What question did this study set out to answer?

To resolve conflicting predictions regarding whether performance below aspiration levels increases or decreases corporate risk taking by evaluating firm size and resource endowments as boundary conditions.

January 1, 2006Management Science

Less Likely to Fail: Low Performance, Firm Size, and Factory Expansion in the Shipbuilding Industry

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To resolve conflicting predictions regarding whether performance below aspiration levels increases or decreases corporate risk taking by evaluating firm size and resource endowments as boundary conditions.
Analyzed factory expansion decisions as an indicator of organizational risk taking across shipbuilding firms.
Used firm size as an operational proxy for tangible resource endowments and safety buffers against failure.
Operating below aspiration levels reduced factory expansion risk taking among small firms.
Operating below aspiration levels either increased or did not alter risk taking among large firms, demonstrating greater inertia and failure buffering.

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Implication

Observational analysis reveals divergent risk-taking responses to underperformance based on firm size in the shipbuilding industry, indicating resource endowments buffer against failure threats.

Cite This Study

Audia et al. (2006) studied this question.

synapsesocial.com/papers/69d729d83f906f6a06bef82c https://doi.org/10.1287/mnsc.1050.0446

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Implication

Observational analysis reveals divergent risk-taking responses to underperformance based on firm size in the shipbuilding industry, indicating resource endowments buffer against failure threats.

Less Likely to Fail: Low Performance, Firm Size, and Factory Expansion in the Shipbuilding Industry

Key Points

Discussion

Implication

Cite This Study

Less Likely to Fail: Low Performance, Firm Size, and Factory Expansion in the Shipbuilding Industry

Key Points

Discussion

Implication

Cite This Study

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