Extending the research on performance feedback and problemistic search, which theorizes that firm performance below the aspiration level triggers organizational search behaviors, this study examines how the inside-outside distinction of the firm management team and board members can influence the allocation of organizational attention to the performance feedback process. A longitudinal study of Korean manufacturing firms demonstrates that while a firm management team's outside experience intensifies the firm's R&D investment in response to underperformance, this effect is substituted by the presence of outside directors on the board. Our results indicate that both managers and board members can have notable influence on performance feedback and suggest that performance feedback research should examine the factors that affect the attention processing of key decision makers.
Bibliographical noteFunding Information:
The authors thank Henrich R. Greve and Ji-hyun Kim for constructive and critical comments on the manuscript. We also thank Sea-Jin Chang for allowing us to access the data used in this study. This work was supported by the Ministry of Education of the Republic of Korea and the National Research Foundation of Korea ( NRF-2017S1A5A2A01025232 ) to Mooweon Rhee and the UNIST Research Fund ( 1.140069.01 ), Management of Technology Fund ( 2.170190.01 ) to Young-Choon Kim. These funding sources had no involvement in study design, data collection, analysis and interpretation of data, writing of the report or the decision to submit the article for publication.
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