Revisiting Cyert and March's classic 1963 "Behavioral Theory of the Firm", Henrich Greve offers an intriguing analysis of how firms evolve in response to feedback about their own performance. Based on ideas from organizational theory and social psychology and research from many industries, it demonstrates that high-performing organizations quickly lower their rates of market entry, innovations and asset growth, but low-performing organizations only slowly increase those rates. The analysis outlines the consequences of this behavior for organizational survival and performance, and suggests ways to improve organizations with performance feedback.
Author(s): Henrich R. Greve
Year: 2003
Language: English
Pages: 228
Cover......Page 1
Half-title......Page 3
Title......Page 5
Copyright......Page 6
Contents......Page 7
Figures......Page 9
Tables......Page 10
Acknowledgments......Page 11
1 Introduction......Page 13
2 Foundations......Page 22
2.1 Behavioral theory of the firm......Page 24
Goal setting and performance......Page 32
Risk taking and goals......Page 35
Escalation of commitment......Page 38
Social comparison......Page 40
Group decision making......Page 44
2.3 Economics......Page 48
3 Model......Page 51
Natural aspiration levels......Page 52
Historical aspiration levels......Page 54
Social aspiration levels......Page 57
Direct learning......Page 60
Multiple sources......Page 61
Bias......Page 63
Search......Page 65
Risk taking......Page 68
Organizational change......Page 70
The timing problem......Page 76
3.3 Aspiration levels and adaptation......Page 77
3.4 How goal variables are chosen......Page 82
4 Applications......Page 88
Managerial risk perceptions and behavior......Page 89
Organizational risk taking......Page 94
4.2 Research and development expenditures......Page 99
4.3 Product innovations......Page 106
4.4 Facility investment......Page 115
4.5 Strategic change......Page 124
4.6 Summary of evidence......Page 133
5.1 Basic methods......Page 135
Hypothesis testing......Page 137
Social aspiration level......Page 138
Historical aspiration level......Page 141
Estimation of aspiration level adjustment speed......Page 142
5.3 General concerns in study design......Page 144
5.4 Radio broadcasting......Page 148
5.5 Shipbuilding......Page 152
6 Conclusion......Page 159
6.1 Practical implications......Page 160
6.2 Related research......Page 177
6.3 Future research......Page 192
References......Page 199
Index......Page 225
