Managers' beliefs are shaped by their personality rather than their education, career history and other experiences, new research from leading business school Carnfield University shows.
Selective perception, the most popular theory to explain the effect of biases in managerial decisions, developed in the 1950s, suggests that the experiences a manager has had will determine the way they perceive the world.
An accountant, for instance, will identify with financial information, and human resources experts with people. The theory became accepted wisdom and is mentioned in most textbooks on organisational behaviour.
A research thesis written by Robert Galavan, a senior specialist with the Irish Management Institute who spent years studying senior Irish business figures, challenged the selective perception theory and found that experience has little effect on managers' perceptions, while personality factors have a "significant influence".
The research recently won best doctoral thesis award 2006" from Carnfield, one of the world's top 20 business schools.
"The results I found were rather surprising," Galavan said. "Where you have been, what you have trained in, how long you have been around was all rather irrelevant. What did turn out to be important was your personality.
"Regardless of whether managers had trained as engineers or designers, had five years' management experience or 15, had a third-level education or no formal education, I could explain the differences in their beliefs simply by assessing their personalities."
The selective perception theory indicated that accountants perceive things differently to marketing people because of their training, according to Galavan. However, there has been little supporting research to back up the concept and it has rarely been questioned since the original study was carried out, he said.
"Most people who work in organisations will easily recognise that strategic decisions are rarely the result of a rational analysis.
"There are many reasons why this is so, such as time pressure, an information overload or shortage, lack of decision-making skills or simply incompetence."
As a result, if two executives with the same information are asked to make a difficult strategic decision, they will likely come up with two different answers. This is due to differences in how they interpret the situation and the beliefs they form, Galavan says. Managers with a reflective and open personality were more likely to take the middle ground in decisions, his research showed.
Given that personality has such a strong effect on perceptions, managers need to become more aware of their own personality traits and the likely biases that they have on their decision-making, Galavan advised.
In addition, companies should be aware that when they hire a senior executive, they are not only recruiting their analytical ability and experience but also the less tangible and possibly more important personality.
"It appears that when you hire a manager, you hire their belief system, and experience isn't going to change it very much," he said. "So get it right."
The findings, he says, include how some beliefs that managers hold will stay with them for life, regardless of their work and educational background.
He says this may explain why personality profiling of executives is growing in popularity.
"Organisations and their star employees are trying to get to grips with what drives their beliefs and behaviour," Galavan said.
Ireland's first emotional intelligence (EQ) assessment and development centre opened in March as more companies seek to test top staff on their suitability for a certain job.
IQ testing has been used as a recruitment tool for decades, though Irish companies increasingly see EQ as a better measure of whether someone will be successful in a position.
