Final published version
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Research output: Contribution to Journal/Magazine › Journal article › peer-review
Research output: Contribution to Journal/Magazine › Journal article › peer-review
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TY - JOUR
T1 - Causality rules
T2 - Performance feedback on hierarchically related goals and capital investment variability
AU - Mazzelli, Ambra
AU - Nason, Robert S.
AU - De Massis, Alfredo Vittorio
AU - Kotlar, Josip
PY - 2019/12/1
Y1 - 2019/12/1
N2 - We extend March and Simon's (1958) analysis of strategic decisions by distinguishing between two rules for allocating attention – priority versus causality. We develop theory concerning causality rules which have been largely overlooked in prior literature. Specifically, we examine how performance feedback on the intermediate productivity goal and the higher‐order profitability goal independently and jointly influence the variability of firm capital investments. Panel analysis of 2,477 Spanish manufacturing firms reveals that these goals jointly affect the variability of capital investments through both priority and causality attention rules. Our study provides new insights on how firms handle multiple goals, deconstruct performance feedback, and cope with the attentional constraints of bounded rationality.
AB - We extend March and Simon's (1958) analysis of strategic decisions by distinguishing between two rules for allocating attention – priority versus causality. We develop theory concerning causality rules which have been largely overlooked in prior literature. Specifically, we examine how performance feedback on the intermediate productivity goal and the higher‐order profitability goal independently and jointly influence the variability of firm capital investments. Panel analysis of 2,477 Spanish manufacturing firms reveals that these goals jointly affect the variability of capital investments through both priority and causality attention rules. Our study provides new insights on how firms handle multiple goals, deconstruct performance feedback, and cope with the attentional constraints of bounded rationality.
KW - attention rules
KW - capital investment variability
KW - organizational goals
KW - performance feedback
U2 - 10.1111/joms.12432
DO - 10.1111/joms.12432
M3 - Journal article
VL - 56
SP - 1630
EP - 1654
JO - Journal of Management Studies
JF - Journal of Management Studies
SN - 0022-2380
IS - 8
ER -