Effekts of Stress on the Brain

Leadership and management tasks put great demand on the brain’s “executive functions” (they are called like this). These higher cognitive processes take place in the prefrontal cortex of the brain. They enable goal-directed behaviour, decision-making, and self-control. Therefore they are vital for leadership tasks such as decision making, analysis, creative problem solving and negotiation.

We will discuss these effects in detail in the following section.

Effects of Stress on Reasoning, Decision Making & Leadership Behaviours

Cognitive Impairments

When senior leaders and executives operate under chronic or high-pressure stress, the very mental capacities they rely on to steer an organisation begin to falter. Stress negatively affects the working memory, cognitive flexibility, management of emotions and impulses inhibition. These functions help us to solve problems, make plans and manage emotions – i.e. these are exactly what we need to make complex decisions.

• Cognitive Impairments – Memory Working memory, cognitive flexibility are reduced.
• Planning and Organization – The ability to set goals, develop strategies, and organize thoughts and actions to achieve them are impaired.
• Reduced Creativity & Problem-Solving – Under stress, individuals struggle to think outside the box.
• Short-term Thinking – Short-term focus (i.e. survival focus) replaces long-term planning.

When stress hijacks cognitive functions, the executives become less effective: Problems remain unsolved, decisions informed and the strategic direction becomes unclear

Active / Impulsive Behaviours

In stressful situations, managers, but also organisations as a whole, often tend to act quickly instead of carefully considering things – often driven by external pressure and urgency.

• Action Vortex – Trapped in momentum and unable to deviate from a chosen path or revise decisions
• Action Bias – Believing that doing something is better than doing nothing. – When faced with uncertainty, we prefer to do something rather than do nothing.
• Overconfidence Bias – Overestimating one’s own/organisational competencies as well as one’s influence.
• Risky Decisions¹– Taking more risky decisions when there was a potential high reward.

Extraverted people in particular tend to exhibit active, impulsive behaviour under stress.

Leaders often want to create the impression of being in control through action. They want to appear as “doers”. At the same time, companies often reward activity and confident leadership, even when doing nothing would have been a better alternative.

Passive / Defensive Behaviours

On the other hand, stress can also lead towards defensive, risk avoiding behaviours. Analysis paralysis and avoidance behaviour prevent steady problem solving, progress and innovation.

• Analysis-paralysis. – Excessive analysis and preparation without making decisions.
• Hesitancy – Excessive fear of decisions and exaggerated perception of risks
• Withdrawal / Passivity – Avoidance of conflict, procrastination

Introverted people, in particular, tend to be passive or defensive under stress. This behavior conveys the impression of being overwhelmed and procrastinating. It often leads to a vicious cycle: Unresolved problems and a lack of progress often lead to urgency and crises that break through the paralysis.

From a career tactical perspective, passive or defensive behaviour in times of stress is often problematic for managers, as it can quickly create the impression of being overwhelmed, lacking activity, and hesitation.

Controlling Behaviours

Excessive controlling behaviours under stress form a separate category. The behaviour of “control freaks” is often a mixture of aggressiveness and defensiveness. On the one hand it drives constant intervention and activity. On the other hand this activity is characterised by lack of trust and avoidance of risks and often hinders any real progress.

• Micromanagement – Avoiding risks and mistakes by excessive measures of employee control and obsession with detail.
• Stubbornness / Lack of Flexibility – Being inflexible if team members or peers, who suggest other solutions, fixation on only one way of doing things.

This behaviour may lead to a vicious cycle: Micromanagement creates additional stress for both managers themselves and their team members. It is often a source of employee frustration and negative team energy.

Controlling behaviours often leads to an actual stand-still despite going full throttle or attempts to force results with great effort.

Habits & Automatic Patterns

Managerial behaviours under stress are also often shaped by experience, training, (organizational) culture and personality. Instead of reacting with simple instincts (e.g., fight-or-flight), managers rely on pre-learned leadership behaviours, such as standard processes, decision-making frameworks, delegation, or practiced crisis management routines.

• Reliance on Behavioural Habits & Routines – Defaulting to automatic behaviours and behavioural patterns rather than being flexible to the situation and considering novel solutions.
• Increased Rigidity in Personality Traits – On a good day our personality (measured by the Big 5 personality traits) is a mere tendency, we can flexibly react to the situation. On a stressed day, our behaviour becomes more rigid, behavioural preferences become overused.
• Rigidity in Thinking – People revert to familiar believes and pre-scripted slogans missing out on novel information and creative solutions.

Ideally productive habits allow leaders to handle excessive workload by relying on standard routines. However, if this behaviour is stretched too far, the necessary flexibility in complex or new situations falls by the wayside.

Over-reliance on Mental Shortcuts & Emotions

Most real-world decisions cannot not rely on a fully rational analysis of all available information. Business leaders and managers have to decide based on incomplete information, limited analysis and under time pressure.

As a result, even under normal circumstances, managers and leaders use rules of thumb, “fast and frugal heuristics”², as well as gut instinct and intuition. Ideally, these shortcuts are based on experience and take rational analysis into account. In addition, there is scope to take into account specific context and relevant data, ensuring that a fuller analysis is carried out when needed.

Under stress, these decision strategies are not longer balanced by data and rationality. Instead we observe:

• Over-Reliance on Decision Heuristics and Rules of Thumb: Over-use of shortcuts, without taking into account available information and considering limitations of heuristics applied.
• Over-Reliance on Intuition and Gut-Feelings: Relying on intuition without backing it up with data and analysis.
• Over-Reliance on Emotions (Affect Heuristic): Making decisions based on emotions (e.g. anger, sadness, spite, revenge etc.) rather than logic or evidence.
• Over-Reliance on Precedents and Past Experience (Priming bias): Past experiences are be over-generalised although they do not fit the current situation.
• Over-Reliance on Stereotypes: relying on generalised group characteristics rather than considering the individual

Cognitive Distortions

Additionally cognitive distortions and biases may increase in the face of increasing stress and predominant fight response. These systematic errors in thinking can lead to poor decision-making by reinforcing pre-existing beliefs, limiting consideration of alternative perspectives and giving up one’s own critical thinking. The following are common cognitive distortions that can impact reasoning and decision-making in organisations:

Biases of Perception

The following cognitive distortions are particularly common in fight mode:

• Tunnel vision / Selective perception: New information / alternative view points are ignored.
• Recency Bias: Give greater importance to recent events or information compared to older information
• Urgency Bias: Prioritise time-sensitive tasks / perceived urgency vs. important tasks and following a strategic plan

Biases of Information Processing

The following cognitive distortions are particularly common in fight mode:

• Confirmation Bias: Information is interpreted to support one’s prior knowledge, believes or assumptions.
• Black-and-White-thinking: Complex issues are reduced to two opposing extremes – with no room for nuances or grey areas. (Special form: friend-foe thinking – people or groups are categorised as either friend or foe). The corresponding psychological defence mechanism is called Splitting.
• Fundamental Attribution Error: Blaming situational (i.e. external) factors for one’s own failures but attributing others’ mistakes to their character (i.e. internal factors). i.e., lack of taking responsibility for own behaviours – at the same time tendency to blame others.
• Blaming / Scapegoating: Tendency to blame others if things go wrong.

Biases of Decision-Making & Commitment

The following cognitive distortions are particularly common in fight mode:

• Escalation of Commitment: Doubling down on a prior decision, opinions or actions despite evidence that past decisions were wrong or the course should be corrected. Persisting with past decisions / view points to remain consistent in order to avoid admitting a mistake.
  • Stress can have different effects: If the person reacts with the emotion anger (Fight Mode), this may lead to more escalation of commitment. On the other hand, if the individual reacts with fear (Flight Mode, Appeasement-Mode, Freeze or Capitulation), this can reduce escalation of commitment.³
• Illusion of predictability / Control Illusion: Overestimating one’s ability to understand and control complex dynamics. (These are sub-form of over-confidence bias.)

Biases of Social & Group Dynamics

Groupthink and Authority Bias are more likely to occur in flight mode and appeasement mode. Ingroup Bias / Outgroup Bias are general tendencies that increase with decreasing cognitive flexibility and do not depend on the kind of stress response.

• Groupthink: Lack of critical thinking as group members go along with the perceived opinion of other group members to avoid conflict. Adapting to other group members is a mechanism to reduce anxiety and stress.⁴
• Authority Bias: Tendency to yield to authority, going along with the opinions, decisions, or actions of perceived authority figures, often at the expense of critical thinking or personal judgment.
• Ingroup Bias / Outgroup Bias: Ingroup Bias describes the tendency to favour and support individuals who belong to the same group as oneself.  On the other hand, Outgroup Bias describes a tendency to dislike members of other groups. Ingroup and Outgroup bias are amplified under stress.⁵

Negative Emotional Effects

Aside from the general cognitive impairments and distortions, stress may also compromise emotional regulation and emotional intelligence. Specifically, stress can reduce empathy and the so called theory of mind (ToM) – i.e. the ability to understand and interpret the thoughts, emotions, and perspectives of others. This occurs because stress shifts cognitive resources towards survival-oriented, self-focused thinking.

Effects of stress include:

• Reduced Emotional Regulation (by way of reduced prefrontal cortex function)
  • The prefrontal cortex, which is important for impulse control, becomes less active under stress.
  • This makes it harder to modulate emotions and respond with emotional sensitivity.
• Reduced Emotional Intelligence
  • Emotional intelligence is important for self-awareness, empathy, communication an conflict resolution.
    • Chronic stress tends to dull empathy over time, whereas acute stress may cause situational changes in social behaviour (short-term situational shut-down of empathy).
  • A lack of emotional intelligence can contribute to misunderstandings, escalating conflicts and frictions in collective decision making. Such lack makes it harder to navigate complex organisations, hierarchies and manage multiple stakeholders.
• Lowered Tolerance for Frustration
  • Stress depletes physical and mental resources, making minor inconveniences feel much more aggravating than usual.
• Increased Self-Focus & Egocentrism
  • Under stress, people become more self-focused and less concerned with the emotions of others.
  • The brain prioritises own survival over social connection, leading to decreased compassion.
• Heightened Irritability (Amygdala Activation)
  • Stress amplifies emotional responses, often making people more irritable or defensive, i.e. tending more towards fight or flight.
  • This can lead to misinterpretations of others’ intentions and an increased likelihood of conflict.

Reduced Communication Ability

Stress can significantly impair communicative ability, affecting both verbal and nonverbal communication in several ways. This happens because stress disrupts cognitive processing, emotional regulation, and social awareness—making it harder to express thoughts clearly, listen effectively, and interpret others’ cues.

• Reduced Verbal Clarity & Expressiveness
  • Difficulties in articulating ones thoughts and feelings – Stress can lead to people unable to formulate and speak their thoughts
  • Speaking too quickly – As the nervous system is activated, people may rush their words
• Less Cohesion in Thoughts & Ideas
  • General cognitive impairments (see above), may make it harder to form cohesive thoughts and articulate them logically.
• Impaired Ability to Listen & Comprehend
  • Reduced Attention – Stress diverts cognitive resources, making it harder to focus on conversations.
  • Misinterpretation of Messages – Increased sensitivity or irritability can cause people to perceive neutral statements as negative or critical.
  • Reduced ability to detect sarcasm or humour – Under stress, social nuances can be harder to process
  • Selective Focus – Stress may cause people to focus only on certain aspects of a conversation (e.g., perceived threats or criticisms).
• Irritability & Agressiveness
  • More defensive or aggressive tone – Stress heightens emotional sensitivity, leading to short tempers, sarcasm, or passive-aggressive responses.
  • Difficulty regulating tone & volume – People may unintentionally sound harsh, impatient, or dismissive.
• Nonverbal Communication Changes
  • Less eye contact – Stress can make people avert their gaze or stare intensely without realizing it.
  • Tense body language – Clenched fists, crossed arms, or rigid posture can signal defensiveness or discomfort.
  • Changes in facial expressions – Stress may cause expressions to seem flat, forced, or overly intense.

Note that reduced communicative skills need to be seen in the context of reduced flexibility. If one tends towards the “fight” response, one many be more aggressive and less flexible in engaging into cooperative behaviours. On the other hand, if one tends towards the “Fawn / Placating” reaction, one will be less flexible to engage into necessary conflicts, competition and setting hard boundaries. In both cases, the lower flexibility will tend more towards “automatic” patters of behaviour.

Conclusion

It is clear that stress contributes to poor leadership performance, communication and decision-making. By understanding these biological mechanisms, business leaders can develop strategies to counteract the negative effects of stress on their cognitive functions.

As you navigate leadership challenges, remember that your awareness of your own stress responses gives you power over them. With practice and intentionality, you can learn to recognize when stress influences your decisions. This allows you to take steps to ensure your choices remain aligned with your long-term vision and are not driven by short-term survival instincts. Self-awareness and stress management may be important competitive advantages

Successful leaders recognise the presence of stress and their habitual responses. They apply tools to mitigate the impact of stress on their decision-making processes.

Further Reading & Footnotes

Further Reading

• Harms, P. D., Credé, M., Tynan, M., Leon, M., & Jeung, W. (2017). Leadership and stress: A meta-analytic review. The Leadership Quarterly, 28(1), 178–194. 
  https://doi.org/10.1016/j.leaqua.2016.10.006
• Yilmaz, S., & Kafadar, H. (2024). Decision-making under stress: Executive functions, analytical intelligence, somatic markers, and personality traits in young adults. Applied neuropsychology. Adult, 31(6), 1313–1327.
  https://doi.org/10.1080/23279095.2022.2122829
• Phillips-Wren, G., & Adya, M. (2020). Decision making under stress: the role of information overload, time pressure, complexity, and uncertainty. Journal of Decision Systems, 29(sup1), 213–225.
  https://doi.org/10.1080/12460125.2020.1768680
• Atsan, N. (2016). Decision-Making under Stress and Its Implications for Managerial Decision-Making: A Review of Literature. International Journal of Business and Social Research.
  https://doi.org/10.18533/ijbsr.v6i3.936
• Murdock, K. W., Oddi, K. B., & Bridgett, D. J. (2013). Cognitive correlates of personality: Links between executive functioning and the big five personality traits. Journal of Individual Differences, 34(2), 97–104.
  https://doi.org/10.1027/1614-0001/a000104
• Kowalski-Trakofler, Kathleen M. et al. (2001). Judgment and decision making under stress: an overview for emergency managers.
  https://dx.doi.org/10.1504/IJEM.2003.003297
  https://stacks.cdc.gov/view/cdc/9731/cdc_9731_DS1.pdf

Footnotes

1. Putman, P., Antypa, N., Crysovergi, P., & van der Does, W. A. (2010). Exogenous cortisol acutely influences motivated decision making in healthy young men. Psychopharmacology, 208(2), 257–263.
   https://doi.org/10.1007/s00213-009-1725-y   ↩︎
2. Todd, P. M., & Gigerenzer, G. (2000). Précis of Simple heuristics that make us smart. The Behavioral and brain sciences, 23(5), 727–780.
   https://doi.org/10.1017/s0140525x00003447
   https://pure.mpg.de/rest/items/item_2102521/component/file_2102520/content ↩︎
3. Tsai, M.-H., & Young, M. J. (2010). Anger, fear, and escalation of commitment. Cognition and Emotion, 24(6), 962–973. https://doi.org/10.1080/02699930903050631
   https://www.anderson.ucla.edu/documents/areas/fac/management/tsai_young_cem.pdf ↩︎
4. Chapman, J. (2006). Anxiety and defective decision making: An elaboration of the groupthink model. Management Decision, 44(10), 1391–1404. https://doi.org/10.1108/00251740610715713 ↩︎
5. Pan, D. N., Wolf, O. T., & Merz, C. J. (2021). Exposure to acute stress affects the retrieval of out-group related bias in healthy men. Biological psychology, 166, 108210. https://doi.org/10.1016/j.biopsycho.2021.108210
   https://www.sciencedirect.com/science/article/pii/S0301051121002039 ↩︎