Re-thinking strategic myopia: A necessary condition analysis of heuristic and firm's performance

Abstract

At times of fast paced technology progress and global disruptions strategic myopia can be particularly harmful to firms. A narrow view of actors, events and tendencies is a firm's environment, combined with short-term preferences is widely recognized in the literature as leading to belated or inadequate responses to challenges. Manager's myopia is typically portrayed as a systematic bias, inducing underperformance. However, empirical evidence is more than nuanced in this respect. In this study, we view strategic myopia as an effective heuristic triggered in uncertain environments and specific task conditions. We use the necessary condition analysis (NCA) to examine the association between strategic myopia and firm performance through a necessity logic lens. This innovative method provides insights into the relationship between low levels of strategic myopia dimensions and firm performance in both the short- and long term. We measure strategic myopia and firm performance as multidimensional constructs on a representative sample of 658 Polish managers. Our results challenge the conventional wisdom that low strategic myopia is necessary for high performance. We highlight the nuanced role of myopia across its dimensions (i.e., competitive, cooperative, temporal, and learning) and shed light on its implications for both short- and long-term performance.