Greve, Henrich R. (1998) Performance, aspirations, and risky organizational change

Question 1

GOAL

Answer 1

The impact of performance feedback on the probability of risky org change

Central assumption:
- Organizations learn from their experience by making the probability of changes conditional on their history

Question 2

Risk taking is

Answer 2

oriented toward goals: the behavior differs depending on whether the actor is above or below some aspiration level

Question 3

Organizational change can be seen as

Answer 3

Organizational change can be seen as an outcome jointly determined by motivation to change, opportunity to change, and capability to change.

Question 4

when people fail to attain a goal or aspiration level

Answer 4

• Individual risk taking appears to increase when people fail to attain a goal or aspiration level
• An aspiration level in individual, decision making has been described as a “reference point that is psychologically neutral” or as “the smallest outcome that would be deemed satisfactory by the decision maker”

Question 5

Social and historical aspiration levels

Answer 5

• First theory, Social comparison theory suggests that aspiration levels are determined by the performance of similar others > Reference group
• Within organizations, they may look at size, industry, and performance as a reference group. Even product, market or production methods. (can introduce selection bias)
• Second theory, Aspiration levels are determined by their performance history

Question 6

Failure to meet aspiration points leads to

Answer 6

Failure to meet aspiration points leads to problemistic search
- performance above aspiration > risk aversion
- performance below aspiration > risk-seeking

1b. Changing-slope: as performance gets worse, the likelihood of change goes up. When aspiration point hits; it very quickly drops (greater rate of change in ‘positive’ part