How Do Performance Goals Influence Exploration-Exploitation Choices?

Published Online:https://doi.org/10.1287/orsc.2019.13311

References

  • Audia PG, Greve HR (2021) Organizational Learning from Performance Feedback: A Behavioral Perspective on Multiple Goals (Cambridge University Press, Cambridge, UK).CrossrefGoogle Scholar
  • Bartsch SM, O’Shea KJ, Ferguson MC, Bottazzi ME, Wedlock PT, Strych U, McKinnell JA, et al. (2020) Vaccine efficacy needed for a COVID-19 coronavirus vaccine to prevent or stop an epidemic as the sole intervention. Amer. J. Prev. Med. 59(4):493–503.CrossrefGoogle Scholar
  • Bower JL (1970) Managing the Resource Allocation Process (Harvard Business School, Division of Research, Boston).Google Scholar
  • Brandenburger A, Polak B (1996) When managers cover their posteriors: Making the decisions the market wants to see. RAND J. Econom. 27(3):523.CrossrefGoogle Scholar
  • Christensen M, Sørensen SK, Knudsen T (2021) Tax bandits: Learning in an interactive environment, University of Southern Denmark Working Paper.Google Scholar
  • Cohen JD, McClure SM, Yu AJ (2007) Should I stay or should I go? How the human brain manages the trade-off between exploitation and exploration. Philos. Trans. R. Soc. Lond. B Biol. Sci. 362(1481):933–942.CrossrefGoogle Scholar
  • Cook KS, Yamagishi T (2008) A defense of deception on scientific grounds. Soc. Psych. Quart. 71(3):215–221.CrossrefGoogle Scholar
  • Cyert R, March JG (1963) A Behavioral Theory of the Firm (Prentice-Hall, Englewood Cliffs, NJ).Google Scholar
  • Daw ND, O’Doherty JP, Dayan P, Seymour B, Dolan RJ (2006) Cortical substrates for exploratory decisions in humans. Nature 441(7095):876–879.CrossrefGoogle Scholar
  • Denrell J (2003) Vicarious learning, undersampling of failure, and the myths of management. Organ. Sci. 14(3):227–243.LinkGoogle Scholar
  • Denrell J (2008) Organizational risk taking: Adaptation vs. variable risk preferences. Indust. Corporate Change 17(3):427–466.CrossrefGoogle Scholar
  • Denrell J, Liu C (2021) When reinforcing processes generate an outcome-quality dip. Organ. Sci. 32(4):1079–1099.LinkGoogle Scholar
  • Denrell J, March JG (2001) Adaptation as information restriction: The hot stove effect. Organ. Sci. 12(5):523–538.LinkGoogle Scholar
  • Earley PC, Connolly T, Ekegren G (1989a) Goals, strategy development, and task performance: Some limits on the efficacy of goal setting. J. Appl. Psych. 74(1):24–33.CrossrefGoogle Scholar
  • Earley PC, Connolly T, Lee C (1989b) Task strategy interventions in goal setting: The importance of search in strategy development. J. Management 15(4):589–602.Google Scholar
  • Ederer F, Manso G (2013) Is pay for performance detrimental to innovation? Management Sci. 59(7):1496–1513.LinkGoogle Scholar
  • Edmonds B (2001) Toward a descriptive model of agent strategy search. Comput. Econom. 18(1):111–133.CrossrefGoogle Scholar
  • Gaba V, Greve HR (2019) Safe or profitable? The pursuit of conflicting goals. Organ. Sci. 30(4):647–667.LinkGoogle Scholar
  • Gary MS, Yang MM, Yetton PW, Sterman JD (2017) Stretch goals and the distribution of organizational performance. Organ. Sci. 28(3):395–410.LinkGoogle Scholar
  • Gelles D (2022) The Man Who Broke Capitalism (Simon & Schuster, New York).Google Scholar
  • Greve HR (2003) A behavioral theory of R&D expenditures and innovations: Evidence from shipbuilding. Acad. Management J. 46(6):685–702.CrossrefGoogle Scholar
  • Greve HR (2009) Bigger and safer: The diffusion of competitive advantage. Strategic Management J. 30(1):1–23.CrossrefGoogle Scholar
  • Heath C, Larrick RP, Wu G (1999) Goals as reference points. Cognit. Psych. 38(1):79–109.CrossrefGoogle Scholar
  • Hoppe F (1930) Untersuchungen zur Handlungs- und Affektpsychologie. Psych. Forsch. 14(1):1–62.Google Scholar
  • Kanfer R, Ackerman PL (1989) Motivation and cognitive abilities: An integrative/aptitude-treatment interaction approach to skill acquisition. J. Appl. Psych. 74(4):657–690.CrossrefGoogle Scholar
  • Kerr S, Landauer S (2004) Using stretch goals to promote organizational effectiveness and personal growth: General Electric and Goldman Sachs. Acad. Management Perspect. 18(4):134–138.CrossrefGoogle Scholar
  • Larrick RP, Heath C, Wu G (2009) Goal-induced risk taking in negotiation and decision making. Soc. Cogn. 27(3):342–364.CrossrefGoogle Scholar
  • Laureiro-Martínez D, Canessa N, Brusoni S, Zollo M, Hare T, Alemanno F, Cappa S (2014) Frontopolar cortex and decision making efficiency: Comparing brain activity of experts with different professional background during an exploration-exploitation task. Front. Hum. Neurosci. 7. 10.3389/fnhum.2013.00927.CrossrefGoogle Scholar
  • Lee E, Puranam P (2016) The implementation imperative: Why one should implement even imperfect strategies perfectly. Strategic Management J. 37(8):1529–1546.CrossrefGoogle Scholar
  • Lee MD, Zhang S, Munro M, Steyvers M (2011) Psychological models of human and optimal performance in bandit problems. Cogn. Syst. Res. 12(2):164–174.CrossrefGoogle Scholar
  • Lejuez CW, Read JP, Kahler CW, Richards JB, Ramsey SE, Stuart GL, Strong DR, Brown RA (2002) Evaluation of a behavioral measure of risk taking: The Balloon Analogue Risk Task (BART). J. Exp. Psych. Appl. 8(2):75–84.CrossrefGoogle Scholar
  • Levine SS, Zajac EJ (2023) The other invisible hand: How markets—as institutions—propagate conformity and valuation errors. Strategy Sci. 8(3):323–348.Google Scholar
  • Lewin K, Dembo T, Festinger L, Sears PS (1944) Level of aspiration. Hunt JM, ed. Personality and the Behavior Disorders (Ronald Press, Oxford, UK), 333–378.Google Scholar
  • Locke EA, Latham GP (1990) A Theory of Goal Setting and Task Performance (Prentice-Hall, Inc, Upper Saddle River, NJ).Google Scholar
  • Locke EA, Latham GP (2002) Building a practically useful theory of goal setting and task motivation. Amer. Psych. 57(9):705–717.CrossrefGoogle Scholar
  • Locke EA, Latham GP (2006) New directions in goal-setting theory. Curr. Dir. Psych. Sci. 15(5):265–268.CrossrefGoogle Scholar
  • Locke EA, Latham GP (2009) Has goal setting gone wild, or have its attackers abandoned good scholarship? Acad. Management Perspect. 23(1):17–23.CrossrefGoogle Scholar
  • Manso G (2011) Motivating innovation. J. Finance 66(5):1823–1860.CrossrefGoogle Scholar
  • March JG (1988) Variable risk preferences and adaptive aspirations. J. Econom. Behav. Organ. 9(1):5–24.CrossrefGoogle Scholar
  • March JG (1991) Exploration and exploitation in organizational learning. Organ. Sci. 2(1):71–87.LinkGoogle Scholar
  • March JG (1996) Learning to be risk averse. Psych. Rev. 103(2):309–319.CrossrefGoogle Scholar
  • March JG (2003) Understanding organisational adaptation. Soc. Econom. 25(1):1–10.CrossrefGoogle Scholar
  • March JG, Simon HA (1958) Organizations (Wiley, Hoboken, NJ).Google Scholar
  • McShane BB, Böckenholt U (2017) Single-paper meta-analysis: Benefits for study summary, theory testing, and replicability. J. Consum. Res. 43(6):1048–1063.CrossrefGoogle Scholar
  • Mehlhorn K, Newell BR, Todd PM, Lee MD, Morgan K, Braithwaite VA, Hausmann D, Fiedler K, Gonzalez C (2015) Unpacking the exploration–exploitation tradeoff: A synthesis of human and animal literatures. Decision (Wash. D.C.) 2(3):191–215.Google Scholar
  • Meng Z, Shan S, Zhang R (2021) China’s COVID-19 vaccination strategy and its impact on the global pandemic. Risk Manag. Healthc. Policy 14:4649–4655.CrossrefGoogle Scholar
  • Noda T, Bower JL (1996) Strategy making as iterated processes of resource allocation. Strategic Management J. 17(S1):159–192.CrossrefGoogle Scholar
  • Olen H (2020) Jack Welch’s toxic legacy. Washington Post (March 3rd).Google Scholar
  • Ordóñez LD, Schweitzer ME, Galinsky AD, Bazerman MH (2009a) Goals gone wild: The systematic side effects of overprescribing goal setting. Acad. Management Perspect. 23(1):6–16.CrossrefGoogle Scholar
  • Ordóñez LD, Schweitzer ME, Galinsky AD, Bazerman MH (2009b) On good scholarship, goal setting, and scholars gone wild. Acad. Management Perspect. 23(3):82–87.CrossrefGoogle Scholar
  • Posen HE, Levinthal DA (2012) Chasing a moving target: Exploitation and exploration in dynamic environments. Management Sci. 58(3):587–601.LinkGoogle Scholar
  • Sang K, Todd PM, Goldstone RL, Hills TT (2020) Simple threshold rules solve explore/exploit trade‐offs in a resource accumulation search task. Cogn. Sci. 44(2):1–30.CrossrefGoogle Scholar
  • Schunk D (2009) Behavioral heterogeneity in dynamic search situations: Theory and experimental evidence. J. Econom. Dynam. Control. 33(9):1719–1738.CrossrefGoogle Scholar
  • Seijts GH, Latham GP (2005) Learning vs. performance goals: When should each be used? Acad. Management Perspect. 19(1):124–131.CrossrefGoogle Scholar
  • Simon HA (1947) Administrative Behavior: A Study of Decision-Making Processes in Administrative Organization (Macmillan, New York).Google Scholar
  • Simon HA (1955) A behavioral model of rational choice. Quart. J. Econom. 69(1):99–118.CrossrefGoogle Scholar
  • Song M, Bnaya Z, Ma WJ (2019) Sources of suboptimality in a minimalistic explore–exploit task. Nat. Hum. Behav. 3(4):361–368.CrossrefGoogle Scholar
  • Sterman JD (1989) Modeling managerial behavior: Misperceptions of feedback in a dynamic decision making experiment. Management Sci. 35(3):321–339.LinkGoogle Scholar
  • Sutton RS, Barto AG (1998) Reinforcement Learning: An Introduction (MIT Press, Boston).Google Scholar
  • The Economist (2020) Jack Welch transformed American capitalism as boss of GE. The Economist (March 5th).Google Scholar
  • Toplak ME, Sorge GB, Benoit A, West RF, Stanovich KE (2010) Decision-making and cognitive abilities: A review of associations between Iowa Gambling Task performance, executive functions, and intelligence. Clin. Psych. Rev. 30(5):562–581.CrossrefGoogle Scholar
  • Tripsas M, Gavetti G (2000) Capabilities, cognition, and inertia: Evidence from digital imaging. Strategic Management J. 21(1011):1147–1161.CrossrefGoogle Scholar
INFORMS site uses cookies to store information on your computer. Some are essential to make our site work; Others help us improve the user experience. By using this site, you consent to the placement of these cookies. Please read our Privacy Statement to learn more.