Overconfident CEOs in Dire Straits: How Incumbent and Successor CEOs’ Overconfidence Affects Firm Turnaround Performance

As a well-studied executive bias, CEO overconfidence usually has negative connotations – although empirical evidence of its performance effects remains inconclusive. By theorizing on in turnaround situation, we propose that can either help or hinder performance, depending whether the overconfident is incumbent who steered firm into dire straits, successor hired during decline. Our findings suggest an damages performance; replacing incumbents improves and successors decline enhance performance. Exploratory post-hoc analyses further these are driven by divergent ways which biases CEOs’ assessment organizational Comprehensive implications for research practice discussed.