The bright and dark sides of CEO hubris: Assessing cultural distance in international business

Abstract

This paper aims to enrich the behavioral theory of international business strategy by investigating how CEO hubris (i.e., excess pride and confidence) affects international strategic choices, that is, location selection, entry timing, and modes of entry into the target market. Specifically, we focus on the relationship between cultural distance and international strategic choices and consider hubris as a mechanism that influences CEOs' decisions. Our conceptual framework recognizes that the performance of international strategies managed by hubristic CEOs is extremely volatile. On the one hand, we corroborate the idea that hubris has a dark side that may lead to pernicious outcomes. On the other hand, we recognize a bright side of hubris related to the consideration that overconfidence may sometimes be seen as a necessary CEO quality that in turn differentiates one firm from the others.