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Market-Based Solutions to Vital Economic Issues


Kenan Institute 2024 Grand Challenge: Business Resilience
Market-Based Solutions to Vital Economic Issues
Feb 26, 2018

Multiple Organization Goals with Feedback from Shared Technological Task Environments


Goals and the performance feedback on those goals are fundamental to organizational learning and adaptation. However, most research has focused on single overall, high-level organizational goals, while ignoring important operational goals farther down in the goal hierarchy. This paper explores the important issue of interdependent feedback on multiple operational goals with shared task environments. We conjecture about the impact of shared technological task environments on feedback across goals. We then empirically examine these conjectures using panel vector autoregression (PVAR) analysis of performance feedback from three strategically important operational goals with shared technological task environments in the automobile industry. We find that interdependent feedback can lead to severe and misleading confusion regarding learning from feedback on such goals with shared task environments. Finally, we discuss the implications of our findings. These include the following for technological goals with shared task environments: the absolute intractability of the problem of meeting multiple goals with interdependent task environments as the number of goals increases; limits on the modularity of organization structure; severe challenges in ex post credit assignment and ex ante planning when goals share technological task environments. Finally, we discuss the application of PVAR to interdependent feedback problems in organizations.

Note: Research papers posted on SSRN, including any findings, may differ from the final version chosen for publication in academic journals.

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