This study aims to examine the effect of CEOs’ optimism on the asymmetry of cost behavior, namely cost stickiness (CS). A sticky condition occurs when the increase in costs due to the increase in sales is greater than the decrease in costs during the decrease in sales. This study measures CEOs’ optimism by conducting content analysis using the DICTION application. The results of this study indicate that the level of optimism increases CS. These results contribute to behavioral sciences in management accounting, especially in relation to the role of the upper echelon in corporate strategic decision-making. The results of this study have implications for the appraisal of management performance, when looking at the fact that there is sticky-cost behavior. This sticky behavior is thought to be intended to restore the situation to an advantageous position. The previous literature states that this asymmetry occurs due to deliberate decision-making by decision-makers. Unlike previous research, this study uses the upper echelon approach, with the individual CEOs as proxy. The upper echelon theory states that the characteristics of the leadership will affect a company's strategy, so they have an impact on company performance, including decision-making regarding resource-capacity management.
- cost behavior asymmetry
- upper echelon