Social Image, Self-Confidence and Organisational Behaviour

Three results are established. First, followers might exert a higher effort when the manager is confident compared to an unconfident manager despite knowing that there is a negative relationship between confidence and ability. This happens when the followers who are aware of the relationship between confidence and ability also know that a sufficient fraction of followers believe there is a direct association between confidence and ability.

Second, image concern imposes a cost on organization because the manager is committed to implement inferior projects in order to save face. Our analysis therefore provides a behavioral explanation for commitment escalation.

Third, managers with a high or low status are less vulnerable to image loss, compared to managers with an intermediate status, when it comes to correct a failed course of action. Image preservation is therefore the problem of middle status managers.