Case Study using Metaphors - Assignment Essays

Attached is the assignment instructions and the two sources to use. No other outside sources and no plagiarism please. due by 7pm Jan. 01, 2023

Instructions

Goal: Create a case study analysis based on two scholarly studies that utilize metaphors (Morgan’s, or similar) to describe the functionality of organizations. After a concise but thorough analysis of the cases, summarize the benefits of using metaphorical devices in management practice. You will search for, find, and use two case studies from the APUS Library. FYI – there is an FAQ in the library with a question on how to find case studies.

Instructions: Students will write a 600-750 word case study analysis based on two case studies that use Morgan’s metaphors (or similar) as a tool to understand organizations. Review the Case Study Analysis procedure attached to this assignment. Obtain your case study articles from scholarly peer-reviewed journals in the APUS online library. Use case studies that were published within the last ten years. After a concise but thorough and clear delineation and analysis of the cases, complete the paper with a summary of what you gleaned from using metaphors to understand management practice within organizations.

Write using the APA style format, including a title page and references page (no abstract is required). When you upload your paper, also upload pdfs of BOTH case studies so that the professor can check your analysis.

Use the following outline in your summary (in APA format with a Title page and References page):

1. Identify the business problems of each of the cases; describe the metaphor(s) used.

2. Evaluate the proposed solutions. Are the solutions valid? Why or why not? How/why did the use of metaphor(s) assist in the solution?

3. Submit recommendations you propose beyond what is already stated in the cases.

4. State how the solutions will be communicated in each case. Do you agree? Why or why not?

5. At the end of the paper, write a paragraph expressing the takeaways/benefits of using metaphors in management practice.

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Public Management Review

ISSN: (Print) (Online) Journal homepage: https://www.tandfonline.com/loi/rpxm20

Introducing strategic measures in public facilitie

management organizations: external and internal
institutional wor

Ingrid Svensson, Sara Brorström & Pernilla Gluch

To cite this article: Ingrid Svensson, Sara Brorström & Pernilla Gluch (2022): Introducing strategic
measures in public facilities management organizations: external and internal institutional work,
Public Management Review, DOI: 10.1080/14719037.2022.2097301

To link to this article: https://doi.org/10.1080/14719037.2022.2097301

Published online: 07 Jul 2022.

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Introducing strategic measures in public facilities
management organizations: external and internal
institutional work
Ingrid Svensson a,b, Sara Brorström c and Pernilla Gluch a

aDepartment of Technology Management and Economics, Service Management and Logistics,
Chalmers University of Technology, Gothenburg, Sweden; bDepartment of Learning, Informatics,
Management and Ethics, Medical Management Center, Leadership in Healthcare and Academia,
Karolinska Institutet, Stockholm, Sweden; cDepartment for Business Administration, School of
Business Economics and Law, University of Gothenburg, Gothenburg, Sweden

ABSTRACT
To increase knowledge about the consequences of introducing strategic measures in
public organizations, for both intra- and interorganizational relationships, interviews
in eight – and shadowing in two – public facilities management organizations were
performed. Using a frame for data analysis based on institutional work, findings show
that, when introducing strategic measures, public officials worked to place their
organizations in a new position within the institutional field. During this process,
officials engaged in both external and internal institutional work. The findings high-
light how tensions between working externally and internally, influences public
officials’ day-to-day practices.

KEYWORDS Institutional work; public organizations; identity work; institutional change

Introduction

Prompted by administrative reforms such as new public management (Hood 1991),
strategic management emerged in the public sector in the 1990s as a means to meet
increased demand for improved performance (Poister, Pasha, and Edwards 2013;
Mitchell 2021). Consisting of both strategic planning and implementation (Bryson,
Berry, and Yang 2010), strategic management emphasizes the alignment of ‘an orga-
nization’s mission, mandates, strategies, and operations, along with major strategic
initiatives such as new policies, programs, or projects, while also paying careful
attention to stakeholders’ (Bryson et al. 2003, 496), or what Poister, Pasha, and
Edwards (2013, 524) have called the ‘big perspective approach’.

Although public organizations have increasingly introduced strategic measures as
a means to shape performance (Andrews et al. 2009b; Rosenberg Hansen & Ferlie
2016), knowledge about the actual work conducted when applying strategic manage-
ment measures in public organizations remains limited (cf. Bryson, Edwards, and Van
Slyke 2018), as does knowledge about the intra- and interorganizational consequences
of introducing strategic management (Gond, Cabantous, and Krikorian 2018). In this

CONTACT Ingrid Svensson ingrid.svensson.2@ki.se

PUBLIC MANAGEMENT REVIEW
https://doi.org/10.1080/14719037.2022.2097301

© 2022 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group.
This is an Open Access article distributed under the terms of the Creative Commons Attribution-NonCommercial-NoDerivatives
License (http://creativecommons.org/licenses/by-nc-nd/4.0/), which permits non-commercial re-use, distribution, and repro-
duction in any medium, provided the original work is properly cited, and is not altered, transformed, or built upon in any way.

http://orcid.org/0000-0003-2339-2097

http://orcid.org/0000-0002-5070-8491

http://orcid.org/0000-0003-0026-0112

http://www.tandfonline.com

https://crossmark.crossref.org/dialog/?doi=10.1080/14719037.2022.2097301&domain=pdf&date_stamp=2022-07-07

paper, we aim to narrow those gaps by investigating the work conducted by Swedish
public facilities management organizations (PFMO) when introducing a new type of
strategic planning measure known as strategic public facilities management (SPFM). To
that end, we combine empirical insights into strategic management in public organiza-
tions with the theoretical lens of institutional work (IW; Lawrence and Suddaby 2006),
specifically with reference to models developed by Gawer and Phillips (2013) and
Cloutier, Denis, and Langley (2016

Most studies on strategic management in the public sector have followed a causal
approach and assessed the practice according to whether its implementation has
succeeded or failed (Candel and Biesbroek 2016; Tosun and Lang 2017). There are,
however, exceptions to that rather static approach which instead see strategic planning
as a complex process that involves thinking, acting, and learning amongst both human
and non-human actors (Bryson et al. 2003). Brorström and Willems (2021), for
example, have shown that middle managers often confront conflicts when introducing
strategic measures by attempting to uphold the abstraction of strategic management
while at once delivering concrete actions. For another, Gond, Cabantous, and
Krikorian (2018) have demonstrated how introducing strategic measures can entail
power struggles between different types of actors within organizations (i.e. intraorga-
nizational relationships) and even between organizations (i.e. interorganizational
relationships). Even so, knowledge of how more ordinary actors with less formal
power engage in institutional work when introducing strategic management measures
remains quite limited (Pahnke, Katila, and Eisenhardt 2015).

Against that background, the context of our study is the management of public
premises in Sweden. In Sweden, PFMOs own non-residential premises that represent
approximately half of all heated spaces (Eriksson and Nilsson 2017) and are respon-
sible for the maintenance of all municipal premises, including schools, preschools,
sports centres, home for the elderly, heritage buildings, and administrative buildings.
However, as the maintenance of public buildings has been downgraded for years
(Hopland and Kvamsdal 2019; Uotila, Saari, and Junnonen 2019), there has been an
extensive need for expensive, large-scale renovations. In response, both practitioners
and researchers have called for a strategic approach to managing public premises
(Olsson, Malmqvist, and Glaumann 2015; Ramskov-Galamba and Nielsen 2016;
Bröchner, Haugen, and Lindkvist 2019), or what has been named strategic public
facilities management (Gluch and Svensson 2018; Svensson 2021). Practices associated
with that new orientation include strategic long-term planning for both rundown
buildings and other types of structures (Vermiglio 2011). There have also been calls
to deepen PFMOs’ collaboration with user organizations, including municipal schools
and nursing administrations (Svensson 2021). Along with those changes, IT systems to
calculate current and future needs have been introduced, and traditional public
practices have increasingly been combined with more business-like practices (cf.
Nielsen, Sarasoja, and Galamba 2016; Steen and Schott 2019; Svensson and Löwstedt
2021). On the whole, such new SPFM practices contrast how public buildings have
previously been managed – that is, when the ad hoc renovation and maintenance of
one premise at a time guided operations (Svensson 2021)—and thus challenge the
organizational identity of PFMOs.

Despite calls for strategic measures in PFMOs and in public organizations in
general, few studies have elaborated how the actual work is carried out and what the
measures taken implies for the organizations. Asking questions such as ‘What work is

2 I. SVENSSON ET AL.

conducted?’ ‘By whom?’ and ‘For what purpose?’, we rely on a theoretical framework
based on institutional work (IW). The framework offers a fruitful perspective when
studying processes in complex professional service organizations with novel ways of
working that challenge existing practices in both the organization and the institutional
field in which it is embedded (Lockett et al. 2012; Hampel, Lawrence, and Tracey 2017;
Sartirana, Currie, and Noordegraaf 2019; Giacomelli 2020). We also build on previous
research that has divided IW into externally and internally directed work (Gawer and
Phillips 2013) and on Cloutier, Denis, and Langley (2016) framework that highlights
the need for relational, conceptual, structural, and operational work during public
sector reforms. Our empirical data were collected using ethnographically inspired
methods that allowed examining IW in the moment. We focus on concrete actions –
that is, different types of IW and how they relate, not abstract or conceptual notions of
strategic management – and the work done by different actors (Smets and
Jarzabkowski 2013; Gond, Cabantous, and Krikorian 2018; Cardinale 2018; Gidley
and Palmer 2020). Altogether, our approach contributes to knowledge about the
consequences of introducing strategic measures in public organizations for both
intra- and interorganizational relationships.

Theoretical framework based on IW

Institutions are traditionally defined as ‘a relatively stable collection of rules and
practices, embedded in structures of resources that make action possible’ (Lawrence,
Suddaby, and Leca 2011, 53). By extension, institutional theory seeks to understand
how institutions affect the actions of organizations (Scott 1995; Gestel, Waldorff, and
Denis 2020). For instance, researchers using institutional theory have recognized how
macro ideas depend on meaning created by actors at local levels within organizations
(Lawrence, Suddaby, and Leca 2009). Nevertheless, most studies on institutions have
focused on the macro level, not on the ‘inner workings of organizations’ (Gestel,
Waldorff, and Denis 2020, 1741). An exception is the recent stream of literature within
institutional theory called institutional work, defined as ‘the purposive actions of
individuals and organizations aimed at maintaining, creating, and disrupting institu-
tions’ (Lawrence and Suddaby 2006, 215). The concept of IW aims to redirect institu-
tional scholars’ attention to the purposive, distributed, and agentic dimensions of
institutional change (Battilana and D’Aunno 2010; Lawrence et al. 2013). In that
process, applying an IW-focused lens can pinpoint factors that affect individuals’
abilities to shape institutions, as well as how, why, and when actors work to shape
institutions and practices and how they experience those efforts (Lawrence et al. 2013;
Hampel, Lawrence, and Tracey 2017; Cardinale 2018; Gidley and Palmer 2020). IW
also directs attention to the agency of so-called ordinary workers, not heroic institu-
tional entrepreneurs, meaning that agency is viewed as fragmented and distributed
across multiple actors and levels (Lok 2010; Raviola and Norbäck 2014; (Hampel,
Lawrence, and Tracey 2017).

A foundation for successful IW is the ability of actors to understand the underlying
fabric of the rules, norms, and perspectives of institutions and the relationships
between them (Battilana 2009). Thus, if the aim is to change institutionalized ways
of working, then the process of becoming familiar with the context to be challenged is
necessary (Cardinale 2018). For that reason, some actors can challenge institutiona-
lized practices more easily than others, especially if they have been in the organization

PUBLIC MANAGEMENT REVIEW 3

longer and know the rules of the game. For instance, in their study on public hospitals,
Liff and Andersson (2020) found that strategy experts who once had worked opera-
tively were better equipped to introduce strategic measures than experts with no
contextual know-how. That finding suggests that if actors want to challenge institu-
tionalized orders, then they need to be able to reflect on prior experiences and
positions and relate them to the current circumstances (Cardinale 2018).

Although the concept of IW aims to capture the experience and work of individual
actors (Lawrence et al. 2013), much research on IW remains ‘detached from practical
work in its literal meaning as actors’ everyday occupational tasks and activities’ (Smets
and Jarzabkowski 2013, 4). Furthermore, how individuals engage in IW in their daily
activities requires in-depth analysis (Battilana and D’Aunno 2009; Lawrence et al.
2013; Gond, Cabantous, and Krikorian 2018). In response to those trends, we next
present research on institutional work conducted by actors trying to challenge insti-
tutionalized practices. Such research forms the basis for our theoretical framework
used in data analysis, in which we seek to capture how individuals engage in IW in
their daily activities while introducing strategic measures in public organizations,
specifically SPFM in PFMOs.

Externally and internally directed IW

Institutional work refers to work conducted to change not only practices within an
organization but also in relation to other organizations within an institutional field
(Gawer and Phillips 2013). Defined by Scott (1995, 56), an institutional field is ‘a
community of organizations that partakes of a common meaning system and whose
participants interact more frequently and fatefully with one another than with actors
outside the field’. Members of a field share values and interests, and established ways of
behaving and interacting, i.e. the nature of their interactions are all defined by one or
more shared institutional logics (Gawer and Phillips 2013). Despite the institutional
field’s centrality in institutional theory, its definition remains rather loose. Indeed,
Zietsma et al’.s (2017) review of institutional research shows a trend in which the
boundaries of an institutional field have become more dynamic and less distinct.

In their research, Gawer and Phillips (2013) conducted an in-depth case study
involving archival studies and interviews on a private organization that had experi-
enced a dramatic shift when transitioning from a traditional supply chain logic,
dominated by computer assemblers, to a platform logic with new organizing principles
and a new organizational identity as a consequence. Amongst their results, they
detected a need to reconfigure the external environment and develop internal practices
in order to challenge practices within the institutional field. As those findings show,
external and internal IW are thus interrelated and can mutually reinforce each other.
In their study, Gawer and Phillips (2013) refer to externally directed IW as work
intended to engage other organizations within the institutional field, to introduce
them and their members to new practices developed by the organization, and to
influence the external acceptance of an organization’s new identity. Such endeavours
include legitimacy work, geared towards creating and disseminating new practices to
other organizations in the field to influence the organization’s position, and external
practice work, geared towards creating new practices performed outside the organiza-
tion that seek to engage other members in the field and reconfigure the field. Along
those lines, they emphasize the importance of building trust, being persistent, and both

4 I. SVENSSON ET AL.

recognizing and managing external tensions that might arise amongst other organiza-
tions in the same community or industry. By contrast, internally directed IW refers to
the introduction of new practices and ways of working; it includes internal practice
work, which is geared towards innovating new practices and enrolling organizational
actors in them, and identity work, which entails aligning the organizational identity
with individuals’ understanding of their professional identities and enabling new
identity claims in light of ongoing changes.

Altogether, Gawer and Phillips (2013) found that whereas the effects of externally
directed IW more obviously enabled changes sought by the organization, internally
directed work made the externally directed work possible. Thus, organizations trying
to change work practices and ‘challenge the rules of the game’ within their institutional
field need sufficient resources and skills to manage internally and externally directed
IW simultaneously. Moreover, as in past work (cf. Sartirana, Currie, and Noordegraaf
2019), Gawer and Phillips (2013) found that actors often have to negotiate their
identities in relation to their institutional and organizational fields and that profes-
sionals need support with working with their identities tied to their changing work
roles during transitions (Sveningsson and Alvesson 2003). Thus, enacting work roles is
not merely an issue in the organizational field. After all, professionals are increasingly
engaged in so-called individual identity work (Doolin 2002; Sveningsson and Alvesson
2003; McGivern et al. 2015; Giacomelli 2020), meaning that the introduction of new
practices oriented towards strategic management challenge not only existing work
practices but also the identities of the professionals involved (Noordegraaf 2015; Shams
2021). Even then, not all employees within an organization negotiate their roles and
identities in the same ways (Hemme, Bowers, and Todd 2020), since variations can
stem from differences in their organizational positions and professional backgrounds.

IW and implementing public sector reforms

Whereas Gawer and Phillips (2013) conducted their study in a private setting, Cloutier,
Denis, and Langley (2016) investigated the introduction of new practices due to a new
reform in Canada’s publicly funded healthcare system – namely, the transformation
from service-based to population-based care. Interested in what managers do when
facing constraints and opportunities while introducing new work practices, Cloutier,
Denis, and Langley (2016) developed a detailed understanding of the mix of activities
that managers engaged in to purposefully put new arrangements in place, including
navigating the ambiguities, pluralism, and contradictions associated with previously
ingrained structures, incentives, ideas, and practices. They concluded that as some
actors strive to disrupt previous institutionalized practices, others may reciprocally
strive to maintain previous arrangements that seemingly favour them. The difference
thus calls for different types of IW, categorized by Cloutier, Denis, and Langley (2016)
into four forms: structural, conceptual, operational, and relational.

Structural work is a disruptive form of IW and the natural antecedent of the other
types of work. Through structural work, new organizational charts are negotiated and
work roles assigned. Structural work is also recursive, for new organizational charts
might need to be renegotiated (Cloutier, Denis, and Langley 2016). At one of the
hospitals studied by Cloutier, Denis, and Langley (2016), the CEO’s initial organiza-
tional chart resulted in a highly conflictual process and thus had to be renegotiated,
because doctors feared that they would lose influence due to the new organizational

PUBLIC MANAGEMENT REVIEW 5

structure proposed by the CEO. Conceptual work refers to efforts to establish new belief
systems and norms by implementing new concepts and ideas. Such work needs to be
repetitive and connected to the other forms of work, especially operational work, which
entails efforts to implement concrete actions affecting the everyday behaviours of
frontline employees. However, as shown by Cloutier, Denis, and Langley (2016),
conceptual work tends to be detached from existing operations. They found that
connecting new representations with operational activities was an ongoing challenge
and that the people on the ground contrasted their daily operations with the overall
aim of the new reform. Consequently, they did not understand how they could per-
form the new practice given that their professions focus on personal one-to-one
meetings. Last, relational work, referring to efforts to build linkages, trust, and colla-
boration between people involved and affected by the introduction of new work
practices, underpins the other three forms of IW and is therefore necessary to intro-
duce new practices. Of all four types of work, relational work especially facilitates the
other types.

Research methodology

To examine IW conducted while introducing strategic management measures in
public organizations, we conducted a qualitative study designed to understand how
different types of IW relate and their consequences for the organizations.

Data collection

As detailed in Table 1, the study entailed case studies in two PFMOs, an interview
study involving 12 interviews with representatives from eight Swedish PFMOs, and
a workshop. To strengthen the relevance of our research questions, we organized and
supervised a workshop in November 2019. The workshop invited representatives from
PFMOs across Sweden, as well as their collaborators and stakeholders, to discuss
organizational challenges and changes related to their current introduction of new
work practices in relation to SPFM in PFMOs.

The workshop also informed the design of the interview study, which along with the
case studies was conducted between March and October 2020. All data were collected
by the first author of the paper, hereafter referred to as ‘the researcher’. Although we
initially planned to conduct the interview study prior to the case studies in order to
gain an overview of the challenges at hand and better know what to look for in the in-
depth case studies, the outbreak of the COVID-19 required some interviews in the
interview study to be rescheduled and performed in parallel to data collection in the
case studies.

Interview study
Initially, an email was sent to municipalities in Sweden requesting interviews with
individuals who had an overview of current challenges for PFMOs and insight into
working with SPFM. Based on the responses, 12 interviews were conducted in eight
PFMOs, for a sample representative of PFMOs in Swedish municipalities with 40,000
to 560,000 residents. The interviewees are described in Table 1. The interviews took
approximately 1 hour and were conducted face-to-face either on-site or online; they
were all semi-structured (Flick 2014) and the interviewees were encouraged to openly

6 I. SVENSSON ET AL.

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PUBLIC MANAGEMENT REVIEW 7

discuss whatever came to mind related to the questions asked. Overall, the interviews
focused on experiences with strategic measures, current challenges facing PFMOs, new
roles and collaborations.

Case studies
Two case studies were conducted at FacilityDep and FacilityUnit. Sampling for the case
studies was purposive (Flick 2014), with the criterion that the organizations had to be
in the process of introducing strategic measures (i.e. SPFM) that were altering current
practices. In that respect, the organizations were selected to fit our study’s objectives
and deemed to be ‘appropriate cases’ (Flyvbjerg 2006). FacilityDep was identified via
contacts generated in connection to the workshop, whereas FacilityUnit was chosen for
convenience’s sake because it is located near our home municipality and could be
visited during the COVID-19 pandemic.

FacilityDep and FacilityUnit operate within a growing metropolitan area in Sweden,
and each serves approximately 50,000 inhabitants with public facilities. Both organiza-
tions had been highlighted within the public facilities management community as
frontrunners in introducing and developing SPFM practices, which made them sui-
table contexts for our study. The two cases were also compatible with the change
process occurring within PFMOs at the time of the study.

Typically, the workforce of PFMOs is approximately 1–2% of the total workforce in
a given municipality and consists of employees with various levels of education,
ranging from no higher education to master’s degrees. Some have previously worked
within user organizations (e.g. schoolteachers and healthcare personnel), while others
have worked in the private real estate and construction sector. Several are employed as
facility managers. With the introduction of SPFM, the occupational role of facility
managers at the time of the study was undergoing change, and they were expected to
act both operatively and strategically.

In addition, a new category of employees working strategically, called strategists,
was found to have gained influence over issues related to strategic planning in relation
to facilities within municipalities. To capture their view on SPFM, one strategist in
each organization was shadowed. Shadowing is a form of observation that enables an
understanding of daily work practices (cf. Czarniawska 2007). From late March until
early June 2020 (10 weeks), a strategist at FacilityUnit responsible for planning future
public care premises, libraries, and parking garages was shadowed. The strategist,
a former occupational therapist, had worked as a planner at FacilityUnit for a few
years with less responsibility and authority than in her new role. Between May and
October 2020 (15 weeks), a strategist at FacilityDep was shadowed as well. The role had
only recently been introduced, and the strategist’s primary responsibility was to
conduct an inventory project during which all facilities and their inventory were
coded. The objective was to develop a plan to manage the total building stock within
the municipality in a more strategic, long-term way. The person in the position had
previously worked in FacilityDep as an administrative facility manager responsible for
budgeting. Throughout the shadowing period, the researcher had weekly scheduled
interviews with the two strategists to discuss key activities and how they had experi-
enced the week. All interviews were recorded and transcribed in verbatim. In addition,
conversations were held following activities such as meetings with external stake-
holders, and informal conversations were conducted during lunches, coffee breaks,
and car rides to meetings.

8 I. SVENSSON ET AL.

About 200 hours of observations were conducted during the shadowing: approxi-
mately 150 hours in FacilityDep and 50 hours in FacilityUnit. During meetings and
presentations, the researcher was introduced as ‘a researcher who is following the work
with SPFM’, adopted a silent role, and took extensive field notes. During meetings with
less participants, the researcher sometimes asked follow-up questions if observations
were unclear. Due to the COVID-19 pandemic, the researcher observed meetings both
online and on-site.

Interviews were also conducted with the strategists’ closest colleagues, who were
sometimes followed to meetings to gain a broader picture of what was happening
within the PFMOs studied and in the municipality in relation to FM. The questions
asked during interviews varied depending on the respondent but were all geared
towards experiences of strategic measures, current challenges for PFMOs and SPFM,
and perceptions of the strategist’s role. The researcher also had access to organizational
documents, including role descriptions and PowerPoint presentations, which provided
background descriptions of PFMOs’ organization and work.

Data analysis

All recorded material was converted into text and along with notes and documents was
read through several times. The first round of analysis was inductive, and to capture
lived experiences, we conscientiously sought to use the informants’ terms (Gioia,
Corley, and Hamilton 2013) when describing the work conducted and the organiza-
tional and individual consequences of working with SPFM. In the first round of
analysis, we allowed the data to surprise us (Maanen et al. 2007) and ended up with
19 codes sorted into six categories. The empirical codes were then sorted into six
general themes (Braun and Clarke 2006) that encapsulate what introducing SPFM has
meant for public facilities management. Those themes were finally related to (Gawer
and Phillips 2013) framework of internal and external IW (see Figure 1).

Figure 1. Overview of coding structure after first inductive round of analysis.

PUBLIC MANAGEMENT REVIEW 9

Ta
bl

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10 I. SVENSSON ET AL.

Thereafter, in a second, more abductive round of analysis, we employed the frame-
work informed by both Gawer and Phillips (2013) and by Cloutier, Denis, and Langley
(2016). Our data analysis captured the presence of an additional type of IW (cf. Gidley
and Palmer 2020), which we have named positioning work. Thus, data analysis was
informed by both our theoretical framework and the empirical material (see Table 2).

Results

Internally directed IW

Increasing knowledge about buildings
To be able to engage in strategic planning, many PFMOs have recently implemented
the measure of inventorying their building stock. With help of information technology
(IT), PFMOs have placed all information regarding their premises collected from the
inventorying into IT systems and produced reports containing future costs and
planned maintenance. That digital, fact-based type of working has deviated from
how the past was narrated, when a major part of the knowledge was supposedly built
tacitly upon individual know-how, as the project manager for maintenance at
FacilityDep described: ‘An old man with his own little toolbox [. . .] had all of the
information in his head’ and ‘Before, information was stored in folders, somewhere
where no one could find them’. New developments have deviated from that status quo,
as the project manager described: ‘It’s black and white now. We build everything on
hard facts’.

The knowledge that the inventorying brought with it – namely, the possibility of
conducting strategic planning – was viewed as a means to advocate positioning PFMOs
differently within the municipality. While discussing the benefits of such inventorying
in a meeting, the head of FacilityDep suddenly realized, ‘With that information, we’ll
be able to have a much higher status and another role within the municipality’.
However, while managers reported that facilities maintenance work was becoming
digital, several non-managers did not commit to the direction indicated by computer
simulations, as suggested by their manager. A building inspector at FacilityUnit
explained during an observed meeting:

You’re supposed to follow what the IT system declares, for example a red line in a spreadsheet
shows when a building is finished. But those of us who work with it in practice disagree on what
the system is stating. I don’t personally think that a building can be finished, for example. [So]
I don’t commit to that line.

Thus, not all PFMO officials were equally engaged in developing and implementing
new work practices connected to SPFM.

Introducing strategically oriented work roles
It used to be common for facility managers and other related roles to come from the
user’s side (e.g. former teachers) without any background in the real estate or con-
struction. With PFMOs now identifying and adopting work practices and routines
from the primarily private sector, the development of existing work roles and influ-
ences from the private sector has guided the change. As a consequence, facilities
managers were given the same type of roles and responsibilities that they would have
had if they were employed in the private sector. For that reason, while many facility
managers had been responsible for multiple buildings at one location, they have

PUBLIC MANAGEMENT REVIEW 11

become responsible for different ‘knowledge areas’—for example, all schools in
a municipality. That transition was viewed as complicating the alignment of new,
more strategically oriented roles with previous organizational and individual profes-
sional identities:

For those who’ve worked with us for a long time, to go from ‘I do planned maintenance and
give additional support on demand’ to on their own embrace the overall picture of the needs,
for example, of a social service unit, has not been painless. It’s required a substantial adjust-
ment. (Interviewee 5a, Head of facilities department)

Several facility managers and strategists felt that they lacked the proper knowledge to
take on those new responsibilities. One manager (PFMO 6) said, ‘Nowadays, facility
managers should be reasonably good in many areas and act as project managers. It can
be a challenge, in terms of skills, to find such staff’. One interviewee even stated, ‘It goes
against the nature of being a facility manager to think strategically’ (Manager
PFMO 7). Thus, the findings reveal a tendency for managers to be rather harsh in
their conclusions, including that some employees cannot be strategic and that facility
managers cannot think strategically. Internally, those perceptions were believed to
influence individuals’ possibility to conduct successful identity work, which results in
their feeling unfit for the job upon sensing that their competencies are no longer
needed.

Making sense of new work roles and positions
In several of the PFMOs, people were hired to work strategically: to ‘solve the puzzle’
and ‘see the big picture’. However, the content of that ‘big picture’ was described
differently by the interviewees and was not well defined. Consequently, it was difficult
for the strategists to meet the expectations placed upon them. The newly hired
strategist at FacilityUnit described her work as being ‘fuzzy’:

I work with fuzzy work. I’m everywhere! I translate my managers’ ideas into reality, develop
shared languages, mediate coordinate, and collaborate. I’m a detective.

As a consequence, it had been difficult for some interviewees to find a place and
professional identity within their organizations. An interviewee from PFMO 4 in
a position similar to the strategists in FacilityUnit described being ‘thrown into’
situations and being expected to collect information from various sources, create
new forms of collaboration, develop practices, and work strategically. However, after
two years in the role, she claimed that none of what she expected from her new role had
been achievable and that she still conducted conventional financial tasks (e.g. budget-
ing) in line with her previous work role.

The new role has often involved being engaged in processes at different organiza-
tional levels and becoming knowledgeable in several competencies. For example, the
strategist at FacilityUnit felt that she had to be knowledgeable in advanced building
terminology:

I’m supposed to create a summary of how we at the facilities department view the new
SportsCenter. There are many people from our department involved in that endeavour, and
all of them have their different views. To make the summary, I have to be more knowledgeable
than I’ve ever been before. [. . .] For example, I don’t know the right terms for a badminton
court or what it’s made of.

12 I. SVENSSON ET AL.

Similarly, the strategist at FacilityDep expressed that she had to know how to use
specific IT systems as well as technical aspects related to planned maintenance. Her
manager described the role as that of a ‘midfielder’ who knows a little bit of everything.

According to the strategist, her time in the role was both rewarding and frustrating.
That perception aligns with the reported experience of the strategist at FacilityDep:
‘You have to work on your self-confidence and remember that you’ve learnt a lot. [. . .]
It’s been frustrating yet rewarding. Oftentimes I feel stuck. I feel like I don’t know
anything about anything’. Such experiences bear witness to roles that imply learning by
doing and being carved out by the employees themselves.

Externally directed IW

Changing the scope of FM practice and developing a new organizational identity
To become more strategic, several managers described wanting the PFMOs to shift
from primarily being a service unit to becoming active in planning and decision-
making regarding current and future public facilities. To do that, the interviewees
mentioned needing to shed the previous organizational image and fight for their new
position. One manager said:

The problem is that everyone else within the municipality has the expectation that we [the
PFMO] are a service unit that fixes whatever others want us to fix. That image must be shed!
(Interviewee 6)

In their struggle for a new position, the PFMOs have sought a role as an
organization that works for everyone’s best interest. However, several interviewees
claimed that to assume the new role, the PFMO, as an organization, needs another
formal organizational position, preferably one located centrally within the muni-
cipal organization. According to the interviewees, they need a strengthened orga-
nizational mandate to make decisions regarding, for example, whether a particular
building should be kept or demolished and/or what the use of a particular building
should be. One interviewee said, ‘We don’t want to be a pure ‘deliverer’, so we
need to have another position within the hierarchy of the municipality. [. . .] That
would benefit everyone within the municipality’ (Interviewee 5b, Improvement
Manager).

The interviewees also claimed that a stronger position within the municipal orga-
nization would imply that the PFMO is not an expert administration but rather
a central administration that serve other administrations:

The school administration, for example, they work for the well-being of the school. However,
we and those who are in the city management administration work for the whole city; we can’t
work for one or the other. [. . .] We always have to think big and not forget the bottom line.
(Interviewee 10, Head of FacilityUnit)

That way of claiming a new position has signalled a shift in identity at both the
organizational and individual level. One example mentioned was transitioning
from being the ‘nice guys’ to ‘the angry doorman’. One interviewed manager said,

We used to be the nice guys and focused on service. [. . .] But now the pendulum has swung;
good service is not just saying ‘Yes’. [. . .]. For example, if the school wants a wall repainted but
we think that they need a new key cabinet, then we opt for the key cabinet. (Interviewee 5,
Manager, PFMO 6)

PUBLIC MANAGEMENT REVIEW 13

Another interviewee used the metaphor of a bus to describe the current situation:

They [representatives from user organizations] used to drive the bus, but we have turned that
around. Now we’re driving the bus. We decide which premises are in bad condition. (Facility
manager, FacilityUnit)

At the same time, facility managers working hands-on with buildings also need to be
customer-oriented. One interviewee explained that shift:

We work a lot with customer service. Previously, the facility manager who worked hands-on
with the buildings could get away with being rude if the problems were fixed. Nowadays, you
have to solve the problem and be nice. (Interviewee 4a, Head of Technical Administration
Unit)

In both examples, the interviewed professionals perceived that they had to adjust their
behaviour and personal treatment, including mood, as they participated in work aimed
at changing the organizational identity and, in the long run, the role and organizational
position within the municipality.

Introducing new work practices influenced by outsiders
To become strategic, several municipalities recruited managers from outside the public
sphere who were experienced with working strategically. Some even argued that the
ongoing changes imply that the PFMOs have primarily been viewed as belonging to the
real estate sector. The head of the Head of FacilityUnit said,

It’s important to bring the facilities forward; that’s the core of our business, it’s what we do.
[. . .] To us, the industry sector that we belong to is real estate. We’ve been forced into the public
sector, but what we do is something else.

Even so, adopting new work practices and routines influenced by the private real estate
sector has caused problems for relations with the user organizations. At the
FacilityUnit, employees have been given positions of power and missions equal to
similar positions in the private sector. However, because there were no equal counter-
parts at other units, at meetings the new roles had caused uncertainty about how
decisions were to be made. One example concerned the healthcare administration,
which typically wanted to discuss issues regarding their facilities at meetings with top
managers from Facility Unit; nevertheless, at FacilityUnit, that topic was now dis-
cussed at a lower organizational level. According to a facility manager at FacilityUnit, it
has resulted in confusion about whom to send to meetings.

The same problem was brought up during a regular meeting between representa-
tives from the municipal healthcare administration and FacilityUnit. According to the
financial officer representing the municipal healthcare administration,

It feels odd that our head of unit isn’t here. None of us here have any idea of what she thinks,
and none of us have a mandate [to make decisions] about the issues that you want to discuss.
Before, those things were discussed at other types of meetings. (Observation of meeting at
Facility Unit, spring 2020)

Such uncertainty created tensions within the municipality as the work by PFMO
officials to change the PFMOs’ organizational position was not anchored with the
user organizations.

14 I. SVENSSON ET AL.

Introducing new work practices internally at a PFMO was not easily translated to
the external environment and entailed changes in previous working relationships. It
could even result in negative feelings, as expressed by a facility manager at Facility
Unit:

For instance, the school administration, it hasn’t been easy. Suddenly, someone else is making
the decisions. It’s a culture clash. The person that I used to collaborate with on the school’s side,
I cannot collaborate with her now. I’ve moved up one level in the organization. [. . .] There’s
been a shift in responsibilities. (Interviewee 9d, Facility manager, schools and preschools)

Changes in external relationships
Interviews also showcased that besides uncertainty about whom to collaborate with,
the new position also meant that they had to deal with people’s jealousy. The head of
FacilityUnit said,

Others have been jealous. They wonder how we as a department can take command and make
decisions on such huge issues that have major consequences linked to [municipal] finances.

Questions arose about who the interviewed employees were in relation to whom they
were before and in relation to others. As a consequence, the ‘culture clash’ was said
to consume a great deal of time because the PFMO professionals had to commu-
nicate and educate others about the change and new work practices. Managers,
strategists, and facility managers described themselves as ‘ambassadors’ for PFMOs’
new positioning and associated practices, as expressed by the Head of FacilityUnit:
‘I’m an ambassador, and I’m talking about that, I think, every day, every minute. And
my manager is too’.

The change has also affected the strategist at FacilityUnit, who is tasked with
presenting the new way of working to user organizations at various meetings.
However, precious time was spent convincing and negotiating with user organization’s
representatives to make them accept ideas put forward by FacilityUnit. At one pre-
sentation that she made on SPFM, the strategist was supposed to ask the representa-
tives to develop 10-year plans for the facilities needed. However, doing so proved
difficult because the representatives from the user organizations argued that the way in
which the municipality is organized prevents those types of ideas from becoming
realities, which makes the suggested changes challenging to conduct in practice. One
representative of a healthcare administration even argued the following:

We can’t plan 10 years ahead in public organizations because the politics can change from
one day to the next. For example; Suddenly a tennis court can be suggested out of nowhere!

Therefore, meetings with representatives from the user organizations often became
tense, as explained by the strategist at FacilityUnit:

Those meetings: They’re on edge. They can be heaven or hell. The three of us [i.e. the school
administration, the city administration, and the FacilityUnit] represent two perspectives, with
us on one side and the school administration and the city administration on the other, and
those perspectives can collide uncontrollably.

The tensions visible when new work practices were introduced have thus prompted
conflicts between organizations within the municipality. That development signals that
the new work practices and positions developed by and within PFMOs have not been

PUBLIC MANAGEMENT REVIEW 15

anchored or negotiated with their collaborators. In turn, the situation has meant that
despite efforts to work in everyone’s best interest, a great deal of time were spent
convincing others of certain perspectives and defending one’s own perspectives.

Analysis and discussion

In our study, we aimed to investigate the work conducted when strategic management
is introduced into public organizations. Our findings illustrate how that introduction
has made actors within PFMOs engage in different types of IW and how those forms of
work have been related to and affected each other. For one, ‘being strategic’ was clearly
viewed as being responsible for the ‘big picture’, which closely connects with Poister
et al’.s (2015) ‘big perspective approach’. For the managers at PFMOs, that circum-
stance was expressed as a wish for a role and position that would enable them to make
decisions affecting other individuals and organizations. The shift was expressed as
becoming more than a service unit and instead being responsible for future directions
with effect for the whole municipality. Corroborating previous research (Gond,
Cabantous, and Krikorian 2018), we also observed how ‘being strategic’ made
PFMOs claim a higher status than they had before. Along with working both externally
and internally, our findings also show that making the shift implies all four forms of
IW described by Cloutier, Denis, and Langley (2016), all with both internal and
external dimensions (Gawer and Phillips 2013).

The change of practices when it came to operational work meant that being able to
see the ‘big picture’ required the actors to have complete knowledge about the build-
ings in their charge. Doing that in a strategic manner has meant collecting information
about the buildings and entering it into a database as a means to aid future decision-
making. To make actors, both internally and externally, see the necessity of that
change, it was also necessary to create a narrative showcasing how those new practices
would improve organizational performance. One way to do that was to describe the old
organizational practices as being insufficient. To narrate past practices as being inade-
quate is a form of conceptual work aimed at legitimizing changes, both internally and
externally (Cloutier, Denis, and Langley 2016; Gawer and Phillips 2013). However,
such work was not done without tension, for some actors within the PFMOs disagreed
with the new role or wanted to comply with new work practices. That shift towards
become strategic thus meant that there was an internal struggle and ongoing negotia-
tions about what new practices were needed and why.

At the same time, external work occurred alongside relational and conceptual work
because the new working practices meant that actors at PFMOs received new, addi-
tional responsibilities but did not always have a counterpart at collaborating organiza-
tions. To answer to the new roles of the PFMOs, the user organizations have also
needed to adjust to the new practices, which has been done by holding many meetings
at which the new order has been presented and discussed. Here, there was a primary
focus on presenting, rather than discussing. That process illustrates an instance of
external conceptual work. However, such attempts to make other organizations recog-
nize the need for the ongoing change was probably also important for internal
practices, since a fine line separates internally from externally oriented conceptual
work.

16 I. SVENSSON ET AL.

Our findings also reveal tension between, on the one hand, relational work at
meetings and the conceptual work of narrating the organization in a new way and,
on the other, structural work. In our case, structural work has implied a need to not
only take greater responsibility voluntarily but also to have another formal organiza-
tional position and to be able to formally make decisions that affect others. At the time
of our study, however, we detected a discrepancy between the conceptual work and the
structural work as the roles and positions of employees at PFMOs became discussed in
new ways and as the employees received more responsibility internally. Those devel-
opments were not decided upon at any formal level within the municipality, and their
responsibilities thus remained undefined and somewhat uncertain, as seen in the
expressions of ‘being everywhere’ and doing ‘fuzzy work’. Arguably, those roles were
introduced without preparing the organization for them, even when the IW currently
undertaken was liable to effect structural and formal changes in the future (Cloutier,
Denis, and Langley 2016). Nevertheless, the ongoing work and the new operational
practices introduced precipitated discussions of what kind of organizations PFMOs
should be in the future, meaning that all of those forms of IW together prompted
a shift in organizational identity and ongoing identity work.

Beyond that, changes to become strategic were discussed in terms of the conse-
quence that new actors were entering the organization. For instance, when managers
from the private sector entered the organization, they transferred their experiences to
the new organizational context, albeit sometimes without being sufficiently attentive to
their new surroundings or personnel (Cardinale 2018). That being said, our empirical
data show how new work practices that challenge the organizational identity of PFMOs
were described in ‘harsh’ ways, specifically when it came to facilities managers’ ability
to work strategically, which was described as non-existent. Cloutier, Denis, and
Langley (2016) have underscored the importance of providing occasions to accom-
modate the ambiguity inherent in changes that drastically challenge previously taken-
for-granted ideas, including the introduction of strategic management measures. We
argue that engaging in identity work could be such an occasion.

The employees themselves responded in diverse ways to the changes, some by
adapting to the new practices, while others refused to follow new directives.
Moreover, representatives from the user organizations were confused by the new
orders of PFMOs. In that sense, SPFM is not a reform delivered from above (cf.
Cloutier, Denis, and Langley 2016; Gond, Cabantous, and Krikorian 2018) but rather
a combination of different directives and requirements that are introduced from the
top-down as well as from the bottom-up (Svensson 2021). Thus, different types of
actors have shown different types of engagement and relations to SPFM; some part of
developing it while others were forced to adapt to it. That dynamic has implications for
the identity work since it portrays a tension between the change sought by managers,
their new context, and the work practices and experiences of employees. It also stresses
the need to allow employees to engage in figuring out their new work roles and
identities for themselves. Here, it is important to understand the individual socializa-
tion process needed if the once private managers want their employees to become and
act strategic.

The work conducted when introducing strategic measures within PFMOs and
promoting it to collaborators, especially the work to reposition PFMOs, resembles
the types of IW described by Gawer and Phillips (2013) and Cloutier, Denis, and
Langley (2016). However, parts of the IW observed in our study cannot be fully

PUBLIC MANAGEMENT REVIEW 17

captured by what has previously been reported in studies on IW. Although it bears
similarities, it cannot be captured within legitimacy work, for the work that we
observed not only involved influencing other actors but also physically occupying
organizational space. It can neither be fully captured by what Cloutier, Denis, and
Langley (2016) has called structural work, defined as work that establishes formalized
roles. For instance, the roles that we observed to be developed were not only estab-
lished but also placed in a different organizational context than before. This work, what
we call positioning work (see Table 2), represents a form of work that specifically
challenges both the existing organizational identity and previous positions. Thus, it
implies work conducted to claim a new position.

In our case, positioning work stemmed from the tension between the conceptual
work and (the needed) structural work, for a gap might exist between how the shift
towards becoming more strategic is not, at least not in our case, received by a similar
shift in structural work. It was believed by PFMO-officials their organizations needed
a new position within the municipal hierarchy, in addition to empowered missions and
changes in positions for individual employees, to be able to implement new work
practices, and work strategically. For PFMOs, the new ways of working was in a sense
developed ’bottom-up’ or from within the meso-levels i.e. managerial levels of the
organizations, in a normative process, during which several PFMOs have identified the
same needs.

In the case of Cloutier, Denis, and Langley (2016) the change started with a new
general, organizational structure, followed by a need for conceptual work, as in that
case new working practices came with a top-down governmental reform initiative. In
such cases, the reform might result in positioning work for different work categories
that are impacted by the new reform in different ways, rather than positioning work
that aims to shift the position for the whole organization, as in the case of PFMOs.
When it has come to introducing strategic measures in PFMOs, not formally decided
upon, this was a need that surfaced after the conceptual work and the tensions that this
work created with existing structures.

Cloutier, Denis, and Langley (2016) have argued that relational work underpins the
other forms of work, and that structural work is needed from the outset. In our case,
the conceptual work was present early on, followed by positioning work. Relational
work was present but, we argue, insufficient. For Cloutier, Denis, and Langley (2016),
the repetitiveness and tendency to get stuck in a cyclic form of work was present during
conceptual work. We can thus identify a risk of the same with positioning work if it is
not underpinned by relational work and externally and internally directed efforts are
unaligned.

Conclusion

Our study focused on both the IW conducted while introducing strategic management
measures in public organizations and the relations between different types of IW.
Using ethnographically inspired methods, we studied IW in the moment, and this
paper thus contributes to research seeking to unpack the complex process of strategic
management (Bryson et al. 2003; Gond, Cabantous, and Krikorian 2018; Brorström
and Willems 2021). The paper highlights the intra- and interorganizational conse-
quences of introducing strategic measures by describing how PFMOs reposition
themselves in new roles and positions. It also shows how IW in PFMOs is complicated

18 I. SVENSSON ET AL.

by the organizational setting, which needs extensive coordination across organiza-
tional boundaries and between different work roles (Hopland and Kvamsdal ; Gluch
and Svensson 2018; Svensson and Löwstedt 2021). Such complexity implies a need for
various forms of IW simultaneously that target both internal and external dimensions.

Our study has demonstrated how IW, while introducing strategic measures in
public organizational settings, is both externally directed (i.e. via legitimacy work
and external practice work) and internally directed (i.e. via internal practice work
and identity work; (Gawer and Phillips 2013) as well as entails conceptual, relational,
operational, and structural forms of work (Cloutier, Denis, and Langley 2016). The
introduction and development of strategic management measures in PFMOs have
increased public actors’ confidence and made them question their roles as primarily
being service functions, which has resulted in identity work towards becoming actors
who lead the development of public property management with everyone’s best
interests in mind. In that process, we observed how PFMO managers actively worked
to reposition PFMOs within their municipalities. Extending previous IW frameworks
(Gawer and Phillips 2013; Cloutier, Denis, and Langley 2016), we propose an addi-
tional type of IW for public organizations: positioning work. That type of work
challenges existing practices in being conducted by organizational actors that want
their organizations to assume new positions, both within the formal municipal orga-
nizational structure and in relation to external organizations.

With its overall focus on both managerial and non-managerial roles, our work also
offers insights into the literature on IW by discussing aspects of distributed agency and
how different types of IW relate to each other, which expands Cloutier, Denis, and
Langley (2016) focus on the efforts of managers. Likewise, in this paper, we have
focused on the relations with user organizations and organizations within
a municipality.

Future studies could investigate how PFMO managers’ actions, as a result of their
aims to position PFMOs differently, may influence the wider institutional field – that
is, the broader group of PFMOs, their regulators, partner companies, and the end users
of the premises. In future research, it would also be interesting to study other public
organizations to determine whether they also seek to assume new positions in con-
nection with the introduction of strategic measures. A follow-up question is thus how
that dynamic affects the collaboration between organizations within municipalities. If
being strategic means being above others, then what does it mean if several organiza-
tions want to assume that position?

Disclosure statement

No potential conflict of interest was reported by the author(s).

Funding

The work was supported by the CMB Centre for Management in the Built Environment [126].

ORCID

Ingrid Svensson http://orcid.org/0000-0003-2339-2097
Sara Brorström http://orcid.org/0000-0002-5070-8491

PUBLIC MANAGEMENT REVIEW 19

Pernilla Gluch http://orcid.org/0000-0003-0026-0112

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https://doi.org/10.1080/14719037.2014.957339

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Abstract

Introduction

Theoretical framework based on IW

Externally and internally directed IW

IW and implementing public sector reforms

Research methodology

Data collection

Interview study

Case studies

Data analysis

Results

Internally directed IW

Increasing knowledge about buildings

Introducing strategically oriented work roles

Making sense of new work roles and positions

Externally directed IW

Changing the scope of FM practice and developing a new organizational identity

Introducing new work practices influenced by outsiders

Changes in external relationships

Analysis and discussion

Conclusion

Disclosure statement

Funding

ORCID

References

Administrative Science Quarterly
2022, Vol. 67(4)1012–1048
� The Author(s) 2022
Article reuse guidelines:
sagepub.com/journals-permissions
DOI: 10.1177/00018392221117996
journals.sagepub.com/home/asq

The Two Blades of the
Scissors: Performance
Feedback and Intrinsic
Attributes in Organizational
Risk Taking

Xavier Sobrepere i Profitós,1 Thomas Keil,2

and Pasi Kuusela3

Abstract

We draw on the behavioral theory of the firm and prospect theory to examine
how performance feedback (decision context) and the characteristics of the
alternatives (decision content) that decision makers face jointly determine orga-
nizational risk-taking choices. While the behavioral theory of the firm has identi-
fied performance feedback’s important role in driving organizational risk-taking
decisions, it has not considered the intrinsic attributes of alternatives, specifi-
cally the magnitude and likelihood of their outcomes, which have been the
focus of prospect theory. We argue that these two attributes play a key role in
decision makers’ assessment of alternatives, but because achieving organiza-
tional goals is the prime objective in organizations, performance feedback
drives how decision makers process information regarding these attributes.
Analyzing 23,895 fourth-down decisions from the U.S. National Football
League, we find that decision makers weigh attainment discrepancy and the
magnitude and likelihood of outcomes in their choices, depending on deadline
proximity. Furthermore, the size and valence of attainment discrepancy modify
the weight of the magnitude and likelihood of outcomes in risky choices. Our
arguments and findings suggest extensions to the behavioral theory of the firm
and imply modifications to prospect theory when applied to the organizational
context.

Keywords: risk taking, behavioral theory of the firm, prospect theory,
aspirations, performance feedback

1 UPF Barcelona School of Management, Spain
2 University of Zurich, Switzerland
3 University of Groningen, Netherlands

Corresponding Author:

Xavier Sobrepere i Profitós, UPF Barcelona School of Management, Balmes 132, Barcelona,

Catalonia 08008, Spain. Email: xavier.sobrepere@bsm.upf.edu

us.sagepub.com/en-us/journals-permissions

https://doi.org/10.1177/00018392221117996

journals.sagepub.com/home/asq

How do organizational decision makers make risky choices? Using the meta-
phor of the two blades of scissors, Simon (1947, 1990) suggested that
decisions are shaped by the decision context and how decision makers process
information regarding the decision content. Yet prior research has typically
focused on only one blade of the scissors. Emphasizing the organizational deci-
sion context, research drawing on the behavioral theory of the firm (Cyert and
March, 1963) has focused on performance feedback relative to an organiza-
tional goal (e.g., Bromiley, 1991; Greve, 1998; Lehman and Hahn, 2013) and
has thus not considered the attributes of the alternatives that decision makers
face: the decision content. In contrast, research on prospect theory (Kahneman
and Tversky, 1979; Tversky and Kahneman, 1986, 1992) has focused on how
decision makers process information regarding the decision content, specifi-
cally the magnitude and likelihood of outcomes, which constitute the intrinsic
attributes of an alternative, yet it has not considered how the decision context
may modify information processing in organizations. It is difficult to imagine
that managers would make any important decision without considering both
the potential consequences of the alternatives and the performance relative to
the organizational goal. To progress toward better understanding of organiza-
tional risk taking, we therefore integrate and modify arguments from these two
theoretical perspectives to theorize how performance feedback (decision con-
text) and intrinsic attributes of alternatives (decision content) jointly affect orga-
nizational risk taking.

We argue that in the organizational context, decision makers draw on infor-
mation regarding both intrinsic attributes and performance feedback, but per-
formance feedback drives information processing. From the organizational
perspective, decision makers’ prime objective is to achieve organizational goals
(Cyert and March, 1963). We expect organizational decision makers to use
information that has high diagnostic value (Greve, 2003)—i.e., is informative,
useful, and important—for assessing the potential to achieve the organizational
goal. As decision makers do so, contextual factors may influence decision mak-
ing directly and indirectly, as they modify the diagnostic value of other
information.

For example, consider a team in the National Football League (NFL) facing
the high-risk fourth-down decision, our empirical context. As we explain in
detail below, the fourth down is a team’s last attempt to advance a total of 10
yards, which allows them to retain possession of the ball. The risky choice in
the fourth down is to attempt to win these yards, i.e., to ‘‘go for it.’’ Before
deciding which play to choose, the team will consider the possible outcomes
of each alternative and their likelihoods, the score, and the remaining time in
the game. To provide some intuition, Figure 1 depicts heatmaps of risk taking
in fourth-down decisions as a function of these parameters. The four heatmaps
depict the propensity to go for it on fourth downs, which captures risk-taking
intensity. Each heatmap’s x-axis shows the difference in game score, which
captures the attainment discrepancy; in the y-axis, the yard line position on the
field captures the magnitude of outcomes because the expected points
scored/received when starting a new play are a direct function of the field posi-
tion (see Romer, 2006). Heatmaps in the left column capture scenarios with
low likelihood of losses, and those on the right capture scenarios with high

Sobrepere i Profitós et al. 1013

likelihood of losses. Loss likelihood is captured by the remaining yards to com-
plete the down, as the likelihood of succeeding in the attempt to go for it
decreases as the yards left increase. Finally, the heatmaps in the top row are
for the first half of the game, far from the deadline, and the heatmaps on the
bottom are for the second half, close to the deadline. This figure shows strik-
ingly different risk-taking patterns, and in the following sections, we explain the
theory and empirically examine the decision making that leads to such
differences.

Figure 1. Heatmaps of Risk Taking Based on the Raw Data

1014 Administrative Science Quarterly 67 (2022)

First, we argue that deadline proximity modifies the diagnostic value of the
intrinsic attributes of alternatives and of attainment discrepancies, that is, the
size and valence of the difference between organizational performance and an
aspiration level regarding the organizational goal (Lant, 1992). Deadline proxim-
ity captures the time to performance evaluation and is a dimension of within-
period performance feedback.1 We know from prior research (Lehman et al.,
2011) that decision makers weigh attainment discrepancies more strongly the
closer the deadline is because closing performance gaps or avoiding jeopardiz-
ing performance advantages becomes more important for reaching the organi-
zational goal. In contrast, intrinsic attributes of an alternative, specifically the
magnitudes and likelihoods of outcomes, which capture the extent to which
the alternative is expected to make the decision maker better off (Kahneman
and Tversky, 1979), have more diagnostic value when the deadline is distal, as
any performance improvement is valuable at that time. This is not the case
when the deadline is near. Close to the deadline, decision makers may diverge
from the better-off perspective by pursuing unattractive opportunities or
rejecting attractive ones if the choice allows them to possibly reach the goal.
For instance, at the beginning of the game, a team will likely choose a play that
improves the team’s score; close to the end of a game, the team may pursue a
highly risky play that they would not have considered at the beginning of the
game but may now be the only way to win the game.

Second, we argue that the size and valence of an attainment

discrepancy

also modify the diagnostic value of intrinsic attributes in risky choices. Because
of the primacy of achieving the organizational goal, the larger the attainment
discrepancy, the higher the diagnostic value of the magnitude attribute
becomes. This occurs because with a large attainment discrepancy, achieving
or failing to achieve the goal becomes more dependent on the magnitude of
the outcome. Furthermore, because of the shape of the subjective value func-
tion (Kahneman and Tversky, 1979), decision makers exhibit loss aversion and
are expected to become less sensitive to changes in performance the larger
the positive attainment discrepancy is, which reduces the diagnostic value of
both intrinsic attributes: magnitude and likelihood of outcomes. Combining
these arguments, we posit that (1) when performance is below aspirations, the
effect of the magnitude of outcomes increases with the size of the attainment
discrepancy; (2) when performance is close to the aspiration level, the likeli-
hood of outcomes drives choices, and its effect is stronger above than below
aspirations; and (3) when performance is above aspirations, the effect of the
likelihood of outcomes decreases as the attainment discrepancy increases. In
our NFL example, when the team is losing by many points, the team’s choice

1 Research on performance feedback has taken different approaches to temporal structure of per-

formance feedback. Some studies have focused on performance feedback across performance

periods such that performance in past periods shapes current levels of risk taking (e.g., Palmer and

Wiseman, 1999; Miller and Chen, 2004; Kacperczyk, Beckman, and Moliterno, 2015). Other studies

use forward-looking performance feedback, either by measuring performance expectations relative

to aspirations (e.g., Bromiley, 1991; Wiseman and Bromiley, 1996; Chen, 2008) or by relying on

within-period performance feedback (Lehman et al., 2011; Lehman and Hahn, 2013). In within-

period studies, performance feedback from actions during a performance period affects subsequent

behavior within the same performance period; this feedback signals whether the goal of achieving

a satisfactory performance level at the end of the period (when final performance evaluation takes

place) is at risk. Our study belongs to the within-period performance feedback stream of research.

Sobrepere i Profitós et al. 1015

will focus more on the fact that a play will have the potential to score 6–8
points, whereas close to the aspiration, the likelihood of success will matter
more. When the team is winning by many points, neither factor will play a
strong role.

We test and find support for these predictions by analyzing NFL teams’ risk-
taking decisions. This setting has been used previously to study risk taking
(e.g., Lehman et al., 2011; Lehman and Hahn, 2013; Gonzales, Mishra, and
Camp, 2017; To et al., 2018) given that it provides systematic data, good
measures of key constructs, and a structure of decision making resembling
that of other business contexts.

Our study makes important contributions to both the behavioral theory of
the firm and prospect theory. We extend the behavioral theory of the firm by
incorporating the intrinsic attributes of alternatives into explanations of risk tak-
ing and by explaining how these attributes, jointly with performance feedback,
affect risky choices. Incorporating intrinsic attributes into the theory is impor-
tant given that in real-world decisions, decision makers typically face a choice
among specific alternatives, and a theory of risk-taking decisions that ignores
the attributes of these alternatives would seem incomplete.

Our study also has important implications for the application of prospect
theory to organizational contexts. We argue for skepticism of directly applying
prospect theory arguments alongside performance feedback to explain organi-
zational risk taking. Given that predictions based on these theories are often
similar on the surface, prior research has at times ignored their important
differences (Bromiley, 2010; Bromiley and Rau, 2022). Our results suggest,
however, that because decision makers in organizations try to reach organiza-
tional goals, important modifications to prospect theory arguments are needed
to theorize the effects of intrinsic attributes in the organizational context. In
other words, the organizational context modifies information processing regard-
ing risky choices, and the behavioral theory of the firm provides the framework
to explain how this occurs.

THEORY DEVELOPMENT

In his seminal analysis of decision making in organizations, Simon (1947: 241)
highlighted that a theory of organizational decision making ‘‘must be concerned
with the limits of rationality, and the manner in which organizations affect these
limits for the person making a decision’’ (emphasis added). For our analysis of
organizational risk-taking choices, this implies that our theory must clarify how
decision makers process information regarding the decision content and how
the organizational decision context affects this information processing. We
therefore draw on two theories that scholars have commonly used to theorize
the organizational context and the decision content: the behavioral theory of
the firm and prospect theory.

Risky Choices in the Organizational Context

Formulated by Cyert and March in 1963, the behavioral theory of the firm has
become the central theory explaining risk taking in the organizational context.
In their initial specification, Cyert and March (1963) focused on explaining orga-
nizational search (and, to a lesser extent, change) as an organizational response

1016 Administrative Science Quarterly 67 (2022)

to performance feedback and remained silent on risk taking. Later research in
the 1980s extended these arguments to risk taking (e.g., Singh, 1986; March
and Shapira, 1987; Bromiley, 1991), following the same logic originally devel-
oped for search and change (Greve, 2003).

The central idea is that in the organizational context, decision makers focus
on a specific organizational goal and then regulate behavior by comparing per-
formance feedback with an aspiration level regarding that goal. When perfor-
mance feedback deviates from the aspired level—that is, when there is an
attainment discrepancy (Lant, 1992)—decision makers respond by adjusting
behavior. When an organization performs below aspirations, risk taking should
increase with the attainment discrepancy because to close the aspiration–
performance gap, the organization needs to take risky actions (Bromiley, 1991;
Greve, 1998).2 When an organization is performing above aspirations, two
alternative predictions exist. Some studies argue that, above aspirations,
organizations reduce risk taking with larger attainment discrepancies because
the organizations perceive increasingly less need to take risky actions (Greve,
1998; Arrfelt, Wiseman, and Hult, 2013; Joseph, Klingebiel, and Wilson, 2016;
Smulowitz, Rousseau, and Bromiley, 2020). Other studies argue that, above
aspirations, risk taking could increase because with a larger attainment discrep-
ancy, decision makers are less concerned with falling below aspirations in the
event of losses and therefore relax controls (March and Shapira, 1992; Chen
and Miller, 2007).

Given the focus on performance feedback, empirical studies, with rare
exceptions (March and Shapira, 1987), have not considered how decision
makers process information regarding the intrinsic attributes of the alternatives
an organization faces. This omission is not surprising given that performance
feedback theory was originally not designed to explain individual risky choices.
Prior empirical research has therefore focused mostly on the question of
whether to search, adjust risk levels, or change, thereby emphasizing the acti-
vation and intensity of aggregate responses to performance feedback (Greve,
2018; Posen et al., 2018). Underlying this focus has also been the difficulty of
observing the steps preceding risky choices (Posen et al., 2018) and the
assumption that organizations have too little information about alternatives’
outcomes and their likelihood to consider them (Knudsen and Levinthal, 2007).
This latter assumption may not hold in many organizational contexts. Rather,
managers at least have ‘‘concrete . . . if not necessarily accurate’’ (Cyert and
March, 1963: 99) estimates about the intrinsic attributes of the alternatives
they consider; therefore it would appear at odds with the behavioral realism of
the Carnegie tradition to assume that decision makers make no use of this
information.

The Decision Content of Risky Choices

Prospect theory has focused on consideration of decision content, particularly
how decision makers process information regarding the intrinsic attributes of

2 This logic mostly applies in the relative vicinity of the aspiration level, and some studies suggest

that very large shortfalls may threaten survival and lead to rigidity in behavior rather than risk taking

(e.g., Staw, Sandelands, and Dutton, 1981; March and Shapira, 1992; Audia and Greve, 2021). In

this study, we therefore focus on the vicinity of the relative aspiration level.

Sobrepere i Profitós et al. 1017

risky choices (Kahneman and Tversky, 1979; Tversky and Kahneman, 1992).
The theory was originally developed to explain one-shot decisions regarding
risky choices of individuals seeking to improve their performance by choosing
an option if it makes them better off than alternative choices do (Kahneman
and Tversky, 1979). In other words, decision makers will choose the course of
action with the highest overall subjective value given the decision makers’
estimates of the magnitude and likelihood of outcomes. Thus the higher the
magnitude of gains compared to losses and the higher the likelihood of a posi-
tive outcome, the more prone decision makers are to choose an alternative.

In the process of assessing the subjective value of outcomes, decision
makers’ estimates of magnitude and likelihood of outcomes are thought to be
biased (Kahneman and Tversky, 1979). In estimating the value of outcomes,
decision makers set a reference point and classify outcomes as either gains or
losses depending on that reference point. They consider the value of outcomes
in decreasing returns, but the decreasing returns are more pronounced above
than below aspirations; the value function is more concave above aspirations
than it is convex below aspirations (Kühberger, 1998; DellaVigna, 2009; Ruggeri
et al., 2020). Additionally, when considering the likelihood of outcomes, deci-
sion makers do not use exact likelihoods but, rather, biased and cognitively sim-
plified estimates (Tversky and Kahneman, 1992; Prelec, 1998; Gonzalez and
Wu, 1999). As a consequence of their biased estimates, they exhibit loss aver-
sion and risk aversion in the domain of gains and risk-seeking behavior in the
domain of losses (Kahneman and Tversky, 1979).

Prospect theory has also been frequently applied in the organizational con-
text alongside arguments derived from the behavioral theory of the firm (e.g.,
Miller and Leiblein, 1996; Palmer and Wiseman, 1999; Gomez-Mejia and
Wiseman, 2007; Shimizu, 2007). Research integrating both theories has often
assumed that organizational aspirations provide a natural reference point and
that otherwise, no other important modifications need to be considered. Yet
this practice has been criticized for ignoring the fact that risky choices in the
organizational context may differ in important ways from the assumptions of
prospect theory (e.g., Bromiley, 2010; Bromiley and Rau, 2022). Specifically,
Bromiley and Rau (2022: 125) highlighted that the ‘‘belief that the [prospect]
theory leads to some relatively straightforward hypotheses regarding the
relations between firm or individual performance and risk-taking . . . stems from
an oversimplification or incomplete application of the core ideas in the theory.’’
Building on this critique, we argue first that research integrating arguments
from prospect theory into the organizational context should consider the intrin-
sic attributes of alternatives; second, we argue that while decision makers may
use aspiration levels as a reference point, performance feedback may modify
how they process information regarding the intrinsic attributes. We therefore
focus our theory on how intrinsic attributes and performance feedback interact
to jointly influence risk-taking choices.

Organizational Risk-Taking Choices: Integrating Decision Context and
Decision Content

In building our theory of risk taking, we argue that in the organizational context,
decision makers draw on information regarding both the intrinsic attributes of the
alternatives and performance feedback. As Simon’s (1947, 1990) notion of

1018 Administrative Science Quarterly 67 (2022)

scissors suggests, the organizational context shapes risk-taking decisions (Simon,
1947; Kacperczyk, Beckman, and Moliterno, 2015) and leads to decisions that
deviate in important ways from the better-off logic and more closely resemble
the satisficing logic. This occurs because organizations hold goals, and achieving
an aspiration level regarding these goals is the primary objective of organizational
decision makers (Cyert and March, 1963; Greve, 2003). Decision makers satisfice
by aiming to surpass the minimum aspired performance level regarding the goal,
rather than maximizing performance (Simon, 1955).

To achieve the organizational goal, decision makers often need to make a
sequence of choices (March, 1996, 2010) and relate each choice in that
sequence to the overall goal of surpassing the performance aspiration, rather
than viewing each choice separately from a better-off perspective. As a result,
in some situations decision makers may choose an alternative that, viewed indi-
vidually, they do not expect to make them better off but that could help achieve
the organizational goal. For instance, when an organization is experiencing a
large underperformance, its decision makers may choose an option that offers
low likelihood of large gain and high likelihood of loss because it would allow
them to close the gap with the aspiration level, even if the subjective expected
value is negative; or the same decision makers in an organization that is
overperforming by a narrow margin might refuse an alternative with a clear posi-
tive subjective expected value but a small risk of losses, to ensure that the
potential loss does not shift performance below aspirations. This behavior is
possible because organizations absorb the cost of individual choices, and the
decision maker is primarily evaluated on performance relative to the perfor-
mance aspiration that arises from the cumulative effect of all choices.

Organizational contexts are characterized by the availability of performance
feedback that gives decision makers information regarding

attainment discrepancy

(Cyert and March, 1963; Greve, 2003). Decision makers directly incorporate this
information into their choices. If we view decision makers as mindful in their infor-
mation processing (Levinthal and Rerup, 2006)—that is, if they can focus time,
energy, and effort in a controlled manner on selected information (Ocasio, 2011)—
we can expect them not only to directly incorporate information about intrinsic
attributes and performance feedback but also to be strategic in their information
processing and to use in their decisions information that has diagnostic value for
assessing an alternative’s contribution to achieving the organizational goal.

Given the primacy of organizational goals in the organizational context, we
argue that the diagnostic value of intrinsic attributes depends on the informa-
tion the decision maker has about the potential to reach the organizational goal
and, therefore, that the attributes’ weight in risky choices will be modified by
different dimensions of performance feedback. Next, we offer hypotheses
regarding this interplay of intrinsic attributes and dimensions of performance
feedback in risky choices.

HYPOTHESES

Deadline Proximity and the Diagnostic Value of Intrinsic Attributes and
Attainment Discrepancy

In our first set of predictions, we focus on how the temporal proximity of per-
formance evaluation, also called deadline proximity, shapes the diagnostic value

Sobrepere i Profitós et al. 1019

of each intrinsic attribute and attainment discrepancy (Lehman et al., 2011).
While deadline proximity has sometimes been viewed as distinct from perfor-
mance feedback, we can think of the former as a dimension of within-period
performance feedback. Deadline proximity is important for several reasons.
Organizations typically set their goals and evaluate performance for clearly
defined periods of time, i.e., performance periods (Greve, Rudi, and Walvekar,
2021), with performance evaluation events at the end of those periods. For
instance, organizations may set and measure weekly sales goals, quarterly
earnings goals (Chen, 2008), and yearly employee assessment or profitability
goals (Mezias, Chen, and Murphy, 2002). Performance periods may play an
even larger role in discrete activities such as change task forces, new product
development projects (Sethi and Iqbal, 2008), funding rounds in new ventures,
or sports games (Lehman et al., 2011; Greve, Rudi, and Walvekar, 2021). While
decision makers tend to monitor goal achievement throughout the performance
period (Eisenhardt, 1989; Sutcliffe, 1994; Lehman et al., 2011) and adjust their
behavior during this period (Simon, 1947: 62; Cording, Christmann, and King,
2008; Hohnisch et al., 2016), the final evaluation occurs at the end of the
period, and organizational rewards and punishments are linked to achieving
goals at that point. As a result, deadline proximity should affect the weight of
information regarding both attainment discrepancies and intrinsic attributes in
risky choices.

Specifically, we expect the weight of intrinsic attributes in risk-taking
decisions to decrease with proximity to the deadline and, following Lehman
et al. (2011), we expect the weight of the attainment discrepancy to increase. In
other words, deadline proximity modifies the diagnostic value of the intrinsic
attributes and attainment discrepancy, but in opposite directions. Intrinsic
attributes allow the decision maker to evaluate whether an alternative is making
the organization better off, and early in the performance period, being better off
is the best contribution to reaching the organizational goal. In contrast, early in
the performance period, information on attainment discrepancy can be consid-
ered noisy and therefore offering little information regarding ability to reach the
goal. As the performance evaluation nears, being better off may not be enough
to reach the goal; therefore the diagnostic value of intrinsic attributes is reduced.
In contrast, the closer the deadline comes, the attainment discrepancy becomes
more predictive of the organization’s ability to reach the organizational goal.
When the end of the performance period is very close, performing below the
aspiration level strongly suggests the need to take risks to achieve the goal,
even if a decision may be expected to generate negative outcomes on average,
and performing above the aspiration level strongly suggests avoiding risks even
if a decision is expected to generate positive outcomes on average.

Relatedly, time can be viewed as a resource that decision makers can use to
reach the goal (Svenson and Maule, 1993). The more the organization has of
that resource, the lower the pressure (Busemeyer, 1985) to deviate from the
better-off perspective and to respond to attainment discrepancies. Finally, the
temporal proximity of an event influences how information related to that event
will be processed (Loewenstein and Elster, 1992; Liberman and Trope, 1998;
Liberman, Sagristano, and Trope, 2002). In particular, decision makers ascribe
higher importance to information regarding events that will occur soon than to
information regarding events in the distant future (McElroy and Mascari, 2007;
Peetz, Wilson, and Strahan, 2009; Nadkarni, Pan, and Chen, 2019); therefore

1020 Administrative Science Quarterly 67 (2022)

the closer the time to the performance evaluation, attainment discrepancies
have increasing weight in choices, which may justify deviating from the better-
off assessment. These observations suggest the following hypotheses:

Hypothesis 0 (H0): The farther away the performance evaluation is, the weaker the
effect of attainment discrepancy on risk taking.

Hypothesis 1 (H1): The farther away the performance evaluation is, the stronger the
effect of the magnitude of potential losses/gains on risk taking.

Hypothesis 2 (H2): The farther away the performance evaluation is, the stronger the
effect of the likelihood of adverse/positive outcomes on risk taking.

Attainment Discrepancy and the Diagnostic Value of Intrinsic Attributes

In our second set of predictions, we argue that in the organizational context,
the size and valence of the attainment discrepancy also influence the diagnostic
value of the intrinsic attributes. According to performance feedback theory, the
aspiration level marks the threshold between success and failure (Simon, 1955)
and acts as a master switch for behavioral changes (Greve, 2003): below
aspirations, decision makers exhibit risk-seeking behavior to restore perfor-
mance; above aspirations, they are mainly concerned with avoiding losses to
secure performance. In prospect theory, the reference point marks the thresh-
old between losses and gains, which also triggers similar risk-seeking and loss-
avoiding behaviors (Kahneman and Tversky, 1979; Tversky and Kahneman,
1992; Barberis, 2013). Based on these similarities, prior research integrating
the theories (e.g., Audia and Greve, 2006) has suggested that in the organiza-
tional context, the aspiration level regarding the organizational goal may be
viewed as a natural reference point for decision makers. But previous research
has not considered how intrinsic attributes may be processed differently as a
function of attainment discrepancy in the organizational context.

Negative attainment discrepancy. From an organizational perspective,
when performance is below aspirations decision makers focus on achieving
gains to amend the shortfall, and the more so the larger the attainment discrep-
ancy. Thus the size of the attainment discrepancy should modify the diagnostic
value of the magnitude of outcomes because with increasing attainment
discrepancies, restoring performance above aspirations can be achieved only
through increasingly larger performance improvements. In comparison, close
to the aspiration level, almost any improvement will suffice to restore perfor-
mance above aspirations. Performance improvements closing the performance
gap are highly valued, but further performance improvements beyond closing
the gap are considerably less relevant for organizational decision makers since
they satisfice (Simon, 1947, 1955). For instance, when the organization is
underperforming by two units, improvements of three versus six units are val-
ued similarly, given that both are sufficient to restore performance above the
aspiration level; but these same improvements of three and six units are valued
differently when the organization underperforms by four or even ten units
because their contributions to amending the shortfall are different. Thus the
larger the negative attainment discrepancy is, the higher the diagnostic value of
the magnitude of the outcome attribute and, therefore, the stronger its impact

Sobrepere i Profitós et al. 1021

on risky choices. An additional argument relates to the smart use of resources.
Generally, pursuing risky alternatives requires the use of resources. Thus with
larger attainment discrepancies, only alternatives with large potential gains are
worth considering to avoid wasting resources, such as time (Greve, Rudi, and
Walvekar, 2021). These observations suggest the following hypothesis:

Hypothesis 3 (H3): For performance below the aspiration level, the larger the attainment
discrepancy is, the stronger the effect of the magnitude of outcomes on risk taking.

Performance at the aspiration level. Based on the argument above, in the
vicinity of the aspiration level, the likelihood of outcomes will receive weight in
risk-taking choices, whereas the magnitude of outcomes will not. Sufficiently
close to the aspiration level, even small losses (gains) can shift the perfor-
mance from success (failure) to failure (success), reducing the diagnostic value
of the magnitude attribute, whereas the likelihood attribute maintains its impor-
tance for assessing the degree to which a risky choice contributes to achieving
the organizational goal. Because below aspirations decision makers focus on
gains whereas above aspirations they focus on losses, and because decision
makers respond more strongly to losses than to gains (Kahneman and Tversky,
1979), it follows that the effect of the likelihood of outcomes is stronger when
performance is slightly above the aspiration level (and decision makers focus
on the likelihood of losses) than when it is slightly below (and decision makers
focus on the likelihood of gains):

Hypothesis 4 (H4): Close to the aspiration level, the effect of the likelihood of
outcomes is stronger when performance is above rather than below aspirations.

Positive attainment discrepancy. As argued, when organizations are
slightly overperforming, decision makers focus on avoiding losses and turn to
the likelihood of losses as the key diagnostic attribute. Only alternatives with
very small likelihood of potential losses will be considered, while alternatives
with substantial likelihood of potential losses will be dismissed. However, with
a larger positive attainment discrepancy, some losses are affordable, and thus
the effect of the likelihoods of outcomes should weaken.

Above the reference point, decision makers exhibit loss aversion (Kahneman
and Tversky, 1979; Tversky and Kahneman, 1992; Barberis, 2013) but less so
the further performance is above the reference point (Bromiley, 2009). This
behavior is based on the strongly concave value function in the domain of
gains: performance improvements above the reference point are perceived as
less valuable the further away performance is from the reference point
(Kahneman and Tversky, 1979; Tversky and Kahneman, 1992). As a conse-
quence, in the organizational context, the strong effect of the likelihood of
outcomes when performance is just above the aspiration level should weaken
as performance increases further.

Similarly, organizational research has suggested that when organizations per-
form above aspirations, decision makers focus on avoiding losses that could
jeopardize their over-performance (Wiseman and Bromiley, 1996; Miller and
Chen, 2004). However, larger attainment discrepancies above aspirations cre-
ate a performance buffer that ensures achievement of the goal even in the
case of losses. The larger the performance buffer is, the more managers

1022 Administrative Science Quarterly 67 (2022)

become confident in their ability to maintain performance above aspirations
(Xu, Zhou, and Du, 2019) and thus relax controls regarding risk taking (March
and Shapira, 1992; Chen and Miller, 2007). As a consequence, the strict dis-
criminatory behavior based on the likelihoods of outcomes attribute (that we
predict just above aspirations) should weaken as the positive attainment dis-
crepancy increases:

Hypothesis 5 (H5): For performance above the aspiration level, the larger the positive
attainment discrepancy is, the weaker the effect of the likelihood on risk taking.

We do not make predictions for potential moderation of the magnitude attri-
bute and positive attainment discrepancies or of the likelihood attribute and nega-
tive attainment discrepancies. For the magnitude attribute, two conflicting
mechanisms are at play above aspirations. On the one hand, the decreasing sen-
sitivity to changes in performance above aspirations may also weaken the effect
of the magnitude of outcomes. On the other hand, also above aspirations,
magnitudes may hold higher diagnostic value with a larger attainment discrep-
ancy because the potential to jeopardize the performance surplus becomes more
dependent on the magnitude attribute. For the likelihood attribute, the prediction
for the decreasing effect above aspirations is based predominantly on the flatten-
ing of the value function above aspirations. Yet below aspirations the flattening of
the value curve is much weaker than it is above aspirations (Kühberger, 1998;
DellaVigna, 2009; Ruggeri et al., 2020). As we focus on attainment discrepancy in
the relative vicinity of the aspiration level, we assume that the flattening of the
value curve below aspirations does not play a significant role, and thus we do not
expect a moderation effect. While we make no predictions regarding these
potential additional interaction effects, we explore them in our models for robust-
ness purposes. Figure 2 provides a summary of our hypotheses.

DATA AND METHODS

Research Setting

We test our hypotheses by analyzing fourth-down decisions from 2,304 regular
season NFL games during the 2009–2016 seasons. In an NFL game, teams
have up to four attempts, called ‘‘downs,’’ to advance a total of at least 10
yards on the field to receive a new first down and continue their attack; other-
wise the right to attack shifts to the opponent. Teams face a risky choice dur-
ing fourth downs, which is their last attempt to achieve these yards. On the
fourth down, the conservative choice is to punt the ball so that the opposing
team begins its attack from as far away as possible, while the risky choice is to
go for it, that is, to attempt to win the necessary yards for a new first down. If
the team goes for it and succeeds, it continues its attack. If the team fails, the
opponent begins its attack from where the play ended. (For a more detailed
description of the setting, see the appendix in Romer, 2006.)

The NFL offers an ideal setting for testing our predictions given the con-
trolled nature of the game, a common theme in studies using sports data (Day,
Gordon, and Fink, 2012; Moliterno et al., 2014; Fonti and Maoret, 2016), in
which organizations regularly face risky choices. The decision to go for it
involves multiple individuals with different responsibilities and positions in the
hierarchy (head coach as the final decision maker, offensive coordinator,

Sobrepere i Profitós et al. 1023

quarterback, and the rest of the players). This hierarchical structure is similar
to decision making in many top management teams discussing strategic
decisions: the CEO may hold final decision-making power, the CFO may have
a particularly strong role in advising on financial aspects of a decision, and
multiple executives participate in the discussion.

The NFL setting also allows external observers to capture relevant proxies
for all variables of interest in the study. In this setting, key data regarding every
play are documented in detail by teams, fans, and pundits. Outside the sports

Figure 2. Hypothesized Effects of the Influence of Intrinsic Attributes on Risk Taking

performance
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Likelihoods of Outcomes

1024 Administrative Science Quarterly 67 (2022)

setting, such detailed proxies are often available only to the decision maker,
making it difficult for researchers to create variables that resemble the decision
makers’ information. In the NFL setting, the organizational goal is to win the
game, the aspiration level of each team is to score more than the opponent,
and performance feedback is readily available in the form of the score (Lehman
and Hahn, 2013). Furthermore, games last 60 minutes; thus deadline proximity
is clearly defined, and decision alternatives are linked with relevant information
on the magnitudes (yard lines) and likelihoods (yards left) of outcomes.

Sample

The initial sample size consisted of 30,526 fourth-down decisions from the
2,304 games played in the 2009–2016 regular NFL seasons. We exclude 225
fourth downs played in overtime from the sample, as very different rules apply
to this situation (Lehman et al., 2011). We also exclude those fourth downs in
which attainment discrepancy was very large (bottom/top 5 percent) because
prior research has suggested that extremely low and high levels of attainment
discrepancy may switch decision makers’ attention from the aspiration level to
survival and slack focus, respectively (March and Shapira, 1987; Lehman et al.,
2011; Ref and Shapira, 2017). Results are consistent when attention to survival
and slack are considered (see Online Appendix Part 5). The final sample
includes 23,895 fourth-down decisions.

Variables

Dependent variable. The dependent variable is Risk taking, which is a
dummy variable taking a value of 1 when the team chooses to go for it on the
fourth down and 0 otherwise. As in previous studies (Lehman et al., 2011;
Lehman and Hahn, 2013; To et al., 2018), we treat not going for it equally,
regardless of whether the team chooses to punt the ball or to attempt a field
goal conversion. We do so because these alternatives to going for it depend
predominantly on the position on the field (Romer, 2006; Lehman et al., 2011).3

Independent variables. We measure Attainment discrepancy as the differ-
ence in points between the focal team and the opponent.4 Following previous

3 To control for the possibility that the focal team may attempt a field goal instead of simply punting

the ball, we add a control variable (see the Control variable section). We also test an alternative

(multinomial logit) model that allows for the possibility of three alternative decisions (go for it,

punting the ball, and field-goal alternative). We report the results of this alternative specification in

the Online Appendix Part 3. The results are qualitatively similar to the main results.
4 While it is reasonable in sports settings to assume that the goal of a team is always to win the

game, some teams may have additional socially defined aspirations such as winning with a margin

or avoiding losing by many points or losing to specific teams. Such socially defined aspirations

either could affect decisions separately, or the decision maker could form an integrated aspiration

that combines socially defined aspirations with the team’s aspiration of winning the game.

However, research on the behavioral theory of the firm is not very clear on how social aspirations

and historical aspirations are to be integrated (Bromiley and Harris, 2014), and how to define social

aspirations is both theoretically and empirically contested (Moliterno et al., 2014; Kuusela, Keil, and

Maula, 2017). We therefore focus on the simple aspiration of winning the game and add relative

team quality and rivalry as control variables (see the Control variable section) to capture instances

that may lead to differing social aspirations.

Sobrepere i Profitós et al. 1025

conventions (e.g., Greve, 1998; Lehman et al., 2011), we create a spline func-
tion capturing Negative attainment discrepancy and Positive attainment dis-
crepancy. The former is captured by the difference in points of the focal and
the opposing teams when the points of the opposing team exceed those of
the focal team and 0 otherwise; symmetrically, the latter is captured by the
same difference in points when the points of the focal team exceed those of
the opposing team and 0 otherwise. Because we use the aspiration level of
performance as a natural reference point (Audia and Greve, 2006) and as a
‘‘master switch’’ (Greve, 2003: 76) that changes decision makers’ behavior,
our model allows for discontinuity at the aspired level of performance by
including an additional variable, Valence indicator, which takes a value of 1
when performance is above the aspiration level and 0 otherwise (Lehman
and Hahn, 2013).

To capture the intrinsic attributes of alternatives, we create separate
measures for the magnitude of outcomes and their likelihood.5 We do not
expect decision makers to systematically calculate exact magnitudes or
likelihoods of outcomes during the game but, rather, to use easily available
proxies about which they can form beliefs based on experience.

To capture the magnitude of outcomes, we use the variable Yard line,
which reflects the position of the attacking team on the field. When the
team is in a position close to the opponent’s end zone, the magnitude of
potential gains is high because scoring becomes easier on successive plays.
At the same time, the magnitude of potential losses is low because in the
case of failing to achieve a new first down, the opponent would start the
next attack far away from the focal team’s end zone, making it difficult to
score. As a result, although the team receives the same number of points
when scoring, the expected value of the play differs greatly with the yard line
because several additional plays may be needed to score (Romer, 2006). We
center the Yard line at the middle of the field, such that value 0 represents
being in the middle and values –49 and 49 represent being one yard from
one’s own end zone and one yard from the opponent’s end zone,
respectively.

We capture the likelihood of outcomes with Yards to go for first down, that
is, the number of yards needed to complete the 10-yard advance necessary for
a first down. When teams attempt to go for it on a fourth down, the fewer the
yards left for a first down, the more likely they are to succeed in their attempt.
We measure Yards to go for first down on a logarithmic scale because the
increase in difficulty is concave rather than linear.

Moderator variables. To test our hypotheses, we rely on several modera-
tor variables. For Hypotheses 0, 1, and 2, we focus on the interaction between
deadline proximity and the independent variables just described. Specifically,
we create a set of dummy variables for quarters 2, 3, and 4 (quarter 1 serves
as a baseline), denoted Quarter 2, Quarter 3, and Quarter 4. We use quarter
dummies instead of continuous time to facilitate the interpretation of the

5 This operationalization assumes that decision makers view choices as drawn from a Bernoulli dis-

tribution and is aligned with empirical research in prospect theory (Kahneman and Tversky, 1979)

and recent theoretical work on the behavioral theory of the firm (Posen and Levinthal, 2012;

Stieglitz, Knudsen, and Becker, 2016).

1026 Administrative Science Quarterly 67 (2022)

results.6 The dummy variables take the value of 1 if the play is in the respective
quarter and 0 otherwise. We then create interaction terms of the dummy
variables with our independent variables: Negative attainment discrepancy,
Positive attainment discrepancy, Valence indicator, Yard line, and Yards to go
for first down.

To test the changing effect of magnitudes and likelihoods at different sizes
and valences of attainment discrepancy as predicted in Hypotheses 3, 4, and 5,
we create interaction variables of the attainment discrepancy variables
(Negative attainment discrepancy, Positive attainment discrepancy, and
Valence indicator) with the magnitude of gains and losses (Yard line) and their
likelihood (Yards to go for first down).

Control variables. We introduce several control variables into our models.
First, to account for the possibility that the relative benefit of risk taking
depends on other options available, we control for the Field goal alternative to
capture instances when a field goal attempt could be an alternative to punting
the ball, depending on the yard line. We build this variable by following Romer
(2006). We first estimate the average points gained when not going for it at
each Yard line and then average the value at each Yard line with its five nearest
neighbors, to reduce noise in the event of few observations at a specific Yard
line value. The return of not going for it is approximately 0 when Yard line is
below 10; it then steeply increases to 3 as a field goal conversion becomes
possible and stabilizes close to 3 when Yard line is above 35. We also include
as additional controls the moderation between the Field goal alternative and
the moderation variables discussed above.

Second, we control for two distinct periods of the game when the rules are
slightly different. We include the variables Last minutes quarter 2 and Last
minutes quarter 4, which take the value of 1 if the play is taking place during
the last two minutes of quarters 2 and 4, respectively, and 0 otherwise.

Third, we control for several factors potentially influencing the team’s pro-
pensity to go for it. Home-field advantage is a dummy variable taking the value
of 1 when the team plays at home and 0 when the team is the visitor (Lehman
et al., 2011; To et al., 2018). We also control for the Difference in team quality,
operationalized as the difference in the percentage of wins between the two
teams for that season. We further include the focal team’s Within-game
momentum (positive and negative) and Across-game momentum (positive and
negative) to control for the existence of performance momentum. Following
Lehman and Hahn (2013), Positive (negative) within-game momentum starts
after two consecutive instances of scoring (being scored against) in the game,
and Positive (negative) across-game momentum begins after two consecutively
won (lost) games. The four momentum variables are initially set to 0 and then
take the number of cumulative positive (negative) points within the game for

6 In Hypotheses 0, 1, and 2, we argue for a moderating effect of temporal proximity to performance

evaluation, but we do not specify whether the change in the effect of the intrinsic attributes with

time is linear; thus we relax the linear moderation assumption by using categor

ical variables.

Splitting the sample into quarters helps us to discuss the effects of our variables of interest in four

meaningful parts of the performance period. We also discuss the results when we operationalize

temporal proximity to performance evaluation continuously in a set of robustness analyses. Our

results remain qualitatively similar.

Sobrepere i Profitós et al. 1027

positive (negative) Within-game momentum and the cumulative number of
won (lost) games for positive (negative) Across-game momentum once
momentum has started. Once the performance momentum is broken, the vari-
able is set back to zero. Finally, to account for previous success records on the
decision to go for it, we create the variable Memory two last attempts, which
captures the percentage of success in the last two attempts of going for it
(with the baseline, set at the beginning of the game, being 1).

Fourth, we control for two factors that may affect the team’s motivation to
win the game and therefore risk-taking behavior. First, we create a Rivalry con-
trol variable based on historical rivalry between the two teams at play identified
by sports experts (To et al., 2018). We also control for Attainment discrepancy
for playoff classification, which captures the across-period attainment discrep-
ancy with the social aspiration of qualifying for the playoffs at the end of the
season. It is measured as the difference in wins compared with the closest
team currently qualifying for playoffs, and it takes the value of 0 if the team
qualifies.

Fifth, we control for the characteristics of the most relevant decision makers
in the decision-making process. We account for the Quarterback’s quality using
his passing rating, as established by the NFL, because the quality of the quar-
terback may affect the decision to go for it. We also control for the Coach’s
tenure on the team because it partly captures his power and knowledge of the
team, as well as for the Quarterback’s tenure on the team, following the same
logic. Finally, we also include two sets of dummy variables controlling for the
week of the game and the opposing team.7

Analytical Procedure

Because the dependent variable is dichotomous, we use a conditional fixed-
effects logit model with team and season fixed effects to account for time-
invariant unobserved heterogeneity. We test moderating hypotheses and sup-
port the interpretation with a graphic presentation of marginal effects (Hoetker,
2007; Greene, 2010; Mize, 2019). We show the average marginal effects,
expressed as semielasticities (dy/dx x 1/y), of the two variables measuring
intrinsic attributes—Yard line and Yards to go for first down—as a function of
attainment discrepancy.8 These marginal effects reflect the impact of the unit
change in the intrinsic attribute on the proportional change in risk taking.9 To
examine the interactions, we use contrasts (difference) in average marginal

7 In a set of separate robustness analyses that we report in the Online Appendix, we also control

for the total number of points held by the offensive team, the number of players injured during the

match, playoff eligibility, intradivision games, and years of overlap between the quarterback and

head coach. None of these additional controls had a meaningful impact on our results, and all were

therefore dropped from the main analysis presented here to facilitate interpretation.
8 Even though the models in Table 2 are based on a conditional fixed-effects logit model (Stata

xtlogit, fe), the marginal effects graphs are based on the corresponding logit model (Stata logit) with

cluster robust standard errors, where the fixed effects are inserted as a set of dummy variables.

This is done to circumvent the problem that the conditional fixed-effects logit model does not esti-

mate the intercept, which is needed to calculate the marginal effects properly (Wooldridge, 2010).
9 In calculating the marginal effects, we keep all continuous variables at their mean and all categori-

cal variables at their most common value in the data. As marginal effects are not constant in nonlin-

ear models but depend on values of explanatory variables, we test the validity of our results at

different levels of our explanatory variables. This is reported in the Online Appendix Part 1.

1028 Administrative Science Quarterly 67 (2022)

effects between the base reference level, the average marginal effect when
attainment discrepancy is zero (the points labeled R in Figures 4 and 5, intro-
duced below), and the attainment discrepancy at the third quintile (the points
labeled M in Figures 4 and 5). To further understand interaction effects, we also
test regression coefficients and the significance of their difference, using the
Wald test, and display the significance levels of the interactions (Greene,
2010), which leads to the same interpretation. We report these analyses in
Online Appendix Part 1.

RESULTS

Table 1 summarizes the descriptive statistics and correlations. Table 2 reports
the results of the logit models using odds ratios. Model 1 in Table 2 contains
the control and independent variables, without their interactions, and

Model 2

adds the interaction terms to test our hypotheses. To facilitate comparison, the
results for the interaction of the independent variable with deadline proximity
(measured with Quarter 2, Quarter 3, and Quarter 4 dummies) are presented in
four columns, although they were included simultaneously in Model 2. The first
column shows the results for baseline quarter 1, and the other three columns
indicate the results for quarters 2, 3, and 4, displaying the interaction term
between the respective variable (row) and the quarter in question (column).
The effects of the variables in Model 2 that are not interacted with deadline
proximity are presented in a single mid-centered column below these four
columns. Both models in Table 2 include the dummy variables for weeks and
opposing teams, although to conserve space we do not report these here.

To support the interpretation of our moderating hypotheses, we first present
three figures. Figure 3 presents the average marginal effects of attainment dis-
crepancy in two time periods: quarter 1, when the deadline is far, and quarter
4, when the deadline is near. Figures 4 and 5 present the average marginal
effects of magnitude (Yard line) and likelihood (Yards to go for first down) of
outcomes, respectively, as a function of attainment discrepancies at the same
time points. The shaded area shows 95 percent confidence intervals, and the
labels above the x-axes show the percentile distribution of the data. Figures 4
and 5 follow the conceptual top and bottom of Figure 2, respectively, and the
narrow-dashed arrows illustrate the effects expected according to the hypothe-
ses. However, because the values on the y-axis in Figure 5 are always nega-
tive, the size of the effect increases downward, and the dashed arrows are
therefore horizontally mirrored compared to the bottom image of Figure 2. The
marginal effect in Figure 5 is negative because of our measure of likelihood of
outcome; an increase in Yards to go for first down corresponds to a decrease
in the likelihood of gains.

Baseline Effects

Model 1 in Table 2 suggests that direct baseline effects for our independent
variables are in line with our expectations and prior research. A higher potential
magnitude of gains compared to potential losses (Yard line) increases risk tak-
ing (p < 0.001), whereas a higher likelihood of losses (Yards left) decreases risk taking (p < 0.001). Furthermore, in line with prior research suggesting that performance shortfalls trigger risk taking, our results show a negative relation

Sobrepere i Profitós et al. 1029

between Attainment discrepancy and Risk taking for Negative attainment dis-
crepancy (p < 0.001). In contrast, we do not find a statistically significant rela- tionship between Positive attainment discrepancy and Risk taking (p = 0.158), which also aligns with previous mixed findings for above-aspiration effects

Table 1. Descriptive Statistics and Correlations for Dependent, Independent, and Control

Variables*

Variable Mean S.D. Min Max 1 2 3 4 5 6 7 8 9

1 Risk taking 0.108 0.311 0 1

2 Yards to go for

first down (log)

1.726 0.871 0 3.871 –0.2965

3 Yard line –1.021 25.206 –49 49 0.1946 –0.2214

4 Negative attainment

discrepancy

–3.491 4.956 –19 0 –0.2042 –0.0292 0.0169

5 Positive attainment

discrepancy

2.385 4.037 0 16 –0.0891 –0.0169 0.0334 0.4196

6 Valence indicator 0.340 0.474 0 1 –0.1107 –0.0157 0.0312 0.5096 0.8234

7 Field goal alternative 0.723 1.185 –0.404 3 0.147 –0.1629 0.881 0.0023 0.0257 0.0212

8 Last minutes quarter 2 0.070 0.255 0 1 –0.0206 –0.0005 0.0643 –0.0368 0.0208 0.0272 0.0634

9 Last minutes quarter 4 0.051 0.221 0 1 0.2822 –0.0112 0.07 –0.0131 0.0196 0.0164 0.0577 –0.0634

10 Home-field advantage 0.491 0.500 0 1 0.0049 –0.0062 0.026 0.0884 0.0867 0.0859 0.0236 –0.0043 0.0103

11 Difference in

team quality

–0.012 0.377 –1 1 –0.0166 –0.0047 0.0278 0.1145 0.1114 0.1106 0.0213 0.0047 0.0001

12 Within-game momentum (> 0) 0.691 2.319 0 24 –0.0178 –0.0176 0.0291 0.1705 0.4268 0.3125 0.0266 0.0106 0.0342

13 Within-game momentum (< 0) –1.312 3.211 –28 0 –0.085 –0.0197 0.0222 0.4965 0.1883 0.2064 0.0097 –0.0326 –0.0393

14 Across-game momentum (> 0) 0.373 0.965 0 9 –0.0064 –0.0063 0.0018 0.0229 0.0302 0.0276 0.0046 –0.0067 0.006

15 Across-game momentum (< 0) 0.434 1.078 0 10 0.0128 0.0077 –0.0138 –0.0585 –0.0429 –0.0455 –0.0098 0.0009 –0.0117

16 Memory two last attempts 0.919 0.265 0 1 –0.0712 0.0111 –0.0149 0.1013 –0.0027 –0.0018 –0.0136 0.0037 –0.1013

17 At. discr. for playoff (

18 Rivalry 0.061 0.240 0 1 0.0022 0.0044 0.0074 –0.004 0.0026 0.0006 0.0066 0.0134 0.0031

19 Quarterback’s quality 85.285 13.357 5.9 124.8 –0.0102 –0.0151 0.0539 0.1377 0.1413 0.1322 0.0518 0.0081 0.004

20 Coach’s tenure on the team 3.840 3.831 0 16 0.0052 –0.0063 0.0133 0.0499 0.0499 0.0376 0.0141 –0.0069 0.0057

21 Quarterback’s

tenure

on the team

3.283 3.555 0 16 0.0032 –0.0104 0.0302 0.0669 0.0802 0.0669 0.0284 0.0008 0.0133

22 Quarter 2 0.291 0.454 0 1 –0.0713 0.0062 0.035 –0.0375 0.0169 0.0351 0.0342 0.427 –0.1486

23 Quarter 3 0.207 0.406 0 1 –0.0706 0.0172 –0.0412 –0.0829 0.0817 0.083 –0.0384 –0.1399 –0.1176

24 Quarter 4 0.252 0.434 0 1 0.2325 –0.0067 0.0638 –0.071 0.124 0.1161 0.0587 –0.1586 0.4001

Variable 10 11 12 13 14 15 16 17 18 19 20 21 22 23

11 Difference in

team quality

–0.0866

12 Within-game

momentum (> 0)

0.0211 0.0461

13 Within-game

momentum (< 0)

0.0261 0.0551 0.1213

14 Across-game

momentum (> 0)

–0.0282 0.2788 0.0055 –0.0035

15 Across-game

momentum (< 0)

0.0476 –0.2857 –0.0146 –0.0336 –0.1684

16 Memory two

last attempts

–0.0123 –0.0048 –0.0018 0.06 0.0107 0.0077

17 At. discr. for

playoff (

0.0219 –0.4258 –0.0367 –0.0486 –0.2359 0.496 –0.0047

18 Rivalry 0.0062 –0.0041 –0.0127 –0.0003 0.0442 0.0028 0.0114 0.0051

19 Quarterback’s quality –0.0108 0.2698 0.041 0.0666 0.2241 –0.2517 0.0221 –0.3742 0.0241

20 Coach’s tenure

on the team

0.0084 0.0809 0.0195 0.0188 0.0686 –0.079 –0.0009 –0.1426 0.0083 0.1904

21 Quarterback’s tenure

on the team

–0.0105 0.1229 0.0216 0.0374 0.1026 –0.1184 0.0088 –0.2222 0.0983 0.3962 0.4345

22 Quarter 2 –0.0073 –0.0013 –0.0065 –0.0129 –0.0036 –0.0003 0.0653 0.0007 0.0076 0.0064 0.0064 0.0051

23 Quarter 3 0.0005 0.005 0.0591 –0.0806 0.0011 0.0056 –0.0563 0.008 –0.0072 –0.0169 0.002 –0.0042 –0.3277

24 Quarter 4 0.0099 0.0008 0.1048 –0.1003 –0.0036 –0.0066 –0.1674 –0.0092 –0.0016 0.0044 –0.0092 0.0005 –0.3714 –0.2938

*n = 23,895; correlations above .012 are significant at p < .05; correlations above .016 are significant at p < .01.

1030 Administrative Science Quarterly 67 (2022)

Table 2. Logistic Regression Analysis for the Likelihood of a Fourth-Down Attempt

Model 2

Model 1 Baseline ×Quarter 2 ×Quarter 3 ×Quarter 4

Negative attainment discrepancy 0.868••• 0.971 0.976 0.915•• 0.811•••

(0.006) (0.024) (0.026) (0.026) (0.022)

Positive attainment discrepancy 0.982 0.978 0.957 0.991 0.970

(0.014) (0.066) (0.067) (0.071)

(0.067)

Valence indicator 0.582••• 1.028 1.277 1.271 0.484

(0.073) (0.486) (0.639) (0.692) (0.244)

Yards to go for first down (log) 0.273••• 0.127••• 1.781••• 1.467•• 3.4•••

(0.009) (0.014) (0.234) (0.22) (0.414)

Yard line 1.054••• 1.069••• 1.004 1.011 0.954•••

(0.003) (0.009) (0.011) (0.012)

(0.009)

Field goal alternative 0.513••• 0.536••• 0.668• 0.645• 1.144

(0.025) (0.08) (0.125) (0.137) (0.197)

Yards to go for first down (log) ×
Negative attainment discrepancy

1.009

(0.008)

Yards to go for first down (log) ×
Positive attainment discrepancy

1.066•••

(0.019)

Yards to go for first down (log) ×
Valence

indicator

0.424•••

(0.073)

Yard line × Negative attainment

discrepancy

0.998•••

(0.001)

Yard line × Positive attainment

discrepancy

0.999

(0.002)

Yard line × Valence indicator 1.008

(0.014)

Field goal alternative × Negative

attainment discrepancy

1.028•

(0.012)

Field goal alternative × Positive

attainment discrepancy

1.007

(0.027)

Field goal alternative × Valence

indicator

1.231

(0.306)

Last minutes quarter 2 1.089

(0.132)

1.096

(0.138)

Last minutes quarter 4 8.81•••

(0.794)

11.347•••

(1.147)

Home-field advantage 1.185••

(0.063)

1.178••

(0.066)

Difference in team quality 1.066

(0.103)

0.996

(0.101)

Within-game momentum (>0) 0.995

(0.013)

0.998

(0.014)

Within-game momentum (<0) 1.028••

(0.008)

1.01

(0.008)

Across-game momentum (> 0) 0.975

(0.032)

0.965

(0.033)

Across-game momentum (< 0) 1.027

(0.008)

1.026

(0.033)

Memory two last attempts 1.222•

(0.111)

1.296••

(0.125)

Attainment discrepancy for playoff

classification (

1.021

(0.03)

1.002

(0.032)

Rivalry 1.128

(0.139)

1.169

(0.151)

Quarterback’s quality 1.006

(0.004)

1.003

(0.005)

(continued)

Sobrepere i Profitós et al. 1031

(Lant, Milliken, and Batra, 1992; Miller and Chen, 2004; Lehman and Hahn,
2013; Posen et al., 2018).

Results for Deadline Proximity, Performance Feedback, and Intrinsic
Attributes

Hypothesis 0 predicts that the effect of attainment discrepancy on risk taking
strengthens as the deadline approaches. Figure 3 strongly supports this for
below-aspiration performance, as the marginal effect of attainment discrepancy
is significantly larger during Q4 (deadline near) than Q1 (deadline far), and this
difference is statistically significant (p < 0.05) over the whole range of data below aspirations, except the two data points where the 95 percent confidence intervals overlap (approximately 2 percent of the data). The marginal effect of Negative attainment discrepancy decreases as attainment discrepancy increases in quarter 4 because Risk taking is upper-censored such that it can- not be higher than 1. In contrast, above aspirations, there is no moderating effect, as Figure 3 shows, given that the null baseline effect of Positive attain- ment discrepancy remains for all quarters.

Hypotheses 1 and 2 predict that the effects of the magnitude of outcomes
(captured by Yard line) and their likelihood (captured by Yards to go for first
down) weaken as the deadline approaches. Figures 4 and 5 strongly support
both hypotheses, showing that the marginal effects are clearly weaker during
quarter 4 (deadline near) compared to quarter 1 (deadline far) on all levels of
attainment discrepancy. The difference in the average marginal effects
between Q1 and Q4 is also statistically significant (p < 0.001) at all data points where the 95 percent confidence intervals overlap in Figures 4 and 5.

Table 2. (continued)

Model 2

Model 1 Baseline ×Quarter 2 ×Quarter 3 ×Quarter 4

Coach’s tenure on the team 1.436+

(0.266)

1.481•

(0.295)

Quarterback’s tenure on the team 1.03

(0.024)

1.033

(0.024)

Quarter 2 0.969

(0.088)

1.153

(0.228)

Quarter 3 0.863

(0.085)

0.847

(0.199)

Quarter 4 3.472•••

(0.303)

0.818

(0.168)

Week control Included Included

Opposing team control Included Included

n 23,895 23,895

LR w2 5,526.51••• 6,617.9•••

+ p < .10; • p < .05; •• p < .01; ••• p < .001 (two-tailed tests).

1032 Administrative Science Quarterly 67 (2022)

Results for Attainment Discrepancy and Intrinsic Attributes

Hypothesis 3 predicts that the larger the size of the attainment discrepancy
below aspirations, the stronger the effect of the magnitude of outcomes.
Figure 4 shows that H3 is clearly supported in quarter 1 but not in quarter 4 for
most levels of attainment discrepancy. The 0.020 difference in the marginal
effect between MQ1b and RQ1b is statistically significant (χ2 = 13.98, p <

0.001), whereas the 0.003 difference between MQ4b and RQ4b is not (χ2 =
0.45, p < 0.501). Below aspirations, quarter 2 and quarter 3 behave similarly to quarter 1, suggesting that H3 is supported in the vast majority of the data. The non-support to H3 for large attainment discrepancy levels at quarter 4 arises because risk taking approaches 1, thereby censoring the increasing effect of Yard line. For additional details, see our analysis in Online Appendix Part 1.

Hypothesis 4 predicts that the effect of likelihoods in the neighborhood of
the aspiration level is stronger above than below the aspiration level. Figure 5
shows support for H4 for both quarters 1 and 4, as the average marginal effect
becomes stronger (more negative) as attainment discrepancy shifts from below
to above the aspiration level. The differences in marginal effects between
points RQ1b and RQ1a, as well as between RQ4b and RQ1a, are statistically signifi-
cant (difference 0.83, χ2 = 13.69, p < 0.001 and 0.83, χ2 = 17.86, p < 0.001, respectively). As detailed in Online Appendix Part 1, H4 is supported through- out the data.

Hypothesis 5 predicts that the effect of the likelihood of outcomes becomes
weaker the larger the size of the attainment discrepancy above the aspiration
level. Figure 5 shows that H5 is strongly supported: above aspirations, the mar-
ginal effect of the likelihood attribute becomes less negative when the attain-
ment discrepancy increases in quarter 1 and quarter 4. The differences in
marginal effects between MQ1a and RQ1a, as well as between MQ4a and RQ4a,

Figure 3. Average Marginal Effect (Semielasticity ey/dx) of Attainment Discrepancy at Q1 and

Sobrepere i Profitós et al. 1033

are 0.583 and 0.595, respectively, which are both statistically significant (χ2 =
6.00, p < 0.05 and χ2 = 7.39, p < 0.01). As detailed in Online Appendix Part 1, H5 is supported throughout the data.

We do not formalize a prediction for the moderation between attainment dis-
crepancy above the aspiration level and the magnitudes of outcomes or for the
moderation between attainment discrepancy below the aspiration level and the

Figure 4. Average Marginal Effect (Semielasticity ey/dx) of Yard Line (Magnitude of Outcome)

at Q1 and Q4

Figure 5. Average Marginal Effect (Semielasticity ey/dx) of Yards Left (Likelihood of Outcome)

at Q1 and Q4

1034 Administrative Science Quarterly 67 (2022)

likelihood attribute. As displayed in Figures 4 and 5, no clear effect can be con-
cluded regarding these moderations.

Additional Analysis and Robustness Tests

We conduct many robustness tests, which we report in the Online Appendix.
Here we focus on a specific analysis that provides further insight: continuous spec-
ification of deadline proximity. In the analysis reported in Model 3 in Table 3, we
replicate Model 2, replacing the variables Quarter 2, Quarter 3, and Quarter 4 with
the variable Remaining time, a continuous measure that captures the remaining
minutes for performance evaluation. We include both linear and quadratic terms of
Remaining time to avoid imposing strictly linear effects because the main analysis
suggests that the moderation is not linear. Support for all hypotheses is robust to
this alternative specification, and results from Model 3 suggest that Remaining
time moderation is, indeed, not linear but in decreasing returns the further the
deadline is (for more detail, see Online Appendix Parts 1 and 2). In addition to test-
ing the robustness of our findings to the alternative specification, we use

Model 3

to illustrate effect sizes that the results above imply.10

For the effect of Yard line, we proposed that the further the deadline (H1)
and the larger the attainment discrepancy are (H3), the stronger the effect is.
We observe that when the deadline is 40 minutes away (far from the deadline)
and the team is trailing by 14 points (experiencing a large shortfall), changing
Yard line from –15 to +15 increases Risk taking 26-fold (from 1.5 to 39 per-
cent); the same change in Yard line when the deadline is only 5 minutes away
and the game is tied increases Risk taking only 1.7-fold (from 13 to 22 percent).

For the effect of Yards left, we proposed that the further the deadline is
(H2), the stronger the effect is; that the effect is strongest with an Attainment
discrepancy just above aspirations (H4); and that it weakens as Attainment dis-
crepancy increases above aspirations (H5). We observe that when the deadline
is 40 minutes away and the team is ahead by only 1 point, changing Yards left
from 5 to 1 increases Risk taking 30-fold (from 1.4 to 42 percent); the same
change in Yards left when the deadline is only 5 minutes away and the team is
ahead by 14 points increases Risk taking only 3-fold (from 5 to 15 percent).

In addition, for the effect of Attainment discrepancy we predicted that the
closer the deadline is, the stronger the effect is (H0). We observe that changing
Attainment discrepancy from 0 to –14 increases Risk taking 5.4-fold (from 17 to
92 percent) when the deadline is 5 minutes away, while the effect is only 1.3-
fold (from 7 to 9 percent) when the deadline is still 40 minutes away.

DISCUSSION

In this study, we set out to explain organizational risk taking, considering the
two blades of Simon’s (1990) scissors: the decision context and how decision
makers process information regarding decision content. We show that deadline

10 The effect sizes are based on predictive margins, which requires the model’s intercept to be esti-

mated. As conditional maximum likelihood logit models do not estimate the intercept (Wooldridge,

2010), we use the corresponding unconditional maximum likelihood logit model, following the same

logic as with the figures presented earlier in the paper. We set Yards left at 3 for the Yard line and

Attainment discrepancy examples and Yard line at 0 for the Yards left and Attainment discrepancy

examples. All other variables are set at mean or at their most frequent value for the case of categor-

ical variables.

Sobrepere i Profitós et al. 1035

Table 3. Logistic Regression Analysis for the Likelihood of Fourth-Down Attempt (Proximity to

Performance Evaluation in Linear and Quadratic Form)

Model 3

Baseline ×Remaining Time ×Remaining Time^2

Negative attainment discrepancy 0.672•••

(0.018)

1.02•••

(0.002)

0.9998•••

(0.00003)

Positive attainment discrepancy 1.044

(0.042)

0.9896••

(0.003)

1.002••

(0.00007)

Valence indicator 0.196•••

(0.077)

1.143•••

(0.034)

0.998•••

(0.001)

Yards to go for first down (log) 0.624•••

(0.055)

0.926•••

(0.007)

1.001•••

(0.0001)

Yard line 0.997

(0.007)

1.005•••

(0.001)

0.9999•••

(0.0001)

Field goal alternative 0.74•

(0.098)

0.938•••

(0.011)

1.001•••

(0.002)

Yards to go for first down (log) × Negative attainment discrepancy 1.013

(0.009)

Yards to go for first down (log) × Positive attainment discrepancy 1.044•

(0.019)

Yards to go for first down (log) × Valence indicator 0.583••

(0.1)

Yard line × Negative attainment discrepancy 0.997•••

(0.001)

Yard line × Positive attainment discrepancy 0.9998

(0.002)

Yard line × Valence indicator 0.999

(0.014)

Field goal alternative × Negative attainment discrepancy 1.033•

(0.013)

Field goal alternative × Positive attainment discrepancy 1.008

(0.027)

Field goal alternative × Valence indicator 1.372

(0.338)

Last minutes quarter 2 1.296•

(0.164)

Last minutes quarter 4 4.63•••

(0.592)

Home-field advantage 1.176••

(0.067)

Difference in team quality 1.073

(0.1)

Within-game momentum (>0) 0.992

(0.013)

Within-game momentum (<0) 1.005

(0.009)

Across-game momentum (> 0) 0.949

(0.031)

Across-game momentum (< 0) 1.021

(0.031)

Memory two last attempts 1.243•

(0.123)

Attainment discrepancy for playoff classification (

(0.024)

Rivalry 1.145

(0.151)

(continued)

1036 Administrative Science Quarterly 67 (2022)

proximity modifies the diagnostic value and therefore the weight of an attain-
ment discrepancy regarding the organizational goal and of the intrinsic
attributes of alternatives in risky choices. We further show that information
processing regarding the intrinsic attributes also depends on the size and
valence of the attainment discrepancy. These findings have important
implications for research on organizational risk taking, extend the behavioral
theory of the firm, and suggest modifications to prospect theory when applied
in the organizational context.

Implications for the Behavioral Theory of the Firm

In its original formulation, the behavioral theory of the firm focused on search
and change as the main organizational responses to performance feedback,
and later research extended this theory to organizational risk taking (Singh,
1986; March and Shapira, 1987; Bromiley, 1991; March and Shapira, 1992;
Wiseman and Bromiley, 1996). This research has mostly stayed true to the
core idea that attainment discrepancies regarding an organizational goal drive
organizational responses. While this focus on performance feedback as the
sole driver of organizational response has provided a useful simplification for
explaining aggregate risk taking, it is insufficient for explaining specific choices.
Our study extends the theory by incorporating the intrinsic attributes of
alternatives and explaining how these attributes, jointly with performance feed-
back, affect risky choices.

Our core argument has been that decision makers use intrinsic attributes in
their risky choices based on the attributes’ diagnostic value for assessing the
potential to achieve an organizational goal, which is shaped by performance
feedback. In particular, we focused on the moderating effects of deadline prox-
imity and the size and valence of attainment discrepancy. But other

Table 3. (continued)

Model 3

Baseline ×Remaining Time ×Remaining Time^2

Quarterback’s quality 1.002

(0.003)

Coach’s tenure on the team 1.003

(0.011)

Quarterback’s tenure on the team 1.007

(0.013)

Remaining time 1.036•

(0.016)

Remaining time^2 0.999•

(0.0003)

Week control Included

Opposing team control Included

n 23,895

LR w2 7,398.07•••

+ p < .10; •p < .05; ••p < .01. •••p < .001 (two-tailed tests).

Sobrepere i Profitós et al. 1037

characteristics of performance feedback may also affect the diagnostic value of
intrinsic attributes. For instance, we observe that organizations do not clearly
react to performance feedback that is ambiguous because of inconsistent feed-
back (Joseph and Gaba, 2015), when multiple goals exist (Audia and Greve,
2021; Levinthal and Rerup, 2021), when decision makers are prone to self-
enhancement (Jordan and Audia, 2012), or when the feedback is highly noisy
or may be systematically distorted (Fang, Kim, and Milliken, 2014). In those
instances, and parallel to our findings regarding the moderating role of deadline
proximity, we might expect decision makers to rely more on the intrinsic
attributes of the alternatives they encounter when performance feedback does
not trigger organizational reactions. As our study shows that organizational
decision making depends on decision makers’ perception of the diagnostic
value of information to assess its contribution to achieving the organizational
goal, future research should strive to identify additional factors that underlie
decision makers’ perception of such diagnostic value.

Integrating intrinsic attributes of alternatives with organizational performance
feedback has broader implications for performance feedback theory’s applica-
tion beyond risk taking. Because of the focus on aggregate responses,
problems involving choice among a limited number of alternatives have typically
not been theorized by employing performance feedback theory (for notable
exceptions see, for instance, Greve, 1998; Kuusela, Keil, and Maula, 2017). For
example, when organizations choose among different entry modes, alternative
technologies, or different organizational forms, performance feedback alone is
insufficient to explain the choice. Our findings suggest that we can extend per-
formance feedback theory to these choice problems by incorporating some
attributes of the alternatives that organizations face. Future research should
therefore identify additional attributes that allow our arguments to extend to a
broader set of choice problems.

Finally, our results indicate a decision maker who is informationally far more
sophisticated and strategic than the behavioral theory of the firm has previously
considered. Previous research has perhaps taken an extreme view of bounded
rationality and has therefore underplayed decision makers’ capacity to consider
the information most useful and important for making choices regarding risky
alternatives and to flexibly process this information. Future research needs to
consider decision makers who are smart and strategic in their information use
within the boundaries of their cognitive abilities and biases.

Implications for Prospect Theory

Previous research applying arguments from prospect theory in the organiza-
tional context has often done so in conjunction with theorizing about perfor-
mance feedback. Yet this research has typically ignored differences between
the two theories and potential boundary conditions to their applicability, proba-
bly because arguments in both theories appear similar on the surface
(Bromiley, 2010; Kacperczyk, Beckman, and Moliterno, 2015; Bromiley and
Rau, 2022). Our arguments and results suggest that caution is warranted in
combining these two theories given their important differences in focus and
assumptions. While prospect theory has proven robust in the context for which
it was originally developed, applications in the organizational context require
important modifications.

1038 Administrative Science Quarterly 67 (2022)

Specifically, prospect theory assumes that a decision maker seeks to maxi-
mize outcomes based on their biased assessments of the alternatives. In con-
trast, in the organizational context, decision makers aim to achieve an aspired
level of performance—that is, they satisfice (Simon, 1947, 1955). Prospect the-
ory further assumes that decisions are evaluated separately and are made from
a strict better-off perspective. These assumptions typically do not hold in
organizations. Rather, decision makers in organizations may care more about
whether a decision contributes to reaching the organizational goal when com-
bined with other decisions than about whether they expect each decision to
make the decision maker better off. Furthermore, unlike most individual deci-
sion makers, for organizational decision makers, the organization tends to bear
the cost of each decision. Organizational decision makers’ personal perfor-
mance evaluations are based mainly on achieving the organizational goal at the
end of the performance period, not on the results of individual choices. As a
result of these important differences, decision makers weigh information as a
function of its diagnostic value for assessing the extent to which taking each
specific alternative may contribute to achieving the organizational goal; there-
fore decision makers process information regarding intrinsic attributes condi-
tionally upon performance feedback.

By identifying important modifications in the organizational context, our
research adds to studies that have identified microcontextual factors, such as
presentation format or target of the task, that can modify the effect theorized
by prospect theory (e.g., Levin and Chapman, 1990; Takemura, 1994; Wang,
Simons, and Brédart, 2001; Imas, 2016). While we acknowledge the useful-
ness and importance of the theory to inform organizational choices and thus
incorporate it into our theory, our arguments suggest that the organizational
context modifies information processing regarding the intrinsic attributes in
important ways. When scholars apply prospect theory to the organizational con-
text without taking these modifications into account, the resulting predictions
may be misleading.

Despite our emphasis on modifying the theory for the organizational context,
our arguments nonetheless align in spirit with the logic of deviations from
expected utility that is central to prospect theory. By accounting for decision
makers’ cognitive biases in interpreting the intrinsic attributes of risky choices,
prospect theory’s key insight has been that a decision maker will not use the
expected utility (i.e., the probability-weighted mean of the magnitude of
outcomes) of an alternative to make decisions but, rather, will deviate from this
logic—for instance, depending on whether the outcome is in the domain of
gains or losses or whether likelihoods are very small or very large (Kahneman
and Tversky, 1979; Tversky and Kahneman, 1992; Barberis, 2013; Ruggeri
et al., 2020). Our arguments suggest further deviations from expected utility in
the organizational context.

Practical Implications

Our results suggest that deadline proximity reduces the diagnostic value of
intrinsic attributes because reacting to attainment discrepancy becomes urgent
and thus justifies deviating from better-off assessments. In our context, tempo-
ral proximity of performance evaluation was exogenous, but in many organiza-
tional contexts it may be under the control of the organizational designer. This

Sobrepere i Profitós et al. 1039

implies that an organizational designer could guide choices toward organiza-
tional goals by changing the length of performance periods. For instance, an
organization may move from yearly to quarterly performance periods or
increase the number of evaluation steps in the product development process
to tie choices more strongly to performance feedback rather than to intrinsic
attributes. In contrast, by lengthening the performance period, organizational
designers may shift the focus in risky choices from the choice’s impact on
attaining the organizational goal toward whether it makes the organization bet-
ter off. When performance feedback is highly noisy or otherwise distorted,
such behavior may be advisable.

We also showed that decision makers’ focus on achieving the organizational
goal may lead them to diverge from the better-off logic as a function of attain-
ment discrepancy. Such behavior may not be desirable in all circumstances.
For instance, if a change in the market environment makes an aspiration no lon-
ger attainable, a large negative attainment discrepancy may lead to risk-taking
behavior that is likely to make the organization worse off if decision makers
choose high-risk alternatives to close an attainment discrepancy that can no
longer be closed. Additionally, due to the concavity of the value function above
the reference point, large positive attainment discrepancies may lead to behav-
ior that undervalues changes in current performance. While in our context the
performance aspiration was exogenous and not modifiable, in many contexts
organizational designers may address this by adjusting the performance aspira-
tion when such behavior is not desired.11

Boundary Conditions, Limitations, and Future Research

A theoretical boundary condition of our study is that we focused on explaining
risk taking as an organizational response to performance feedback.
Organizations also respond through search and change, and future research
should explore the implications of our theory for these responses. For instance,
performance feedback theory suggests that organizations stop searching once
they identify a solution that restores performance above aspirations (Cyert and
March, 1963; Posen et al., 2018), but we have proposed that such satisficing
behavior is contingent on the diagnostic value of the attainment discrepancy.
Thus an implication of our theory to search behavior may be that when attain-
ment discrepancy holds low diagnostic value, decision makers might not stop
search behavior but may explore additional solutions, aiming to improve current
performance. Similarly, given the importance of the intrinsic attributes of
alternatives that organizations face, organizations might be motivated to
change if they encounter very attractive alternatives, even in cases when per-
formance is already above aspirations.

11 While we kept the practical implications generic for organizations, our findings also have specific

implications for NFL members. For instance, if the offensive team is on third down with still 10

yards to go and winning the game by a narrow margin, the defensive coordinator can safely assume

that anything resulting in more than 3 yards left will be sufficient for the offensive team to not go

for it on the fourth down. In that case, the defensive coordinator could frame the defense strategy

to make sure the offensive team is unable to advance more than 7 yards (for instance provoking a

run decision or even a short pass) rather than just defending aggressively, making the possibility of

advancing more than 7 yards more likely.

1040 Administrative Science Quarterly 67 (2022)

Instrumental for our study’s theoretical development has been the combina-
tion of a limited number of choice alternatives and a largely binary goal
(whether to win or not). These boundary conditions of our theory should each
be relaxed to test the generalizability of our arguments to a broader set of
contexts. One relevant research opportunity relates to the question of how
decision makers will process information regarding the intrinsic attributes of
alternatives when the number of choice alternatives increases. Given decision
makers’ bounded rationality, we may expect that information regarding the
alternatives is being processed differently from the processes discussed in this
paper when a very large number of alternatives exists. Another relevant
research opportunity relates to relaxing the binary goal. In our study we
assume that winning by a large margin is not important for decision makers. In
other contexts, the level of under- or over-performance may have higher impor-
tance for decision makers, such as when performance incentives are tied to
the degree of under- or over-performance.

Scope limitations also exist in our study that provide opportunities for further
research. We chose to focus on the first-order moderating effects of deadline
proximity and the size and valence of attainment discrepancy. One may expect
additional higher-order effects of combining these attributes, and while a sys-
tematic theoretical and empirical treatment of these effects was outside the
scope of this study, our ex-post explorations suggest that such effects are
likely to exist. Future research should extend our study to these higher-order
effects. In particular, the three-way interaction between attainment discrep-
ancy, the intrinsic attributes, and deadline proximity is of theoretical interest:
are the interactions between attainment discrepancy and intrinsic attributes
enhanced by deadline proximity, due to higher diagnostic value of attainment
discrepancy, or is such an effect counterbalanced by intrinsic attributes losing
diagnostic value with time? Additional higher-order effects could relate to the
interaction between the two intrinsic attributes conditional on attainment dis-
crepancy or on deadline proximity.

Finally, the NFL context of our study has specific empirical limitations. First,
in the decision we examine, baseline risk taking is low (the organization
chooses to go for it in only approximately 10 percent of cases), which may
affect the nature of information processing. Future research could investigate
settings in which risk taking is the norm and decision makers may have the
capacity to be more selective about alternatives and might therefore engage in
different types of information processing. Second, decisions during NFL games
are highly emotionally charged, and affective responses may influence decision
making. For instance, the position in the field, particularly when the attacking
team approaches the end zone, may create excitement, and such emotions
may also affect how decision makers respond to intrinsic attributes. Similarly,
several consecutive, successful plays may create positive emotions that could
affect how decision makers respond to the magnitude of the potential reward.

More generally, while the NFL context provided a highly suitable context for
testing our theoretical arguments, future research would need to test and
extend our arguments to other industries. Such research may begin with other
sports industries that provide a context with similarly clear rules. But to exam-
ine the limits to generalizability of our findings, other industries should also be
investigated, despite the difficulty of deriving similarly clear measures.

Sobrepere i Profitós et al. 1041

Conclusion

Theories of how performance feedback shapes organizational risk-taking
decisions and how decision makers draw on intrinsic attributes when making
risky choices have developed largely in separation. Drawing on Simon’s (1947,
1990) notion of scissors, our arguments and results suggest that such a single-
sided approach is inadequate and may lead to misleading or at least incomplete
predictions. In organizational risk-taking choices, decision makers attempt to
make decisions that are ‘‘organizationally’’ rational, that is, decisions that are
‘‘oriented to the organization’s goals’’ (Simon, 1947: 85). In doing so, they con-
sider information regarding the intrinsic attributes of choices; yet how they pro-
cess information regarding these attributes is conditional on performance
feedback and subject to biases. We hope that future research will build on our
arguments, which are based on Simon’s original view, to develop a richer
behavioral theory of organizational decision making by accounting for both the
organizational context and the cognitive approach of decision makers.

Acknowledgments

This article would not have been what it is without the thoughtful guidance and insights
of the editor Henrich Greve. We would also like to acknowledge the insightful
comments by three excellent reviewers. The project started during the first author’s dis-
sertation at IESE Business School, and the first author would like to thank the
participants in IESE’s brown bag seminars, the members of his dissertation committee,
and particularly his advisor, Africa Ariño, as well as Nadim Elayan, who provided detailed
feedback during the data collection. We also would like to acknowledge the thoughtful
comments we received on earlier versions of the paper from Pere Arqué-Castells, Pino
Audia, Dovev Lavie, Johannes Müller-Trede, and Ohad Ref. Earlier versions of the paper
were presented at seminars at Bocconi and ESSEC as well as at various conferences,
and we thank the participants for their comments and feedback.

ORCID iDs

Xavier Sobrepere i Profitós https://orcid.org/0000-0003-2203-1118
Thomas Keil https://orcid.org/0000-0001-6124-0655
Pasi Kuusela https://orcid.org/0000-0003-0254-598X

Supplementary Material

Find the Online Appendix at https://journals.sagepub.com/doi/full/10.1177/0001839222
1117996#supplementary-materials.

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Authors’ Biographies

Xavier Sobrepere i Profitós is the Director of the Academic Department of Business
and Management Strategy at the Universitat Pompeu Fabra, Barcelona School of
Management. Xavier received his Ph.D. at IESE Business School. His research interests
lie within the Behavioral Strategy field, with particular interest in the Behavioral Theory
of the Firm, Upper Echelons Theory, and Rational Ecology.

Sobrepere i Profitós et al. 1047

Thomas Keil holds the Chair in International Management at the University of Zurich,
Switzerland. Thomas received his D.Sc. (Tech.) at Helsinki University of Technology
(today Aalto University), Finland. In addition to the Behavioral Theory of the Firm, his
research focuses on mergers and acquisitions, corporate entrepreneurship, and corpo-
rate governance.

Pasi Kuusela is an Assistant Professor in the Faculty of Economics and Business at the
University of Groningen, the Netherlands. He holds a D.Sc. (Tech.) in technology strat-
egy and venturing from Aalto University, Finland. His research interests fall within the
Behavioral Theory of the Firm, mergers and acquisitions, and innovation.

1048 Administrative Science Quarterly 67 (2022)

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