Point Lookout: a free weekly publication of Chaco Canyon Consulting
Volume 21, Issue 37;   September 15, 2021:

Illusory Management: II


Many believe that managers control organizational performance more precisely than they actually do. This illusion might arise, in part, from a mechanism that causes leaders and the people they lead to tend to misattribute organizational success.
18 hats

18 hats. A useful metaphor for transference, due to Virginia Satir, is hanging one person's hat on the head of another. [Brenner 2001] Image based on one by TiceRuck, courtesy Pixabay.

Organizational leaders certainly influence organizational performance. They control or have significant influence over resource allocation, the organizational roster, and organizational strategy. But as noted last time there is much that they do not control. So much, in fact, that we must question the stories we tell ourselves about the degree of control Management actually has.

And the question I find most intriguing is this: How does the story of management control persist? Said differently, given the obvious limitations of Management control, why do we continue to believe in it as strongly as we do? Three phenomena suggest an explanation. They are a cognitive bias called the Illusion of Control, the effect of power on one's tendency to succumb to the illusion of control, and psychological transference.

The illusion of control: a cognitive bias

The illusion of control is a cognitive bias that causes us to overestimate the degree of control we have over events. [Thompson 1999] In extreme examples, people believe that they influence events over which their influence is clearly insignificant. For example, there are those who believe that when they watch on television the games of their favorite professional sports team, the team is more likely to win.

The illusionThree phenomena suggest an explanation for
the persistence of our belief in Management
control: The Illusion of control;
Transference; and Power
of control appears with somewhat more plausible justification when we're personally involved in events. For example, when a project is a smashing success, achieving all its objectives within its projected time and budget, the project manager might feel responsible for the success. Indeed, that feeling might be justified to some degree. However, the illusion of control could cause that project manager to overestimate that degree of responsibility. Almost certainly, a significant portion of the responsibility for success is due to the work of the project team, the resources provided by the organization, and in one example, to the predecessor project manager who conceived the project plan and executed it for the first 22 months of its 28-month duration, until she was quarantined and hospitalized with COVID-19.

When we welcome an outcome in which we're personally involved, we're more likely to succumb to the illusion of control.


Transference is a phenomenon that causes us to transfer feelings we have for one person or entity onto another usually distinct and unrelated person or entity. It was first identified in the context of psychoanalysis by Sigmund Freud, who noticed that many of his clients had developed strong feelings for him. But transference has the potential to appear in any human relationship. In particular, transference can affect how the people of an organization perceive their leaders. [Maccoby 2004]

Because organizational leaders are authoritative and powerful, some people, some of the time, perceive organizational leaders as, for example, parents or teachers. When this happens, they attribute to organizational leaders feelings, abilities, power, and authority beyond what those leaders actually possess.

Most important, some people attribute to organizational leaders a sense of caring that leads to feeling an obligation to look after the welfare of the people of the organization, beyond what many leaders actually feel. For instance, organizational leaders might terminate the employment of people in their organizations much more readily than parents might eject their own child from their home.

Transference and the illusion of control can conspire to distort our perceptions of Management's ability to control the performance of the organization. Because of transference, some people in the organization tend to adopt a view that cuts two ways. Whether the organization is faring well or poorly, its people tend to attribute success or failure too much to management activity. This happens because they overestimate the importance of the organization's wellbeing in Management's decision-making process.

That overestimate is due, in part, to transference and the indirect action of the illusion of control. Because of transference, people overestimate the importance to Management of organizational wellbeing. And because they believe that Management cares about the organization's people as parents would care about their children, they believe that Management always does everything possible to ensure organizational success.

Power and the illusion of control

A 2009 paper by Fast, Gruenfeld, Sivanathan, and Galinsky reports the results of four experiments investigating how the experience of power affects one's susceptibility to the illusion of control. [Fast 2009] They found that the effects of experiencing power include elevated incidence of the illusion of control. The illusion of control can be so strong that people who experience power also experience an elevated sense of their own ability to control time. [Weick 2010].

These effects are important when we consider what happens when organizational leaders perceive that the people of the organization believe that the leaders have more control over organizational performance than they actually do. If that mismatch between perception and reality were to occur, organizational leaders would have a rather jarring experience. They might feel that they were being held responsible for outcomes beyond their control.

But because the power experience engenders the illusion of control, the perceptions of organizational leaders tend to align with the perceptions of those they lead. In this way, the effects of power on leaders' perceptions of their own degree of organizational control restores stability to what might otherwise be an unstable dynamic.

Last words

The illusion of control, transference, and power thus combine to defend the story of management control of organizational outcomes. That defense is often effective enough to enable belief in the story to persist despite strong evidence suggesting other explanations for organizational performance. First in this series  Go to top Top  Next issue: Formulaic Utterances: I  Next Issue

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[Brenner 2001]
Richard Brenner. "You Remind Me of Helen Hunt," Point Lookout blog, June 6, 2001. Available here. Back
[Thompson 1999]
Suzanne C. Thompson. "Illusions of Control: How We Overestimate Our Personal Influence", Current Directions in Psychological Science 8:6, (1999), 187-190. Back
[Maccoby 2004]
Michael Maccoby. "Why people follow the leader: the power of transference," Harvard Business Review 82:9 (2004), 76-85. Available here. Retrieved 31 August 2021. Back
[Fast 2009]
Nathanael J. Fast, Deborah H. Gruenfeld, Niro Sivanathan, and Adam D. Galinsky. "Illusory control: A generative force behind power's far-reaching effects," Psychological Science 20:4 (2009), 502-508. Available here. Retrieved 31 August 2021. Back
[Weick 2010]
Mario Weick and Ana Guinote. "How long will it take? Power biases time predictions," Journal of Experimental Social Psychology 46:4 (2010), 595-604. Available here. Retrieved 31 August 2021. Back

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