Organizational Learning from Performance Feedback: A by Henrich R. Greve

By Henrich R. Greve

Revisiting Cyert and March's vintage 1963 "Behavioral conception of the Firm", Henrich Greve deals an fascinating research of the way enterprises evolve according to suggestions approximately their very own functionality. in accordance with rules from organizational conception and social psychology and examine from many industries, it demonstrates that high-performing organisations fast reduce their charges of industry access, concepts and asset progress, yet low-performing businesses in basic terms slowly raise these charges. The research outlines the results of this habit for organizational survival and function, and indicates how you can increase agencies with functionality suggestions.

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Managers almost cannot help receiving information that gives opportunities to build adaptive aspiration levels. Certain types of education can create aspiration levels that seem natural to the decision maker. For example, financial methods of evaluating risky prospects typically rely on discounting budgeted expenses and income by a discount rate set to reflect the perceived risk of these income streams. This procedure has two noteworthy features. First, if the calculations are done correctly, then the correct aspiration level for the result (the net present value) is zero.

The combination of assigned goals and feedback is especially powerful, however, because it focuses attention on the shortfall in performance and makes attempts to improve the performance more likely than other coping strategies such as avoiding feedback or rejecting the goal (Kluger and DeNisi 1996). A long string of studies on goal-fulfillment behavior has revealed some important variations on the main findings. Goals and performance feedback give the greatest performance improvement on tasks that can be reached through brute force, such as increasing effort.

For example, managers use comparison with others to decide how much the organization should give to charity, causing organizations in similar network positions to have similar charity giving (Galaskiewicz and Burt 1991). Individuals often use social comparison to crosscheck information received from other sources. Researchers in the goal-seeking literature have noted that workers do not necessarily accept goals given by a manager, but will instead change them by using available information on what can and should be achieved in a given situation (Earley 1986; Locke, Latham, and Erez 1988).

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