Why do some managers foresee more than others? The psychological foundations of managerial myopia

Construal level theory provides an intriguing theoretical perspective to study managerial myopia and suggests a novel psychological mechanism to study distance (spatial, temporal, social). Particularly, we propose that a high perceived psychological distance evokes a high level, abstract, and decontextualized mental representation of the environmental stimulus that translates into managerial myopia, mediated by several cognitive limitations. Moreover, construal level theory provides a theoretical basis to study managerial myopia in a more integrative manner mapping multiple objective distances as well as moderating factors on a common underlying, unitary psychological distance. While the objective distances would suggest that all managers perceive an environmental stimulus as equally psychological distant, we identify organizational- and individual-level factors that moderate the relationship between objective distances and perceived psychological distance allowing to explain differences across managers. The article makes particularly two contributions. First, it elaborates on the psychological foundations of managerial myopia suggesting the perceived psychological distance as driving force of myopia. Second, it provides a more integrative framework to study managerial myopia necessary as managerial myopia persists as long as any objective distance remains far away.