Superstitious learning with rare strategic decisions: Theory and evidence from corporate acquisitions

Organization Science

Volumn 20, Issue 5, 2009, Pages 894-908

  Zollo, Maurizio ^a  

^a BOCCONI UNIVERSITY   (Italy)

Author keywords

Banking; Mergers and acquisitions; Organizational learning; Superstitious learning

Indexed keywords

EID: 73949090508     PISSN: 10477039     EISSN: 15265455     Source Type: Journal    
DOI: 10.1287/orsc.1090.0459     Document Type: Article

References (87)

1. Amburgey, T. L., A. S. Miner. 1992. Strategic momentum: The effects of repetitive, positional and contextual momentum on merger activity. Strategic Management J. 13(5) 335-348.
2. Anand, B., T. Khanna. 2000. Do firms learn to create value? The case of alliances. Strategic Management J. 21(3) 295-316.
3. Anderson, E. 1990. Two firms, one frontier: On assessing joint venture performance. Sloan Management Rev. 31 19-30.
4. Argote, L. 1999. Organizational Learning: Creating, Retaining and Transferring Knowledge. Kluwer Academic Publishers, Norwell, MA.
5. Ayron, P., A. G. R. McCleiland. 1997. How real is overconfidence? J. Behavioral Decision Making 10 279-286.
6. Beckman, C., P. Haunschild. 2002. Network learning: The effects of partners' heterogeneity of experience on corporate acquisitions. Admin. Sci. Quart. 47 92-124.
7. Brown, J., P. Duguid. 1991. Organizational learning and communities of practice: Toward a unified view of working, learning, and innovating. Organ. Sci. 2(1) 40-57.
8. Brown, S. L., K. M. Eisenhardt. 1997. The art of continuous change: Linking complexity theory and time-paced evolution in relentlessly shifting organizations. Admin. Sci. Quart. 42 1-34.
9. Bruton, G. D., B. M. Oviatt, M. A. White. 1994. Performance of acquisitions of distressed firms. Acad. Management J. 37 972-989.
10. Capron, L. 1999. The long-term performance of horizontal acquisitions. Strategic Management J. 20 987-1018.
11. Chatterjee, S. 1986. Types of synergy and economic value: The impact of acquisitions on merging and rival firms. Strategic Management J. 7 119-139.
12. Datta, D. K. 1991. Organizational fit and acquisition performance: Effects of post-acquisition integration. Strategic Management J. 12 281-297.
13. Datta, D. K., J. H. Grant. 1990. Relationships between type of acquisition, the autonomy given to the acquired firm, and acquisition success: An empirical analysis. J. Management 16 29-44.
14. Deffenbacher, K. A. 1980. Eyewitness accuracy and confidence. Law Human Behav. 4 243-260.
15. Dunning, D., D. W. Griffin, J. D. Milojkovic, L. Ross. 1990. The overconfidence effect in social prediction. J. Personality Soc. Psych. 58 568-581.
16. Eisenhardt, K., B. Tabrizi. 1995. Accelerating adaptive processes: Product innovation in the global computer industry. Admin. Sci. Quart. 40 84-110.
17. Fama, E. F., K. R. French. 1992. The cross-section of expected stock returns. J. Finance 47 427-466.
18. Fama, E. F., K. R. French. 1993. Common risk factors in the returns on stocks and bonds. J. Financial Econom. 33 3-56.
19. Fama, E. F., K. R. French. 1996. The CAPM is wanted, dead or alive. J. Finance 51 1947-1958.
20. Fowler, F. J. 1993. Survey Research Methods. Sage Publications, Thousand Oaks, CA.
21. Fowler, F. K., D. Schmidt. 1989. Determinants of tender offer postacquisition financial performance. Strategic Management J. 10 339-350.
22. Gavetti, G. 2005. Cognition and hierarchy: Rethinking the microfoundations of capabilities' development. Organ. Sci. 16(6) 599-617.
23. Gavetti, G., D. Levinthal, J. Rivkin. 2005. Strategy making in novel and complex worlds: The power of analogy. Strategic Management J. 26(8) 691-712.
24. Goldberg, L. R. 1959. The effectiveness of clinicians' judgments: The diagnosis of organic brain damage from the Bender-Gestalt test. J. Consulting Psych. 23 25-33.
25. Greve, H. R. 1999. The effect of change on performance: Inertia and regression towards the mean. Admin. Sci. Quart. 44 590-614.
26. Greve, H. R. 2003. Organizational Learning from Performance Feedback: A Behavioral Perspective on Innovation and Change. Cambridge University Press, Cambridge, UK.
27. Groves, R. M., R. B. Cialdini, M. P. Couper. 1992. Understanding the decision to participate in a survey. Public Opinion Quart. 56 475-495.
28. Haleblian, J., S. Finkelstein. 1999. The influence of organizational acquisition experience on acquisition performance: A behavioral learning perspective. Admin. Sci. Quart. 44 29-56.
29. Haleblian, J., J. Kim, N. Rajagopalan. 2006. The influence of acquisition experience and performance on acquisition behavior: Evidence from the U.S. commercial banking industry. Acad. Management J. 49(2) 357-370.
30. Hambrick, D., T. Cho, M. Chen. 1996. The influence of top management team heterogeneity on firms' competitive moves. Admin. Sci. Quart. 41 659-684.
31. Haspeslagh, P., D. Jemison. 1991. Managing Acquisitions. Free Press, New York.
32. Haunschild, P., B. Ni. 2002. Learning from complexity: Effects of prior accidents and incidents on airlines' learning. Admin. Sci. Quart. 47 609-643.
33. Hayward, M. L. A. 2002. When do firms learn from their acquisition experience? Evidence from 1990-1995. Strategic Management J. 23 21-40.
34. Healy, P. M., K. Palepu, R. S. Ruback. 1992. Does corporate performance improve after mergers? J. Financial Econom. 31 135-175.
35. Helfat, C., S. Fynkelstein, W. Mitchell, H. Singh, D. Teece, S. Winter. 2007. Dynamic Capabilities: Strategic Change in Organizations. Blackwell, Oxford, UK.
36. Herriott, S. R., D. Levinthal, J. G. March. 1985. Learning from experience in organizations. Amer. Econom. Rev. 75 298-302.
37. Ikenberry, D., J. Lakonishok, T. Vermaelen. 1995. Market underreaction to open market share repurchases. J. Financial Econom. 39 181-208.
38. Kale, P. 1999. Building an alliance capability: A knowledge-based approach. Unpublished dissertation, University of Pennsylvania, Philadelphia.
39. Kale, P., H. Singh. 2007. Building firm capabilities through learning: The role of the alliance learning process in alliance capability and firm level alliance success. Strategic Management J. 28(10) 981-1000.
40. Keck, S. L., M. Tushman. 1993. Environmental and organizational context and executive team structure. Acad. Management J. 36 1314-1344.
41. Klayman, J., J. B. Soll, C. Gonzales-Vallejo, S. Barlas. 1999. Overconfidence: It depends on how, what and whom you ask. Organ. Behav. Human Decision Processes 79(3) 216-247.
42. Kogut, B., U. Zander. 1992. Knowledge of the firm, combinative capabilities, and the replication of technology. Organ. Sci. 3(3) 383-397.
43. Kusewitt, J. B., Jr. 1985. An exploratory study of strategic acquisition factors relating to performance. Strategic Management J. 6 151-170.
44. Lant, T., S. Mezias. 1990. Managing discontinuous change: A simulation study of organizational learning and entrepreneurship. Strategic Management J. 11 147-180.
45. Levinthal, D. A., J. G. March. 1981. A model of adaptive organizational search. J. Econom. Behav. Organ. 2 307-333.
46. Levitt, B., J. G. March. 1988. Organizational learning. Ann. Rev. Sociol. 14 319-340.
47. Lichtenstein, S., B. Fischhoff. 1977. Do those who know more also know more about how much they know? Organ. Behav. Human Performance 20 150-183.
48. Lichtenstein, S., L. D. Phillips, B. Fischhoff. 1982. Calibration of probability: The state of the art in 1980. D. Kahneman, P. Slovic, A. Tversky, eds. Judgment Under Uncertainty: Heuristics and Biases. Cambridge University Press, Cambridge, UK.
49. Lubatkin, M. 1987. Merger strategies and stockholder value. Strategic Management J. 8 39-53.
50. Machiavelli, N. 1532. The Prince. Translated by W. K. Marriott, 1908. J. M. Dent & Sons, London.
51. Malmendier, U., G. Tate. 2005. CEO overconfidence and corporate investment. J. Finance 60(6) 2661-2700.
52. March, J., B. Levitt. 1988. Organizational learning. Annual Rev. Sociol. 16 319-340.
53. March, J. G., L. S. Sproull, M. Tamuz. 1991. Learning from samples of one or fewer. Organ. Sci. 2(1) 1-13.
54. Miller, D. 1993. The architecture of simplicity. Acad. Management Rev. 18 116-138.
55. Miller, D. 1999. Selection processes inside organizations: The self-reinforcing consequences of success. J. Baum, B. McKelvey, eds. Variations in Organization Science. Sage Publications, Thousand Oaks, CA.
56. Miller, D., M. J. Chen. 1994. Sources and consequences of competitive inertia. Admin. Sci. Quart. 39 1-23.
57. Miller, D., M. J. Chen. 1996. The simplicity of competitive repertoires. Strategic Management J. 17 419-439.
58. Milliken, F. J., T. K. Lant. 1991. The effects of an organization's recent performance history on strategic persistence and change. Adv. Strategic Management 7 129-156.
59. Nelson, R., S. Winter. 1982. An Evolutionary Theory of Economic Change. Harvard University Press, Cambridge, MA.
60. Neter, J., W. Wasserman, M. H. Kutner. 1985. Applied Linear Statistical Models, 2nd ed. Irwin, Homewood, IL.
61. Nonaka, I. 1994. A dynamic theory of organizational knowledge creation. Organ. Sci. 5(1) 14-37.
62. Ocasio, W. 1995. The enactment of economic adversity: A reconciliation of theories of failure-induced change and threat-rigidity. Res. Organ. Behav. 17 287-331.
63. Oskamp, S. 1965. Overconfidence in case study judgment. J. Consulting Psych. 29 261-265.
64. Rau, P. R., T. Vermaelen. 1998. Glamour, value and the postacquisition performance of acquiring firms. J. Financial Econom. 49(2) 223-253.
65. Ronis, D., F. Yatges. 1987. Components of probability judgment accuracy: Individual consistency and effects of subject matter and assessment method. Organ. Behav. Human Decision Processes 40(2) 193-218.
66. Seth, A. 1990. Sources of value creation in acquisitions: An empirical investigation. Strategic Management J. 11 431-46.
67. Shanley, M. T. 1994. Determinants and consequences of postacquisition change. G. Von Krogh, A. Krogh, A. Sinatra, H. Singh, eds. Managing Corporate Acquisitions: A Comparative Analysis. MacMillan Press, London, 391-413.
68. Singh, H., C. A. Montgomery. 1987. Corporate acquisition strategies and economic performance. Strategic Management J. 8 377-386.
69. Sitkin, S. B. 1992. Learning through failure: The strategy of small losses. Res. Organ. Behav. 14 231-266.
70. Skinner, B. F. 1948. "Superstition" in pigeons. J. Experiment. Psych. 38 168-172.
71. Soll, J. B., J. Klayman. 2004. Overconfidence in interval estimates. J. Experiment. Psych. 30(2) 299-314.
72. Szulanski, G. 2000. Appropriability and challenge of scope: Banc one routinizes replications. G. Dosi, R. R. Nelson, S. G. Winter, eds. The Nature and Dynamics of Organizational Capabilities. Oxford University Press, Oxford, UK, 69-98.
73. Teece, D., G. Pisano, A. Shuen. 1997. Dynamic capabilities and strategic management. Strategic Management J. 18(7) 509-533.
74. Vallone, R. P., D. W. Griffin, S. Lin, L. Ross. 1990. Overconfident predictions of future outcomes by self and others. J. Personality Soc. Psych. 58 582-592.
75. Watson, W., K. Kumar, L. Michaelsen. 1993. Cultural diversity's impact on interaction process and performance: Comparing homogeneous and diverse task groups. Acad. Management J. 36 590-602.
76. Weick, K. 1979. The Social Psychology of Organizing, 2nd ed. Addison-Wesley, Reading, MA.
77. Weick, K. 1995. Sensemaking in Organizations. Sage Publications, Thousand Oaks, CA.
78. Wiersema, M. F., K. Bantel. 1992. TMT demography and corporate strategic change. Acad. Management J. 35 91-121.
79. Winter, S. 1987. Knowledge and competence as strategic assets. D. J. Teece, ed. The Competitive Challenge: Strategies for Industrial Innovation and Renewal. Ballinger, Cambridge, MA, 159-184.
80. Winter, S., G. Szulanski. 2001. Replication as strategy. Organ. Sci. 12(6) 730-743.
81. Yelle, L. E. 1979. The learning curve: Historical review and comprehensive survey. Decision Sci. 10 302-328.
82. Zander, U., B. Kogut. 1995. Knowledge and the speed of the transfer and imitation of organizational capabilities: An empirical test. Organ. Sci. 6(1) 76-92.
83. Zollo, M. 1998. Knowledge codification, process routinization and the creation of organizational capabilities. Unpublished dissertation, University of Pennsylvania, Philadelphia.
84. Zollo, M., D. Meyer. 2008. What is M&A performance? Acad. Management Perspectives 55-77.
85. Zollo, M., J. Reuer. 2009. Experience spillovers across corporate development activities. Organ. Sci. Forthcoming.
86. Zollo, M., H. Singh. 2004. Deliberate learning in corporate acquisitions: Post-acquisition strategies and integration capability in U.S. bank mergers. Strategic Management J. 25 1233-1256.
87. Zollo, M., S. G. Winter. 2002. Deliberate learning and the evolution of dynamic capabilities. Organ. Sci. 13(3) 339-351.