The Paradox of Stretch Goals: Organizations in Pursuit of the Seemingly Impossible

Abstract

We investigate the organizational pursuit of seemingly impossible goals-commonly known as stretch goals. Building from our analysis of the mechanisms through which stretch goals could influence organizational learning and performance, we offer a contingency framework evaluating which organizations are positioned to benefit from such extreme goals and which are most likely to pursue them. We conclude that stretch goals are, paradoxically, most seductive for organizations that can least afford the risks associated with them.

Managing Carbon Aspirations: The Influence of Corporate Climate Change Targets on Environmental Performance

“…By aspiring to improve their environmental performance in a significant manner, firms commit themselves to outcomes hitherto unthinkable and unobserved. Targets trigger cognitive and motivational processes (Sitkin et al 2011;Zhang and Jia 2013) which direct, energize, and encourage persistence needed to work toward their achievement, and which indirectly stimulate changed behaviors inside the organization (Locke and Latham 2009). Consequently, targets have the potential to unleash creativity, urgency, and excitement among employees with the purpose of collaborating, learning, innovating, and deviating from existing routines, habits, and practices to drive significant performance improvements (Halme 2002;Winter 2000).…”

“…Prior research has noted that the achievement of targets can be impeded when actors find it difficult to identify with them, or when targets provoke disappointment and demotivation because progress is slow. Particularly since climate change targets may by their nature be associated with significant uncertainty in relation to the processes and strategies for implementation, they can create internal resistance (Mishina et al 2010;Sitkin et al 2011;Zhang and Jia 2013). For example, there is the recognition that technological and operational "lock-in" due to long and large-scale investment cycles determines firms' performance levels for years if not decades (Unruh 2002).…”

Managerial Risk Taking

“…For instance, some scholars have found that risk taking affects individual outcomes such as managers' subsequent changes in pay and long-term pay (Seo et al, 2014), satisfaction with firm performance , the CEO vega (i.e., CEO wealth associated with stock options) and the CEO's future risk taking (Coles et al, 2006). Other studies have shown how it affects firm outcomes (see Andersen et al, 2007;Bromiley et al, 2001;Nickel & Rodriguez, 2002;Ruefli, Collins & LaCugna, 1999)--principally firm performance (e.g., Bromiley, 1991;Strandholm et al, 2004;Villena et al, 2009) but also corporate restructuring and diversification (Hoskisson, Hitt, & Hill, 1991), firm recovery (Morrow et al, 2007), learning (Sitkin, See, Miller, Lawless, & Carton, 2011), survival/failure Latham & Braun, 2009), structure (environment-scanning, technocratization, differentiation : Miller et al, 1982), internationalization (Reuber & Fischer, 1997), product introduction divestiture (Hoskisson et al, 1994;Pathak et al, 2014), and BOD oversight of earning statements (Laux & Laux, 2009). …”

From routine to uncertainty: Leading adaptable teams within integrated operations

“…As such, the idea of raising performance through clear goals (or stretch goals), creating commitment, and giving feedback are some of the strongest psychological guidelines in the business world (Hackman & Oldham, 1976;Locke, 1968Locke, , 2004Sherman, 1995;Sitkin, See, Miller, Lawless, & Carton, 2011), and exert mental pressure. However, this is not the same pressure as that felt when operating in the frontline of warfare.…”