Momentum and Organizational Risk Taking: Evidence from the National Football League

Abstract

This study examines how momentum shapes organizational risk taking. We define momentum as a sustained and systematic trajectory in performance over time, and we argue that such trends impact interpretations of current performance as well as expectations of future performance. Drawing on the variable focus of attention model, we posit that momentum therefore directs the focus of organizational attention between concerns of aspirations, survival, and slack. Our conceptual model accounts for momentum that occurs within a performance period as well as that which occurs across periods. We propose that within- and across-period momentums are unique in terms of when and how each type impacts risk taking. We tested and found support for our hypotheses in the context of 22,603 play-by-play decisions made by the 32 teams of the National Football League during the 2000–2005 regular season games. Theoretical and practical implications are discussed. This paper was accepted by Jesper Sørensen, organizations.

The effect of perceived streakiness on the shot‐taking behaviour of basketball players

“…Therefore, this behavior stands in contrast to the predictions of prospect theory. While these findings are similar to the ones by Lehman and Hahn (2013) …”

“…For instance, an organization surpassing its performance targets but experiencing negative momentum is predicted to choose a less risky option relative to an organization with the same performance and positive momentum. While Lehman and Hahn (2013) considered risk attitudes on an organizational level, our study extends their findings by examining whether the propensity to take risk also changes on an individual level as a function of momentum.…”

“…Occurrences of the hot-hand phenomenon are by far not only limited to the sports domain but can also be found in managerial and economic contexts (e.g. Lehman & Hahn, 2013;Offerman & Sonnemans, 2004), and researchers from these fields have developed a strong interest in examining the hot hand, too.…”

“…In line with this work, Lehman and Hahn (2013) examined organizational risk-taking by analyzing how attitudes toward risk changed in professional football as a function of momentum, where momentum was very similarly defined to the hot hand as it was assumed to begin after the second consecutive event, i.e. after two unanswered scoring episodes.…”

Goal Selection Internally and Externally: A Behavioral Theory of Institutionalization

“…Examples of such goals include market share (Greve ), revenue growth (Audia and Brion ), stock price returns (Mishina et al . ), accident cost (Baum and Dahlin ), sports teams winning records (Wezel and Saka‐Helmhout ) and game scores (Lehman and Hahn ; Lehman et al . ).…”