12851: Organizations’ Prioritization of Goals with Non-Predetermined Order (session 26381)

Research in performance feedback theory has extensively examined how organizations prioritize performance shortfalls on multiple goals with a clear importance order. Meanwhile, organizations’ prioritization of performance shortfalls on goals without a predetermined importance order has been largely overlooked. Using insights from regulatory focus theory, we argue that multiple goals with non-predetermined order trigger organizational promotion focus. This focus directs organizations to aim for gains and thus, to prioritize the smaller performance shortfall over the larger shortfall to assure a higher likelihood of gains. Accordingly, the presence of a smaller shortfall on another goal is expected to weaken the baseline relationship between performance shortfall and change on a focal goal. Moreover, we suggest this weakening effect caused by the smaller performance shortfall to be greater when the decision-making complexity is high. We empirically test our idea in the context of semiconductor industry and find support for our hypotheses. Our study contributes to research in performance feedback theory focusing on multiple goals and multiple performance feedback.

view paper (if available)