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(In)Consistent Performance Feedback and the Locus of Search.

Thomas Keil1, Evangelos Syrigos2, Konstantinos C Kostopoulos3

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This summary is machine-generated.

Organizations adjust their search strategies based on performance feedback from multiple goals. High performance on secondary goals can reduce exploration when primary goals are unmet, influencing innovation and learning.

Keywords:
behavioral theory of the firminconsistent performance feedbacklocus of searchmultiple goalsself-enhancement

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Area of Science:

  • Organizational Behavior
  • Strategic Management
  • Innovation Studies

Background:

  • Organizations often pursue multiple goals simultaneously, yet research on their response to performance feedback on these goals is limited.
  • Existing studies primarily focus on search intensity, neglecting the spatial dimensions of search (technological and organizational).
  • The self-enhancement perspective suggests that organizations may prioritize protecting their image when facing performance discrepancies.

Purpose of the Study:

  • To develop and test a novel theory on how performance feedback from multiple goals influences the locus of organizational search.
  • To investigate how performance on primary and secondary goals interact to shape search behavior.
  • To extend understanding of self-enhancement and learning from performance feedback in multi-goal environments.

Main Methods:

  • Utilized panel data from global pharmaceutical firms.
  • Applied the behavioral theory of the firm as a theoretical foundation.
  • Analyzed the relationship between performance feedback on multiple goals and the dimensions of search (technological and organizational).

Main Results:

  • Below-aspiration performance on a primary goal increases propensity for distal search (unfamiliar technology, external search).
  • Performance on a secondary goal moderates this effect, especially when the primary goal is underperforming.
  • Feedback inconsistency (low primary, high secondary goal performance) leads to decreased distal search in both technological and organizational dimensions.

Conclusions:

  • Performance feedback on multiple goals significantly regulates the locus of search choices.
  • The self-enhancement perspective is crucial for understanding how organizations manage search behavior under mixed performance feedback.
  • Findings underscore the importance of considering goal hierarchy and feedback inconsistency in organizational learning and strategic decision-making.