Managerial Myopia Control to Improve Financial Performance in Microfinance Institutions
(Pages 176-185)A. Khoirul Anama,*, Ibnu Khajarb and Mutamimahc
aFaculty of Economics, Universitas Islam Sultan Agung, Semarang, Indonesia, and Faculty of Economics and Business, Universitas Islam Nahdlatul Ulama, Jepara, Indonesia.
b,cFaculty of Economics, Universitas Islam Sultan Agung, Semarang, Indonesia.
ahttps://orcid.org/0000-0002-4159-7523.
bhttps://orcid.org/0000-0001-8112-9129.
chttps://orcid.org/0000-0002-4139-1955.
DOI: https://doi.org/10.55365/1923.x2023.21.17
Abstract:
Management makes many strategic decisions that have an impact on the performance of the company. Decision-making carried out by management allows for decision-making bias. Our research seeks to gain a further understanding of the managerial phenomenon of myopia, where previous empirical research has been very limited and conceptual. This study aims to analyze the influence of managerial myopia on financial performance in microfinance institutions. This decision-making bias is a concern because of the impact it causes and is often not realized by many managers. Methodology This research uses explanatory research that emphasizes the relationship between research variables through hypothesis testing. Research variables include temporal myopia, spatial myopia, failure myopia, and financial performance. Data collection was carried out using structured questionnaires, and analysis was performed using PLS-SEM with SMARTPLS software. The results showed that managerial myopia (temporal, spatial, and failure) negatively affects financial performance. These results indicate that the biased practices of management may affect the company's financial performance. This study contributes to the financial literature on managerial myopia by analyzing the influence of managerial myopia on financial performance, thereby increasing understanding of the phenomenon of managerial myopia in microfinance institutions, where previous research was still limited. Managers can easily use the indicators we developed to assess managerial myopia as metrics for each type of myopia. These empirical results serve as an impetus for myopic managers to redirect their behavior and help convince sustainability-oriented managers to stay on track.
Keywords:
Failure myopia, spatial myopia, sustainability, temporal myopia, value destruction.
JEL Classification:
G40, G41.
How to Cite:
A. Khoirul Anam, Ibnu Khajar and Mutamimah. Managerial Myopia Control to Improve Financial Performance in Microfinance Institutions. [ref]: vol.21.2023. available at: https://refpress.org/ref-vol21-a17/
Licensee REF Press This is an open access article licensed under the terms of the Creative Commons Attribution Non-Commercial License (http://creativecommons.org/licenses/by-nc/3.0/) which permits unrestricted, non-commercial use, distribution and reproduction in any medium, provided the work is properly cited.