|dc.description.abstract||This paper studies, in a world with differing priors, the role of organizational beliefs and
managerial vision in the behavior and performance of corporations.
The paper defines vision operationally as a very strong belief by the manager about the
right course of action for the firm. The interaction between employees' beliefs and the
manager's vision influences decisions and determines employees' motivation and
satisfaction. Through sorting in the labor market, the manager's vision also shapes
organizational beliefs. Under weak conditions, a company's board should select a
manager with stronger beliefs than its own, although spurious effects may make vision
often look better than it really is.
The analysis shows that beliefs play an important role that goes beyond their
information content. It also has implications for theories of corporate culture and