Beyond problemistic search: a contingency perspective on organizational response to performance feedback

Using the behavioral theory of the firm, we develop a contingency perspective of organizational search. Based on an analysis of the risk preference and learning needs of high- and low-performing organizations, we propose that low-performing, risk-tolerant organizations benefit most from searching across boundaries for new knowledge. Conversely, high-performing, risk-averse organizations benefit from internal searches to refine existing routines. We tested these propositions using a regression discontinuity design, analyzing New York City public schools’ responses to academic performance signals. Our empirical results largely support our propositions, enriching the understanding of organizations’ adoption of different search strategies in response to performance signals.