The Influence of Managerial Myopia on Strategic Differentiation: A Decision-Making Perspective

Tianjiao Zhang; Qingqing He; Yanan Gao

doi:10.31181/dmame8220251516

Authors

Tianjiao Zhang School of Management, Anhui Business and Technology College, Hefei, 231131, Anhui, China.
Qingqing He School of Management, Anhui Business and Technology College, Hefei, 231131, Anhui, China.
Yanan Gao School of Management, Anhui Business and Technology College, Hefei, 231131, Anhui, China.

DOI:

https://doi.org/10.31181/dmame8220251516

Keywords:

Managerial Myopia; Decision Bias; Executive Decision-Making; Strategic Decision System; Textual Analysis

Abstract

In highly complex and evolving business environments, the methodological soundness of corporate strategic decision-making plays a pivotal role in shaping both organizational risk resilience and competitive positioning. This research integrates Upper Echelons Theory with Strategic Balance Theory to construct a decision science framework that examines the interrelationship among managerial language, cognitive orientation, and strategic behaviour. Employing text mining techniques, the study quantifies executive myopic tendencies within Management Discussion & Analysis (MD&A) disclosures and systematically assesses their influence on corporate strategic differentiation. The analysis utilises panel data from A-share listed companies on the Shanghai and Shenzhen stock exchanges over the period 2014–2022. Based on the outcomes of the Hausman test, a fixed-effects model is applied as the principal estimation method. To enhance methodological robustness, Propensity Score Matching (PSM) is implemented to address potential sample selection bias, while Two-Stage Least Squares (2SLS) estimation is used to correct for endogeneity concerns. Empirical results indicate that managerial myopia exerts a significantly negative impact on strategic differentiation, with findings remaining consistent after controlling for firm age, size, profitability, and other relevant covariates. Mediation analysis reveals that risk-taking propensity serves as a complete mediator, whereas moderation tests indicate that the effect is intensified in state-owned enterprises and firms with limited analyst coverage. These findings carry important implications for strategic decision-making: organisations are encouraged to adopt mechanisms that mitigate cognitive biases through decision-support systems and enhanced executive performance metrics. Policymakers may consider implementing stricter disclosure regulations, promoting analyst engagement for under-covered firms, and facilitating state-owned enterprise reform via mixed-ownership strategies to foster system-wide strategic innovation.

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