to core self-evaluations

Copyright  2005 John Wiley & Sons, Ltd.

Trait Study Research method Executive sample Findings

Hubris Hayward and Hambrick Hubris measured indirectly by
(1997) proxies of media praise,
CEO—TMT pay differential,
and recent organizational
performance
Overconfidence Malmendier and Tate Overconfidence measured as
(2003) failure to exercise highly ‘in the
money’ options and habitually
acquiring stock of their own
company
Simon and Houghton Overconfidence measured through 55 CEOs and direct reports of
(2003) interview and survey as extreme
certainty in projected
product-launch success,
followed by subsequent failure
Narcissism No empirical research
CEOs of American publicly traded All 3 measures of CEO hubris (as
firms engaging in well as a proposed underlying
>$100 million acquisitions in ‘hubris factor’) were significantly
1989 and 1992 (N = 106) related to overpayment when
acquiring another company
477 firms from the Forbes 500 list The investment decisions of
for the years 1980–1994 overconfident CEOs are more
responsive to available cash flow
Overconfidence and extreme certainty
small computer companies in predicted the extent to which a
Georgia product launch was pioneering
(risky). Pioneering negatively
related to achieved success
Core Self-Evaluations in Strategic Decision-Making
305

Strat. Mgmt. J., 26: 297–319 (2005)

306 N. J. Hiller and D. C. Hambrick
who examined the relationship between CEO over-
confidence and corporate investment. They identi-
fied overconfident CEOs as those who fail to exer-
cise stock options that are highly ‘in the money’
and who habitually acquire stock of their own com-
pany. They found that these overconfident CEOs
invested a higher percentage of the company’s cash
flow in investment projects (rather than releasing
it as dividends) than did CEOs who were not over-
confident. As a result, overconfident CEOs whose
companies had significant amounts of available
cash ended up investing in many projects that they
shouldn’t have, presumably because the CEOs had
inflated estimations of their personal abilities to
produce success.
Hubris
Like narcissism, hubris has its origins in Greek
mythology; it refers to exaggerated self-confidence
or pride (often with the connotation that retribu-
tion will follow) (Hayward and Hambrick, 1997).
The first prominent mention of hubris in the lit-
erature on top executives was by Richard Roll
(1986), who was otherwise at a loss for explain-
ing why CEOs make large corporate acquisitions
despite well-known evidence that such deals gener-
ally do not deliver the hoped-for results. Hayward
and Hambrick (1997) extended and tested Roll’s
‘hubris hypothesis,’ not by examining whether
CEOs make acquisitions or not, but by examin-
ing how much above pre-bid market prices that
CEOs pay for acquisitions. This measure of ‘acqui-
sition premium’ (which averaged 47% and ranged
as high as 100%) directly reflected the acquiring
CEO’s assessment of how much more valuable
the acquired company would be if it were under
his/her management. Lacking any direct measure
of CEO hubris, Hayward and Hambrick relied on
three indicators, or proxies, of ‘sources of hubris.’
The first two measures, the company’s recent per-
formance under the CEO and recent media praise
for the CEO, were situational conditions that were
thought to generate hubris. The third measure, the
ratio of the CEO’s pay relative to the second-
highest paid executive, was thought to capture the
CEO’s sense of ‘self-importance,’ which is per-
haps more of a stable individual trait. All three
measures were highly related to the size of acquisi-
tion premiums, and the three formed an underlying
hubris factor that was a stronger predictor of pre-
miums than were any of the individual indicators.
Copyright  2005 John Wiley & Sons, Ltd.
Hayward and Hambrick’s study highlights dual
merits of launching a research stream on executive
core self-evaluations. First, their results strongly
suggest that executives make decisions on the basis
of how full they are of themselves; thus it appears
that the essence of CSE matters in the execu-
tive arena. Second, Hayward and Hambrick’s use
of proxy indicators of hubris, which captured a
mixture of presumed situational and dispositional
factors, indicates the pressing need for a psycho-
metrically grounded and validated construct for
studying extreme self-confidence in executives. We
believe hyper-CSE is exactly that construct. That
is, the upper reaches of CSE may be thought of as
a scientifically validated ‘hubris factor.’
In sum, prior research on the conceptually sim-
ilar notions of executive narcissism, overconfi-
dence, and hubris helps to inform our understand-
ing of high-CSE executives. Most notably, a very
high level of CSE may exactly correspond to what
is colloquially referred to as hubris.
Expected distribution of CSE among
executives
Research in the upper-echelons tradition is based
on the premise that executives vary enough in their
characteristics so as to yield differences in their
behaviors (Hambrick and Mason, 1984). Accord-
ingly, in order for CSE to be a useful addition to
research on top executives, there must be mean-
ingful variance. In this section, we describe what
we anticipate the CSE distribution to be among top
executives. We argue that executives, on average,
have higher CSEs than the general population, but
that they also exhibit sufficient variability to allow
research on their differences.
Although central personality traits are largely
stable over time in adulthood (Costa et al., 2000;
McCrae and Costa, 2003), there is compelling evi-
dence that some aspects of personality and identity
can change as a result of life circumstances (Franz,
1994; Miller and C’deBaca, 1994; Trzesniewski,
Donnellan, and Robins, 2003; Weinberger, 1994).
Adopting this integrative view, we consider a per-
son’s CSE to be largely shaped by genetic factors
and during formative years, then reinforced (or
diminished) by long-term feedback processes, and,
finally, subject to further adjustments in the face of
recent life events (Weinberger, 1994). That is, indi-
viduals are prone to a given level of CSE, which
can change moderately as a result of long-term
Strat. Mgmt. J., 26: 297–319 (2005)
 Core Self-Evaluations in Strategic Decision-Making
conditioning and can change still more (but to a
lesser extent) as a result of recent occurrences. The
idea that CSE is somewhat malleable is especially
apt, we believe, for senior executives.
We anticipate that it will be those who have rel-
atively high intrinsic CSE at the outset of their
careers who will advance. Among the qualities
known to be valuable in managerial settings is self-
confidence. Not only is self-confidence thought to
be substantively valuable, because it allows the
manager to create and seize opportunities, as well
as overcome obstacles; but the external appearance
of self-confidence is also valuable, for its moti-
vational power and its potential to reassure con-
stituents that the organization is in capable hands
(Barnard, 1938; Bass, 1990; Keegan, 1987). In this
vein, self-ratings of CSE are found to relate to
managerial performance ratings and achievement
of objective performance criteria (Erez and Judge,
2001; Judge and Bono, 2001).
In addition to having had higher CSEs from the
outset, we expect that many executives will expe-
rience an enhancement of their CSEs during their
rise through their organizations. Most senior exec-
utives, particularly those in large organizations,
have achieved their positions by winning a long
series of rigorous promotion tournaments (Lazear
and Rosen, 1981). Relative to their peers along the
way, these tournament winners have been repeat-
edly deemed to have superior skill, intelligence,
motivation, persistence, and other valuable qual-
ities. Although defective advancement processes
are possible, we can assume that top executives
are generally, or at least disproportionately, potent;
and they have had their potency reaffirmed and
reinforced with each promotion. As partial support
for our portrayal of executives as having higher
CSEs, on average, than the general population,
research that has found that executives tend to
score disproportionately as ‘internals’ on the locus
of control construct, one of the components of CSE
(Govindarajan, 1989; Miller, 1983; Miller et al.,
1982).
Finally, once they reach the top, executives’
CSEs can still change within a range. There may
be a general tendency for enhancement of exec-
utive CSE, due to the flattery and bolstering
top executives often receive from those around
them (Doyle, 1994; Bedeian, 2002). Moreover,
work roles are central to many individuals’ defini-
tions of self-concept (Brockner, 1988; Tharenou,
Copyright  2005 John Wiley & Sons, Ltd.
307
1979). Those who are at the top of their orga-
nizations, and who have committed themselves
to job and career performance, may especially
experience rises and falls in self-evaluations par-
alleling their work outcomes. Thus, an execu-
tive’s CSE might rise or fall somewhat, depending
on recent or—especially—sustained performance.
Those who have experienced a long run of suc-
cesses may show an increased CSE; those who
have experienced several recent setbacks may have
a somewhat diminished CSE (Hayward and Ham-
brick, 1997).
Despite our assumption that executive CSE
tends to be somewhat higher than in the gen-
eral population, it would be a mistake to conclude
that executives have uniformly high CSEs. Indeed,
locus of control (a CSE component), for example,
has been shown to have meaningful variance in
numerous samples of top executives, with stan-
dard deviations only slightly smaller than in non-
executive populations (e.g., Blau, 1993; Govin-
darajan, 1989; Miller, 1983; Miller et al., 1982).
There also has been evidence found for variance in
measures of task-specific self-efficacy, overconfi-
dence, and hubris at the executive level (Hodgkin-
son, 1992; Hayward and Hambrick, 1997; Mal-
mendier and Tate, 2003). Further supporting the
idea that variance exists, it is important to note
that not every executive has risen through a series
of demanding tournaments in lustrous compa-
nies. Some executives head small or medium-
sized companies; some have arrived at their posi-
tions through family connections or politicized
processes; some are in their positions precisely
because they are not self-assured or confident, hav-
ing been selected for their pliancy or timidity,
possibly by domineering CEOs or owners (e.g.,
Collins and Moore, 1970). In short, not every
executive is at the very high end of the CSE
scale.
Figure 2 displays the distributions of CSE we
would expect from a sample of executives, as com-
pared to the general population. (Both of these
curves are stylized, inasmuch as Judge and col-
leagues have not reported the actual shape of CSE
distributions for any of their samples.) As shown,
we anticipate that executives exhibit significant
range in their CSEs, but tend to score higher than
the general population. Notably, we expect that
a significant proportion of executives have CSEs
toward the upper end of the scale, or what might
be called ‘hyper-CSE.’
Strat. Mgmt. J., 26: 297–319 (2005)
308 N. J. Hiller and D. C. Hambrick
Figure 2. The proposed distribution of core self-evaluation levels in the general population and executive population
We use the term hyper-CSE only for ease of
exposition, not to suggest that executives who are
at the very upper end of the continuum differ qual-
itatively, or in a step function fashion, from those
whose CSEs are only slightly lower (or simply
‘high’). At this early stage of theory development
about executive CSE, we see the construct as a
continuum, and executives as differing incremen-
tally, but meaningfully, along it.
Summary portrayal of the hyper-CSE
executive
At this point, it is useful to develop a compos-
ite portrayal of the executive who has very high
CSE, or hyper-CSE, based upon our understand-
ing of the construct developed by Judge and col-
leagues, as well as its four component traits. At
their core—extending beyond, but including their
work lives—hyper-CSE executives are exceed-
ingly confident and full of self-regard and self-
worth. They are sure of their abilities, and they
believe deeply that the application of their abili-
ties will bring positive outcomes. They are free of
anxiety and have little concern about negative out-
comes because they possess a core conviction that
they can surmount adversity and repair all prob-
lems. In short, hyper-CSE executives are sure they
will prevail.
Copyright  2005 John Wiley & Sons, Ltd.
IMPLICATIONS FOR STRATEGIC
DECISION-MAKING
Upper-echelons researchers have examined associ-
ations between executive characteristics and a wide
array of outcome variables, including elements
of organizational strategy, structure, and perfor-
mance (summarized in Finkelstein and Hambrick,
1996). We believe that CSE provides a conceptual
lever for understanding strategic outcomes which
have so far been under- or unexamined by exist-
ing executive personality research. Following from
the work of Judge and co-authors (e.g., Judge,
Erez, Bono, and Thoresen, 2002), we anticipate
that CSE will yield stronger predictions of these
outcomes than any of the four component traits.
In this section, we develop an integrated set of
propositions that describe the effects of executive
CSE on decision-making, specifically on strategic
decision processes, strategic choices, and organi-
zational performance (summarized in Figure 3).
In a later discussion of future research opportuni-
ties, we will briefly note additional implications of
executive CSE for such domains as interpersonal
relations and top management team composition
and processes.
Because executives must have considerable
authority and discretion in order for their biases to
be reflected in organizational outcomes (Hambrick
Strat. Mgmt. J., 26: 297–319 (2005)
 Core Self-Evaluations in Strategic Decision-Making
Figure 3. Effects of executive CSE on strategic processes, strategic choices, and organizational performance
and Finkelstein, 1987), we refer in all our propo-
sitions to chief executive officers (CEOs), the top-
most officials of organizations. We do not rule out
the influence that CSE may hold in other execu-
tive positions, nor do we mean to discount the role
of the entire top management team in generating
organizational outcomes (Hambrick and Mason,
1984). Following from a number of prior stud-
ies that have found CEO characteristics (including
personality variables) to be reflected in organiza-
tional outcomes (summarized in Finkelstein and
Hambrick, 1996), we formally focus on CEOs,
who are typically in the strongest position to
influence and shape what occurs in the organi-
zation. Yet, it should also be noted that not all
CEOs have equal discretion (Hambrick and Finkel-
stein, 1987). Therefore, executive discretion, or
latitude of action, should be considered to be a
latent, unspecified moderator of the associations
we propose.
Strategic decision processes
Researchers have long been interested in the pro-
cesses that organizations employ in making major,
strategic decisions, or what Barnard (1938) termed
‘the technique of decision’ (Mintzberg, 1978;
Quinn, 1980). Research has found that a given
organization tends to adopt a distinctive, recurring
approach to decision-making, which it applies time
after time, across an array of decision types (Weick,
1979; Fredrickson and Mitchell, 1984). Moreover,
there is evidence that the CEO’s style and prefer-
ences affect the nature of the organization’s deci-
sion processes (Miller et al., 1982). We anticipate
that a CEO’s core self-evaluation will influence
Copyright  2005 John Wiley & Sons, Ltd.
309
the degree to which strategic decision-making is
(non-)comprehensive, fast, and centralized.
Fredrickson and Mitchell (1984) established the
construct of ‘comprehensiveness’ as a way to
study a then-lively debate about the merits of
careful, systematic, ‘synoptic’ decision-making vs.
best-guess, trial-and-error approaches. In further
work, Fredrickson (1984) observed that compre-
hensiveness could occur at four stages in an orga-
nization’s decision process: situation diagnosis,
generation of alternatives, evaluation of alterna-
tives, and decision integration. In his empirical
research, Fredrickson found that organizations tend
to adopt a characteristic degree of comprehen-
siveness across all four stages (such that overall
decision comprehensiveness is a valid concept),
and that there is a negative association between
decision comprehensiveness and performance in
highly dynamic, uncertain industries (and a pos-
itive association in stable industries) (Fredrickson
and Mitchell, 1984; Fredrickson, 1986).
We can expect that hyper-CSE executives will
not be inclined toward decision comprehensive-
ness. Filled with confidence, these executives be-
lieve they possess valuable personal insights or
understanding of their strategic situations and
available alternatives, such that they will not feel
the need to exhaustively gather, analyze, and dis-
cuss data. We can expect that high-CSE executives
will form their strategic conclusions on the basis
of fewer pieces of information than will moderate-
CSE executives. Adding to the hyper-CSE execu-
tive’s propensity to act instinctively is his/her deep
belief that any unforeseen problems that might
arise because of the decision can be successfully
overcome. Thus:
Strat. Mgmt. J., 26: 297–319 (2005)
310 N. J. Hiller and D. C. Hambrick
Proposition 1: The greater a CEO’s core self-
evaluation, the less comprehensive will be the
organization’s strategic decision-processes.
Following directly from their tendency toward
non-comprehensiveness, we can anticipate that
high-CSE executives also engage in relatively fast
decision-making. Because they are willing to act
on the basis of incomplete information, and with-
out extensive analysis, high-CSE executives tend
to make moves faster than moderate-CSE exec-
utives. In a competitive context, strategic moves
might include offensive initiatives (new product
launches, acquisition bids, geographic expansion,
etc.) or responses to other firms’ actions (MacMil-
lan, McCaffery, and Van Wijk, 1985; Hambrick,
Cho, and Chen, 1996).
Speed of decision-making has received consid-
erable attention in recent years, because of its
importance for coping with ‘hyper-competitive’
(D’Aveni, 1994) or ‘high-velocity’ (Eisenhardt,
1989) environments. Empirical support for the
importance of organizational speed comes from
Judge and Miller (1991), who found that deci-
sion speed was strongly associated with both
sales growth and profitability in the biotechnol-
ogy industry; and from Hambrick et al. (1996),
who found that speed in both initiating actions
and responding to competitors’ actions were highly
related to market share gains in the airline industry.
We are aware of only one study that has con-
sidered the influence of executive psychologi-
cal properties on decision speed. In a study of
151 manufacturing companies, Wally and Baum
(1994) found that executive tolerance for risk,
optimism, psychological flexibility, and willing-
ness to use intuition were all related to decision-
making speed. Of these variables, optimism is most
closely related to CSE. Wally and Baum found
that executive locus of control was not signifi-
cantly related to decision speed (although the coef-
ficient was in the expected direction, with internal
locus of control executives acting somewhat faster
than external executives). Given that CSE has been
shown to have greater predictive power than any
of its component variables, including locus of con-
trol (discussed earlier), we speculate that signif-
icant results would have been obtained if CSE,
rather than locus of control, had been examined.
We anticipate that when the individual’s belief in
control is combined with the other elements of core
Copyright  2005 John Wiley & Sons, Ltd.
self-evaluation, the overall combination of self-
confidence and self-potency will lead high-CSE
executives to make fast decisions:
Proposition 2: The greater a CEO’s core self-
evaluation, the faster will be the organization’s
strategic decision-making.
An additional way to think about decision pro-
cesses is in terms of where major decisions get
made, particularly the degree of decision central-
ization.2 Organizations vary in the degree to which
they centralize their decision-making (Fredrick-
son, 1986), or concentrate decision rights at the
top of the organization (Fry and Slocum, 1984;
Mintzberg, 1979). In some organizations, strate-
gic decisions emanate from lower levels (Bower,
1970; Burgelman, 1983), leaving top executives
little role but ratification.
Most research on the determinants of decision
centralization has focused on environmental and
organizational factors, showing that stable environ-
ments and small, simple organizations tend to be
associated with centralization, while dynamic envi-
ronments and large, complex organizations tend
to engender (and benefit from) decentralization
(Pugh et al., 1968; Van de Ven, 1976). Research
has also examined the links between CEO person-
ality and centralization. Perhaps most prominent
is Miller and Droge’s (1986) study of 93 Cana-
dian companies, which found that CEO need for
achievement was strongly associated with central-
ization. This relationship was stronger for long-
tenure CEOs than for short-tenure CEOs, support-
ing the authors’ view that CEOs manifest their
personalities in their organizational design, rather
than being drawn to organizations that suit their
personalities.
It can be expected that high-CSE chief execu-
tives will favor highly centralized strategic deci-
sion processes, primarily so that they themselves
will be involved in the organization’s major delib-
erations and determinations. High-CSE executives
believe that they personally possess valuable in-
sights and skills. Moreover, they hold the core con-
viction that their efforts—their personal efforts—
lead to favorable outcomes. It is unlikely that such
2
Centralization can also be thought of as a structural feature
(Fredrickson, 1986). However, since the term usually encom-
passes the organization’s approach to where decisions are made,
it also comprises part of the decision process.
Strat. Mgmt. J., 26: 297–319 (2005)
 Core Self-Evaluations in Strategic Decision-Making
executives would embrace the idea that others in
the organization can make a given decision as well
as they can; nor would they want to defy their
conviction that effort equals reward.3 High-CSE
executives will tend not to delegate and will prefer
to act unilaterally. Thus:
Proposition 3: The greater a CEO’s core self-
evaluation, the more centralized will be the
organization’s strategic decision-making.
Strategic choices
In addition to its effects on decision processes,
executive CSE is expected to influence the orga-
nization’s actual strategic choices, or resource
deployments. Some of the effects of CSE on strate-
gic choices may be mediated by the decision pro-
cesses described above, while some of its effects
may be direct. We discuss how a CEO’s level of
CSE will shape the degree to which the organi-
zation undertakes quantum (as opposed to incre-
mental) initiatives, pursues deviant (as opposed to
conformist) strategies, and persists with initiatives
launched by the CEO.
Strategic initiatives may be either incremental
or quantum in nature (Quinn, 1980). Incremen-
tal strategies involve relatively modest outlays, a
step-at-a-time philosophy, and typically allow con-
siderable reversibility (Ghemawat, 1991; Chen and
MacMillan, 1992). In contrast, quantum initiatives
abruptly place more of the organization’s resources
at risk, and, by their very nature, are difficult to
reverse. Examples of quantum strategic initiatives
include large-scale R&D spending, large capital
outlays for specialized assets, and large acquisi-
tions.
Roll’s (1986) ‘hubris hypothesis’ for explain-
ing why CEOs make large-scale acquisitions envi-
sioned that highly confident CEOs are willing to
engage in large-stakes, quantum initiatives because
they are sure they will recoup their investment.
We similarly anticipate that hyper-CSE CEOs will
3
It is interesting to consider the possibility that some high-
CSE executives—especially those who are politically or socially
astute—will engage in centralized, unilateral decision-making,
but still allow others in the organization to have the impression
that they have a voice or input to the decision. By manipulating
the process, the CEO can create the appearance of decentralized
and comprehensive decision-making, even though he or she
simply seeks an elaborate ratification of a top-down choice. We
are indebted to an anonymous reviewer for raising this intriguing
possibility.
Copyright  2005 John Wiley & Sons, Ltd.
311
be relatively prone to undertake large-scale ini-
tiatives. These executives are sure of themselves,
highly confident. They are not only sure of the
wisdom of their decisions per se, but also sure
of their abilities to successfully implement their
decisions. High-CSE executives may be more will-
ing to undertake large-stakes, quantum initiatives
(which are, in an objective sense, riskier) because
they perceive less risk (see Wiseman and Gomez-
Mejia, 1998). Moreover, they believe they can suc-
cessfully overcome any problems that may arise
after the large up-front outlays are made. In con-
trast, CEOs who have only moderate levels of CSE
harbor some amount of self-doubt, and they have
some concerns about unforeseen external forces
ruining their investments. As such, moderate-CSE
executives will tend to favor more incremental ini-
tiatives.4
Proposition 4: The greater a CEO’s core self-
evaluation, the greater the number and scale of
quantum, large-stakes initiatives undertaken by
the organization.
In recent years, strategy scholars have become
interested in the concept of strategic conformity,
or the degree to which a focal firm looks and
behaves like the modal (or typical) firm in its
industry (Deephouse, 1999; Rindova, Pollock, and
Hayward, in press). On the one hand, imitation
provides legitimacy (DiMaggio and Powell, 1983);
but on the other hand, it rules out differentia-
tion in a competitive market space (Noda and
Collis, 2001). Although the literature on strate-
gic imitation has focused primarily on the role
of uncertainty in causing isomorphic behavior
(DiMaggio and Powell, 1983; Haveman, 1993),
researchers also have considered how the charac-
teristics of corporate decision-makers can prompt
conformity or imitation. In this vein, for example,
Davis (1991) found that the adoption of poison
pill anti-takeover provisions diffused from com-
pany to company through interlocked directors;
Finkelstein and Hambrick (1990) found that long-
tenured top management teams (TMTs) exhibited
4
Judge and co-authors have not formally considered the relation-
ship between CSE and risk propensity. In one study, however,
they found a correlation of 0.50 between CSE and a measure of
risk tolerance (Judge, Thoresen, Pucik, and Welbourne, 1999).
Thus, although risk propensity is not an element of CSE, it is
likely to be an accompaniment or outgrowth of CSE.
Strat. Mgmt. J., 26: 297–319 (2005)
312 N. J. Hiller and D. C. Hambrick
more strategic conformity to the central tenden-
cies of their industries than did newer TMTs;
and Geletkanycz and Hambrick (1997) found that
TMTs whose members were well connected to
other firms in the focal industry tended to pursue
strategies that conformed more to industry central
tendencies than did those whose members lacked
such ties.
What has not yet been considered is the pos-
sibility that executive personality influences con-
formist, or nonconformist, behavior. The concept
of core self-evaluation, however, presents just such
a possibility. Possessing a high level of self-
confidence, the hyper-CSE executive does not need
for others to validate a course of action. Strategic
ideas emanate from his/her own valuable insights,
and those ideas are tested against an internal men-
tal model that possesses its own reliability. Inso-
far as uncertainty prompts imitation, the hyper-
CSE executive—who possesses little doubt or
uncertainty—will not feel the need to conform
to the strategies of others. While others may see
deviance from industry conventions as risky, the
ultra-confident, high-CSE executive is not likely
to perceive as much risk in such actions.
Support for this line of thought also comes from
behavioral modeling theory (e.g., Bandura, 1977),
which suggests that individuals are more likely to
imitate the behavior of a model when they are
uncertain about how to act themselves. Individuals
with low self-esteem (a component of CSE) tend
to be relatively uncertain about the appropriateness
of their behavior, and thus may be more heavily
influenced by the actions of a model (Brockner,
1988). In a related vein, studies by Miller and
colleagues (Miller et al, 1982; Miller, 1983; Miller
and Toulouse, 1986a) have shown that executive
locus of control (a component trait of CSE) is
related to strategic innovation, which is usually
nonconformist behavior. Thus:
Proposition 5: The greater a CEO’s core self-
evaluation, the more the organization’s strategy
will deviate from the central tendencies of the
industry.
Strategic persistence, the degree to which the
firm’s strategy remains unchanged over time, is
another important component of strategic choice
(Finkelstein and Hambrick, 1990). Organizational
decision-makers are steadily confronted with con-
flicting signals (Starbuck and Milliken, 1988).
Copyright  2005 John Wiley & Sons, Ltd.
Some signals indicate that the organization is on
the right path and that future success hinges on a
continuation of current strategy, while other sig-
nals indicate that the current strategy is leading
to trouble (or to less success than another strat-
egy might bring). Because these conflicting data
are often noisy and ambiguous, and they emanate
from sources that vary in their familiarity and
reliability, they are subject to a great deal of per-
sonalized selective perception and interpretation by
the decision-maker (Mischel, 1977; Hambrick and
Mason, 1984). As a result, there is a tendency for
individuals to become committed to their own prior
actions and resist changing their behavior, even
when the chosen course is not yielding success
(Staw and Fox, 1977; Fox and Staw, 1979; Staw
and Ross, 1987).
Strategic persistence has been found to be a
function of executive tenure (Finkelstein and Ham-
brick, 1990), as well as of executive personality.
For example, Kisfalvi (2000) related strategic per-
sistence to an executive’s needs for autonomy,
success, and recognition. In a simulation study,
Audia et al. (2000) found that confidence and self-
efficacy were significant predictors of dysfunc-
tional persistence in the face of environmental
changes. Similarly, Whyte, Saks, and Hook (1997),
in a study of undergraduates, found that high task-
specific self-efficacy was a significant contribu-
tor to economically irrational escalation of com-
mitment to a losing course of action. Extending
the argument to CSE, we expect that high-CSE
executives are relatively likely to persist in their
chosen strategies, because of their extreme con-
fidence in their decisions, in their ability to suc-
cessfully implement their decisions, and in their
ability to overcome any post-decision challenges.
We expect high-CSE executives to persist in their
chosen strategies even in the face of disconfirming
evidence.
Proposition 6: The greater a CEO’s core self-
evaluation, the greater the organization’s per-
sistence in pursuing strategies that were launch-
ed by the CEO.
In sum, then, we anticipate that a CEO’s self-
concept, as gauged by his or her core self-evalu-
ation, will significantly influence the way in which
an organization makes its strategic decisions, as
well as the nature of the choices made. In par-
ticular, the high degree of self-confidence and
Strat. Mgmt. J., 26: 297–319 (2005)
 Core Self-Evaluations in Strategic Decision-Making
self-potency of the hyper-CSE chief executive will
lead to non-comprehensive, fast, and centralized
decision-making, and also to quantum, noncon-
formist strategic initiatives that the organization
will pursue with persistence.
Organizational performance
If CSE affects strategic decision processes and
choices, it can also be expected to affect organiza-
tional performance. Departing from Judge’s ‘more
CSE is better’ thesis, we anticipate that hyper-CSE
executives are associated with extreme perfor-
mance—either big wins or big losses. On the one
hand, the outcomes of hyper-CSE—speed, non-
comprehensiveness, boldness, and deviance from
industry norms—can lead to extraordinary success
(D’Aveni, 1994; Porter, 1980; Eisenhardt, 1989).
On the other hand, these same strategic behav-
iors can lead to catastrophe. To the extent that
high-CSE executives engage in large-scale, risky
strategic initiatives and make decisions quickly and
with little analysis, the results could be grave.
Whereas Erez and Judge (2001) found that CSE
was positively associated with performance on an
anagram completion task (among undergraduate
students) and in selling insurance policies (among
insurance agents), we are very doubtful that this
pattern will carry over to CEOs—many of whom
are at the very upper reaches of the CSE scale.
Indeed, the picture of an executive who has the
authority and discretion to spend millions or bil-
lions of dollars and who has a belief that he or
she can do no wrong (or can fix all wrongs) is
not necessarily a pretty one. If the executive has
calculated or guessed correctly, the results could
be outstanding. However, the chances are also rel-
atively great that such impulsive, outsized moves
will lead to dire consequences. Thus we anticipate
the following:
Proposition 7: The greater a CEO’s core self-
evaluation, the more extreme the organization’s
performance.
Although it is tempting to think that moderate-
CSE executives will perform better than hyper-
CSE executives, we favor the line of thought
that moderate- or moderately high CSE execu-
tives—those who carry some amount of self-
doubt—will perform more reliably, or have less
Copyright  2005 John Wiley & Sons, Ltd.
313
extreme outcomes, than will hyper-CSE executives
(who will deliver extreme, volatile performance).
Our depiction of the dangers of hyper-CSE is
clearly at odds with the current wave of writings
that depict managerial confidence in only the lofti-
est and most positive of terms (Kanter, 2004; Hol-
lenbeck and Hall, 2004). We agree that—up to a
point—managerial confidence, and its fuller vari-
ant, CSE, are exceedingly beneficial for propelling
action and motivating others; but we believe that
beyond that point, or at the extreme, managerial
confidence and hyper-CSE can bring about naı̈ve,
even foolish behaviors.
In a similar vein, one might ask, how can ‘emo-
tional stability,’ a component of CSE, ever be a
bad thing? Isn’t emotional stability always benefi-
cial? Here we must recall that emotional stability,
as measured by Judge and others, primarily gauges
a person’s freedom from anxiety or worry; thus, it
does not capture every aspect of emotional well-
being that the label might imply. (The obverse
label, ‘neuroticism,’ is often used to describe the
construct.) What we are asserting, then, is that
executives who are completely free of anxiety or
worry (and who additionally manifest the other
elements of hyper-CSE) are highly susceptible to
flawed decision-making. Namely, we believe that
Andy Grove, the legendary CEO of Intel, was on
the right track when he said: ‘Only the paranoid
survive’ (Grove, 1999).
MEASUREMENT
In order to explore the implications of CSE for
executive behavior, the construct must be amenable
to reliable measurement. Although collecting psy-
chometric measures directly from executives
(either through self- or other-reports) is difficult,
it is possible, and the resulting data can hold great
explanatory power (e.g., Boone, De Brabander,
and van Witteloostuijn, 1996; Miller et al., 1982).
In cases where direct measurement is impractical,
indirect, or proxy measures of CSE may be help-
ful in enabling empirical research (Hambrick and
Mason, 1984). Indeed, the use of readily accessible
proxies for psychological variables is widespread
and has been successful (e.g., Barr, Stimpert, and
Huff, 1992; Hayward and Hambrick, 1997). In
this section, we outline some suggestions for both
direct and indirect measures.
Strat. Mgmt. J., 26: 297–319 (2005)
314 N. J. Hiller and D. C. Hambrick
Almost all prior research on CSE has used an
aggregated instrument, consisting of validated full-
length measures of each of the four component
traits (self-esteem, generalized self-efficacy, locus
of control, and emotional stability). Advocated
by Judge, Locke, Durham, and Kluger (1998),
this full-measure approach was important in the
early phases of establishing the CSE construct,
but resulted in CSE measures as long as 54 items,
which are too cumbersome for an executive sam-
ple. Recent work (Judge et al., 2003) has resulted
in the development of a 12-item measure that opti-
mally taps the central CSE construct. This newly
created scale appears to have adequate psychomet-
ric properties and to be less susceptible to range
restriction than the previous measure. Still, it may
require additional modification for use with execu-
tives, in order to ensure that range restriction does
not obscure real differences at the high end of the
CSE scale. For research on executives, we must be
sure that we are reliably distinguishing between
those who have high CSE and those who have
very high CSE. One option for potentially allevi-
ating range restriction would be to use a 7-point
(instead of 5-point) scale, with Very strongly dis-
agree, and Very strongly agree at the ends of the
continuum. Another possible solution may involve
rewording some of the items to enhance variance.
For example, the item, ‘When I try, I generally suc-
ceed’ might be reworded as, ‘When I try, I almost
always succeed.’5
Another way that CSE might be assessed is
through non-transparent psychological measures.
Given that individuals often attempt to manage
others’ impressions of themselves (Day et al.,
2002), executives may be unwilling (or even
unable) to accurately respond to transparent CSE
items. The Implicit Association Test (IAT; Green-
wald, McGhee, and Schwartz, 1998), which could
be adapted to measure CSE, is relatively imper-
vious to self-presentation biases, and could pro-
vide a useful alternate perspective on executive
self-concept. The existing version of this test,
which assesses self-esteem, requires participants at
a computer to categorize a set of descriptors, as
quickly as possible, as being relevant to the self,
and as being positive or negative (for a review of
IAT, see Fazio and Olson, 2003). The basic idea of
5
We acknowledge that such modifications of Judge’s items
would yield a somewhat different measure—perhaps ‘hyper-
CSE’ rather than regular CSE.
Copyright  2005 John Wiley & Sons, Ltd.
this approach, which has been borne out in valid-
ity tests, is that participants will rate much more
quickly those descriptors that are central to their
self-concept than they will descriptors that are not
part of their self-concept.
Given the difficulty in obtaining cooperation
from senior executives in completing self-
evaluations, alternative assessments of CSE also
need to be considered. One possible method would
be to receive social reports of executive CSE from
others who are close to the executive. Sources
could include administrative assistants, profes-
sional direct reports, or other colleagues. While
others’ ratings of focal subjects’ CSE have limi-
tations (Judge, Erez, Bono, and Thoresen, 2002),
they may not be as vulnerable to positive self-
presentation biases that can occur in self-ratings
(e.g., Harris and Schaubroeck, 1988). Social re-
ports, in and of themselves, as well as differences
between other-ratings and self-ratings, may be rich
ground for investigation.
In addition to direct measures of CSE, the cre-
ative use of indirect measures may enable addi-
tional understanding of the effects of CSE. Poten-
tial indicators of CSE (some of which have been
previously used by Hayward and Hambrick, 1997,
and Malmendier and Tate, 2003) include: promi-
nence of the CEO in the company’s annual report
and press releases; content analysis of the CEO’s
speeches or press releases; the pay differential
between the CEO and other TMT members; and
the CEO’s behavior in exercising (or not exercis-
ing) stock options. Admittedly, each of these will
be a noisy, imprecise measure, and each will vary
as to whether it gauges CSE as an enduring trait
vs. as an emergent condition. Perhaps some of the
initial research on executive CSE should focus on
establishing the associations between pencil and
paper measures of the construct and some of these
indirect measures, in order to establish which of
the latter may be used reliably as proxies.
FUTURE RESEARCH AND SUMMARY
The propositions we have presented regarding
the implications of executive CSE for strategic
decision-making are among the most promising
avenues for future research. However, we see the
need and opportunity for inquiries on other aspects
of this important construct. In this section, we
present a brief overview of four such possibilities.
Strat. Mgmt. J., 26: 297–319 (2005)
 Core Self-Evaluations in Strategic Decision-Making
First, it will be important to understand the
origins of CSE in executives. As a fundamen-
tal, enduring personality trait, a person’s level of
CSE should be largely established by early adult-
hood (Costa and McCrae, 1994). But, just as with
other personality dimensions, it is possible—as
we have argued—that life experiences may exert
additional influences (Weinberger, 1994). It may
be, for instance, that individuals who are selected
for early managerial posts have higher CSEs than
their age-peers who do not qualify for manage-
ment. Then, those who receive promotions will
experience an elevation of their CSE; with each
additional hierarchical advance, their sense of self-
esteem and potency will be further reinforced.
Those who eventually rise to the highest lev-
els—particularly those who do so without serious
stumbles—may end up with CSEs well above their
earlier levels. Then, recent job performance might
have even more of an effect; CEOs whose com-
panies have performed very well for several con-
secutive years may have their self-concept further
bolstered (which may partially account for Miller’s
Icarus Paradox, 1990). Likewise, those who have
encountered serious performance problems may
experience a reduction of their CSE. Examining
these possibilities is important to our understand-
ing of executive psychology.
Second, there is an opportunity to study how
executive CSE affects interactions among exec-
utives and the composition and processes of top
management teams (Hambrick and Mason, 1984).
It would be useful to learn, for example, whether
hyper-CSE CEOs tend to attract and retain other
high-CSE executives to their teams, or conversely
whether CSE is an attribute for which likes do
not match. Similarly, it would be useful to exam-
ine how the extreme confidence and sense of
self-potency of the hyper-CSE CEO affects team
dynamics, including such attributes as social cohe-
sion and communication patterns (e.g., Smith et al.,
1994).
Third, given that executives tend to be attracted
to (and retained in) industries and organizations
that fit with their dispositions (e.g., Gupta and
Govindarajan, 1984; Finkelstein and Hambrick,
1996), it would be interesting to investigate the
extent to which industry and organizational charac-
teristics attract executives according to their CSEs.
It may be, for instance, that high-CSE executives
are attracted to industries that confer high levels
of discretion (Hambrick and Finkelstein, 1987).
Copyright  2005 John Wiley & Sons, Ltd.
315
Fourth, CSE may be an important considera-
tion in understanding executive pay. Wade, Porac,
and Pollock (2004) found that ‘star’ CEOs (who
were winners in Financial World’s CEO of the
Year competition) were relatively likely to accept
a tight linkage between pay and performance, pre-
sumably because their star status injected them
with confidence in their own abilities. CSE may
be a useful construct for further exploring this
conjecture; indeed such findings may have sig-
nificant implications for the role of individual
differences in reducing agency problems (Fama,
1980).
Researchers have long been interested in the
influence of executive self-concept on executive
behavior but have lacked a well-developed, vali-
dated construct for conducting systematic inquires.
The recent work of Judge and co-authors in estab-
lishing and validating the concept of CSE may
provide substantial leverage for research on exec-
utive self-concept. CSE, which unifies the four
previously separate concepts of self-esteem, self-
efficacy, locus of control, and emotional stability,
has been found in non-executive populations to
provide greater power in explaining outcome mea-
sures than do the component traits. Moreover, CSE
has substantially more theoretical foundation (and
measurement sophistication) than do the concepts
that have previously been invoked in the litera-
ture on executive self-assessment—notably hubris,
narcissism, and overconfidence.
We anticipate that high-CSE CEOs—who pos-
sess supreme levels of self-confidence, self-
potency, and conviction that they will prevail—
will manifest this trait in their behaviors. We have
developed several propositions that describe the
implications of CSE for strategic decision pro-
cesses and strategic choices. We envision, how-
ever, that executive CSE might be reflected in a
wide array of executive behaviors and organiza-
tional attributes (including interpersonal relations,
incentive arrangements, and organizational struc-
ture), making it a promising construct for research
on many fronts.
ACKNOWLEDGEMENTS
We gratefully acknowledge helpful comments from
Trevis Certo, David Day, Jim Detert, Dan New-
man, Tim Pollock, and Linda Trevino.
Strat. Mgmt. J., 26: 297–319 (2005)
316 N. J. Hiller and D. C. Hambrick
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