When managers threaten the survival of their firms by failing to take actions as they perceive their environment as stable when it is (objectively) turbulent, this is known as:

Question

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Failing to take actions in a turbulent environment is a failure to reject the null hypothesis that the environment is stable, which is a type 2 error. A type 1 error would be taking unnecessary actions in a stable environment, and a type 3 error is not a recognized type of error in statistical hypothesis testing. Non-judicious decision-making is a broad term that can encompass a variety of errors and is not specific to this scenario.

When Managers Threaten the Survival of Their Firms by Failing