Publication

Exploration and negative feedback – Behavioral learning, escalation of commitment, and organizational design

Keil, T., Kuusela, P. & Stieglitz, N., 10-Dec-2018, Organization Design. Joseph, J., Baumann, O., Burton, R. & Srikanth, K. (eds.). Emerald Group Publishing Limited, p. 147-176 30 p. (Advances in Strategic Management; vol. 40).

Research output: Chapter in Book/Report/Conference proceedingChapterAcademicpeer-review

How do organizations respond to negative feedback regarding their innovation activities? In this chapter, the authors reconcile contradictory predictions stemming from behavioral learning and from the escalation of commitment (EoC) perspectives regarding persistence under negative performance feedback. The authors core argument suggests that the seemingly contradictory psychological processes indicated by these two perspectives occur simultaneously in decision makers but that the design of organizational roles and reward systems affects their prevalence in decision-making tasks. Specifically, the authors argue that for decision makers responsible for an individual project, responses given to negative performance feedback regarding a project are dominated by self-justification and loss-avoidance mechanisms predicted by the EoC literature, while for decision makers responsible for a portfolio of projects, responses to negative performance regarding a project are dominated by an under-sampling of poorly performing alternatives that behavioral learning theory predicts. In addition to assigning decision-making authority to different organizational roles, organizational designers shape the strength of these mechanisms through the design of reward systems and specifically by setting more or less ambiguous goals, aspiration levels, time horizons of incentives provided, and levels of failure tolerance.

Original languageEnglish
Title of host publicationOrganization Design
EditorsJohn Joseph, Oliver Baumann, Richard Burton, Kannan Srikanth
PublisherEmerald Group Publishing Limited
Pages147-176
Number of pages30
ISBN (Electronic)978-1-78756-329-2
ISBN (Print)978-1-78756-330-8
Publication statusPublished - 10-Dec-2018
Externally publishedYes

Publication series

NameAdvances in Strategic Management
Volume40
ISSN (Print)0742-3322

    Keywords

  • Behavioral learning, Behavioral theory, Escalation of commitment, Exploration, Incentives, Innovation, Organization design

ID: 99870126