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

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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.
THE PARADOX OF STRETCH GOALS:
ORGANIZATIONS IN PURSUIT OF THE
SEEMINGLY IMPOSSIBLE
SIM B. SITKIN
Duke University
KELLY E. SEE
New York University
C. CHET MILLER
University of Houston
MICHAEL W. LAWLESS
University of Maryland
ANDREW M. CARTON
The Pennsylvania State University
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.
As highlighted by a number of organizational
theorists, organizations must balance short-term
performance concerns with long-term learning ob-
jectives (e.g., Levinthal & March, 1993; Sutcliffe,
Sitkin, & Browning, 2000). An organization can en-
sure continued survival only by performing well in
the near term while positioning itself for strong
performance in an uncertain future. Although lan-
guage and concepts from a number of theoretical
domains can be used to characterize the balanc-
ing of attention between the short term and the
long term, the organizational learning literature
provides the most directly relevant conceptualiza-
tion. From this perspective, organizations must in-
vest in activities that “exploit” their known current
capabilities (i.e., refinement, implementation, and
execution) while also investing in activities that
“explore” new, unknown possibilities (i.e., experi-
mentation, innovation, playfulness; e.g., Kang,
Morris, & Snell, 2007; Levinthal & March, 1993;
March, 1991; McGrath, 2001; Sitkin, Sutcliffe, &
Schroeder, 1994).
Although exploration is critical for long-term
learning, change, and survival, organizations of-
ten have difficulty searching outside their current
routines and processes (Adler & Obstfeld, 2007;
Baumard & Starbuck, 2005). Returns to invest-
ments that exploit existing capabilities are imme-
diate, whereas returns to exploration and learning
are distant and uncertain (March, 1991). Instead of
facing uncertainty, organizational actors often fail
to look into the distant future, choosing to “solve
pressing problems rather than develop long-run
strategies” (Cyert & March, 1963: 119). In essence,
existing routines can become sources of inertia
(Edmondson, Bohmer, & Pisano, 2001; Leonard-
Barton, 1992; Levitt & March, 1988).
Organizational theorists have proposed a
number of approaches for encouraging explora-
tion and discontinuous advances in learning (for
For their helpful comments on previous versions of this
manuscript, we thank Bettina Buechel, Rich Burton, Laura
Cardinal, Christina Fang, John Joseph, Theresa Lant, Rick
Larrick, Ed Locke, Frances Milliken, Elizabeth Morrison,
Gerardo Okhuysen, Randall Peterson, and three anonymous
reviewers. We also thank participants in the Harvard–MIT
Organizational Economics Seminar Series and the 2008
Academy of Management annual meeting.
Academy of Management Review
2011, Vol. 36, No. 3, 544–566.
544
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reviews see Greve, 2003; Huber, 1991; Levitt &
March, 1988; Sitkin, Sutcliffe, & Weick, 1998).
March (1991), for example, highlighted the value
of turnover that creates new perspectives. Chris-
tensen (1997) argued for forming new operating
units that are not encumbered by existing rou-
tines and capabilities. Siggelkow and Levinthal
(2003) considered the role of decentralization.
Levinthal and March (1993) suggested a number
of diverse tactics for encouraging change, in-
cluding leveraging employees who have failed
to thrive within the existing order or explicitly
manipulating risk preferences in the organiza-
tion. These ideas for promoting exploration have
been useful but also have nontrivial drawbacks,
such as the substantial structural changes re-
quired to implement new operating units or the
loss of still valuable tacit knowledge through
turnover. Moreover, these and other ideas for
promoting exploration often have been built on
a foundation of general or abstract theoretical
reasoning, leaving the underlying mechanisms
underspecified. All of these issues, as well as
the inherent complexity of the topic, have
helped to keep exploration at the forefront of
debates and study within the organizational re-
search community (for recent commentaries see
Fang & Levinthal, 2009; Kim & Rhee, 2009; Raisch
& Birkinshaw, 2008).
Both theory and intuition suggest that meth-
ods for promoting exploration and change
should facilitate attention, energy, and action in
the domain of alternative routines and capabil-
ities. Without attention being channeled to al-
ternative futures, new paths are not likely to be
considered (e.g., D’Aveni & MacMillan, 1990;
Drazin & Sandelands, 1992; Starbuck, 1983).
Without energy and enthusiasm for major
change, challenges to the status quo are un-
likely (e.g., Beer, Eisenstat, & Spector, 1990).
Without coordinated action, trial-and-error ex-
perimentation is less likely to yield meaningful
results (e.g., Huber, 1991; Sitkin et al., 1994). The
attention-based view of the firm (e.g., Ocasio,
1997), research into organizational change and
adaptation (e.g., Barnett & Pratt, 2000; Kotter,
2008), and studies of organizational learning
and design (e.g., Argyris, 1985) directly highlight
the importance of these cognitive, affective, and
behavioral mechanisms, respectively.
One method for exploration that might insti-
gate the mechanisms discussed above is the use
of seemingly impossible organizational goals—
commonly referred to as stretch goals. Because
they are extreme, stretch goals have been ar-
gued to serve as jolting events that disrupt com-
placency and promote new ways of thinking and
acting (e.g., Hamel & Prahalad, 1993; Rousseau,
1997). In effect, the imposition of such extreme
goals can be similar to an autogenic (i.e., inten-
tional, internally generated) crisis meant to spur
change (e.g., Barnett & Pratt, 2000; D’Aveni &
MacMillan, 1990). By forcing a substantial eleva-
tion in collective aspirations, stretch goals can
shift attention to possible new futures and per-
haps spark increased energy in the organiza-
tion. They thus can prompt exploratory learning
through experimentation, innovation, broad
search, or playfulness as organizational actors
seek new or varied approaches to reach the tar-
get. Stretch goals also can enhance tangible
performance outcomes as gaps between aspira-
tion and current performance elicit and guide
effort and persistence (Cyert & March, 1963).
Reflecting on both performance and explora-
tion, Rousseau put it this way: “[Stretch goals]
motivate high performance by mandating cre-
ativity and assumption-breaking thinking”
(1997: 528). Winter said the following in the con-
text of stretch goals and organizations develop-
ing new capabilities: “It is not a secret that high
aspirations can often contribute to high achieve-
ment” (2000: 990). These sentiments are echoed
in the business press. Steve Kerr, former Chief
Learning Officer at General Electric and Gold-
man Sachs, illustrated the popular motive for,
and the method of, stretch goals:
If done right, a stretch target...gets your people
to perform in ways they never imagined possible.
It’s a goal that, by definition, you don’t know how
to reach. You might, for instance, ask people to
cut costs by half or reduce product-development
time from years to months...[in order to] find
dramatically new ways of doing business (Sher-
man, 1995: 231).
Pursuing goals that are seemingly impossible
might stimulate exploratory learning specifi-
cally because radically new approaches are re-
quired. Southwest Airlines and Toyota provide
examples. After being forced to sell part of its
fleet early in its history, Southwest Airlines set a
goal of ten-minute turnaround times at airport
gates in an attempt to use its few remaining
planes more efficiently. Although officials with
the U.S. Federal Aviation Administration, Boe-
ing, and competing airlines believed the goal to
2011 545Sitkin, See, Miller, Lawless, and Carton
be unachievable (as did many Southwest em-
ployees), the seemingly impossible ten-minute
turnarounds were ultimately accomplished by
employing an approach (drawn from race car pit
crews) that was radically new and unfamiliar to
the airline industry (Freiberg & Freiberg, 1996).
Likewise, some have argued that at Toyota the
seemingly impossible goal of 100 percent near-
term improvement in fuel efficiency (relative to
prevailing standards) played a key role in the
development of hybrid vehicle technology (Takeu-
chi, Osono, & Shimizu, 2008). Beyond these two
anecdotal illustrations, researchers have sug-
gested that the use of stretch goals remains fairly
common in practice (for examples see Collins &
Porras, 1994; Takeuchi et al., 2008; Thompson,
Hochwarter, & Mathys, 1997).
Goals and aspirations in general have long
played an important role in organization the-
ory (e.g., Cyert & March, 1963), and stretch
goals in particular have generated interest
among the business press and the various
scholars noted earlier. Yet pushing the bound-
aries of goal attainability raises organiza-
tional implications that require deeper analy-
sis. In this article we integrate the literature
on organizational goals with research on
learning to examine the role of seemingly im-
possible goals in facilitating exploratory
learning while promoting, or at least not sac-
rificing, performance. Specifically, we con-
sider a number of fundamental questions at
the organizational level of analysis: What are
the mechanisms through which this class of
goals might promote exploratory learning and
organizational performance? What are the
risks to such extreme goals that could nega-
tively affect the organization’s capacity to per-
form and to learn? Do stretch goals increase
learning or performance in some circum-
stances but decrease them in others? Do orga-
nizations that could benefit the most from
stretch goals exhibit the greatest propensity to
pursue them?
In gaining an understanding of why organiza-
tions would use seemingly impossible goals
and how their use influences exploratory learn-
ing and performance, we address an important
theoretical gap at the intersection of research on
organizational goals and organizational learn-
ing processes. In particular, we contribute new
insights on how the use of extreme goals might
relate to exploring new and innovative practices
(e.g., Levinthal & March, 1993; March, 1991; Rah-
mandad, 2008; Uotila, Maula, Keil, & Zahra,
2009), organizational risk taking (e.g., Singh,
1986; Sitkin & Pablo, 1992), learning under am-
biguous feedback (March & Olsen, 1976; Weick,
1979, 1995), and dynamic capability develop-
ment (e.g., Agarwal & Helfat, 2009; Capron &
Mitchell, 2009; Winter, 2000). Our work reveals
ways that the extremity of stretch goals might
challenge core assumptions about the relation-
ships among aspirations, learning, and firm per-
formance (e.g., Ethiraj & Levinthal, 2009; Cyert &
March, 1963; Greve, 1998; Lant, 1992; Lant & Sha-
pira, 2008; Mezias, 1988). We suggest that as
goals become extreme, there are complex yet
predictable organizational effects that are likely
to be negative except under a limited set of
specifiable circumstances. Moreover, we con-
tribute to scholarly thinking on organizational
change and adaptation by examining why orga-
nizations would be drawn to using stretch goals
as intentional, internally generated jolts or crises
(e.g., Barnett & Pratt, 2000; D’Aveni & MacMillan,
1990), as well as the conditions under which such
jolts might successfully or unsuccessfully trigger
discontinuous advances in learning (e.g., Beer et
al, 1990; Meyer, 1982; Romanelli & Tushman, 1994).
Our theoretical analysis also advances the under-
standing of the little-known effects of unattain-
able goals (e.g., Garland, 1982, 1983; Locke, 1982,
2004; Rousseau, 1997) by examining the underly-
ing mechanisms through which such goals can
lead to collective outcomes.
In the following section we specify our con-
ceptual space by providing a definition of
stretch goals. We then examine the underlying
cognitive, affective, and behavioral mecha-
nisms through which stretch goals might posi-
tively or negatively influence organizational
learning and performance outcomes. Building di-
rectly on this discussion, we formulate pro-
positions around recent performance and slack
resources as the key contingency factors deter-
mining when stretch goals will facilitate versus
disrupt learning and performance. We follow with
propositions concerning how these same contin-
gency factors also determine the likelihood that
an organization will be drawn to using stretch
goals. As part of our closing discussion, we recon-
sider reported stretch goal success stories in light
of our analysis and highlight important contexts
for future empirical inquiry.
546 JulyAcademy of Management Review
STRETCH GOALS DEFINED
Consistent with an early stage of conceptual
development, stretch goals have not been pre-
cisely defined, and the term has not been used
consistently within or across previous commen-
taries. Even so, earlier use of the term does pro-
vide guidance in formulating a definition. Draw-
ing on prior descriptions (e.g., Collins & Porras,
1994; Hamel & Prahalad, 1993; Rousseau, 1997;
Sherman, 1995), we define a stretch goal as an
organizational goal with an objective probabil-
ity of attainment that may be unknown but is
seemingly impossible given current capabilities
(i.e., current practices, skills, and knowledge).
Because we define stretch goals in terms of an
unknown yet seemingly impossible (i.e., 0 per-
cent) probability of attainment, we depart mark-
edly from the focus in organizational behavior
research on challenging goals, which have a
nonzero (typically, 10 percent) probability of at-
tainment (Locke & Latham, 1990). We do not de-
part, however, from the usual focus on outcome-
oriented performance goals as opposed to
process-oriented learning goals (e.g., Seijts &
Latham, 2005; Winters & Latham, 1996). Setting a
performance goal entails specifying a tangible
outcome to be reached (usually a quantifiable
level of performance), such as a specific reduc-
tion in turnaround times at airport gates, a per-
centage increase in fuel efficiency of vehicles, a
reduction in cycle time in a production process,
or an increase in sales from new products. Once
that performance goal is set, the entity charged
with pursuing it must devise strategies to reach
the targeted outcome. Although learning can re-
sult as a by-product of dealing with the de-
mands of meeting a performance goal, it is im-
portant to emphasize that stretch goals are still
articulated by the organization in terms of a
specific level of performance or output. In con-
trast, setting a learning goal that does not make
explicit a specific outcome to be reached (but,
rather, articulates the acquisition of procedural
knowledge as the end in itself) would not qual-
ify as a stretch goal under our definition.
Our characterization of stretch goals high-
lights that they differ from ordinary difficult
goals in two important respects: (1) extreme dif-
ficulty—an extremely high level of difficulty
that renders the goal seemingly impossible
given current situational characteristics and re-
sources—and (2) extreme novelty—there are no
known paths for achieving the goal given cur-
rent capabilities (i.e., current practices, skills,
and knowledge). Although these dimensions im-
ply each other, extreme difficulty and novelty
stress different aspects of the stretch goal con-
struct (the specified performance outcome and
knowledge of the means to reach it, respec-
tively) and also directly relate to the two differ-
ent core outcomes of interest in this article (or-
ganizational performance and organizational
learning, respectively). Thus, below we elabo-
rate on the dimensions separately in order to
facilitate systematic theorizing about distinct
stretch goal effects.
Extreme Difficulty
Stretch goals involve extreme or radical ex-
pectations. Even if the stretch goal involves en-
hancing a process already in place (e.g., the
elapsed time between an order and delivery of a
product to the customer), the desired process
improvement extends beyond what is possible
with current capabilities. Returning to the
Southwest Airlines example, the goal of a ten-
minute turnaround certainly involved a familiar
task (efficient turnarounds at airports), but the
target was dramatically beyond the company’s
then-current performance limits, as well as the
industry average and range of industry prac-
tices. Regardless of the method Southwest Air-
lines deployed to try to reach the stretch target,
attainment would at best be extraordinarily dif-
ficult and was perceived to be impossible.
We note that a goal need not be universally
(or eternally) impossible in order to qualify as a
“stretch” for an organization in a given context.
Although it is likely that seemingly impossible
goals for one organization are also seemingly
impossible for most other organizations in the
industry at the time, there could be exceptions.
Overall, the determination of extreme difficulty
is context specific.
Extreme Novelty
A second aspect of stretch goals is the lack of
a discernible path to attainment. When an orga-
nization lacks the skills, knowledge, or practices
to attain a stretch goal and does not have knowl-
edge of any feasible approaches, it is effectively
forced to search outside of its normal routines
and knowledge to see if any ways to achieve the
2011 547Sitkin, See, Miller, Lawless, and Carton
goal exist or can be created. At issue are the
particular circumstances of the organization
charged with pursuing the goal. To continue
with the Southwest Airlines illustration, the goal
of a ten-minute turnaround could only be
achieved by learning to employ a radically new
approach. There were no guiding templates to
use within the organization or even within the
airline industry. In other words, the path to
achievement was unimaginable at the time the
goal was set, and, thus, novel means were re-
quired to achieve the goal.
STRETCH GOALS AS FACILITATORS AND
DISRUPTORS OF ORGANIZATIONAL
LEARNING AND PERFORMANCE
There is as yet no explicit theory of the poten-
tial effects of seemingly impossible goals on
exploratory learning and organizational perfor-
mance. Indeed, macrolevel goals are often in-
voked in the organizational literature, but their
unique effects have rarely been examined, and
unattainable goals remain outside nearly all of
the available scholarly work. Much of the pub-
lished work focused directly on organizational
stretch goals has been restricted to commentar-
ies or applied case studies (Collins & Porras,
1994, 1996; Golovin, 1997; Hamel & Prahalad,
1993; Hughes, 2001; Kerr & Landauer, 2004; Rous-
seau, 1997; Sherman, 1995; Takeuchi et al., 2008;
Thompson et al., 1997). With few exceptions (e.g.,
Hughes, 2001; Kerr & Landauer, 2004; Sherman,
1995), these authors have focused solely on the
presumed benefits of seemingly impossible
goals, and their work has remained general,
rarely proposing specific causal mechanisms.
Notwithstanding these limitations, we have
been able to draw on work in organizational
theory and cognition to analyze how stretch goal
usage can influence learning and performance
outcomes through a variety of specific mecha-
nisms that we sort as cognitive, affective, or
behavioral (as summarized in Figure 1). Our
analysis surfaces both potential facilitative and
disruptive stretch goal effects. We then propose
a set of contingency factors that determine
whether stretch goals will have positive or neg-
ative effects on learning and performance.
In line with our central purpose and with prior
work, we conceptualize learning as exploration
that yields meaningful insights regarding new
practices and capabilities (e.g., March, 1991). We
conceptualize performance in terms of an orga-
nization’s tangible outcomes along such dimen-
sions as productivity, product or service quality,
profitability, growth, and market share (e.g., see
Hitt, 1988, and Quinn & Rohrbaugh, 1983).
Facilitative Effects of Stretch Goals on
Exploratory Learning and Performance
Facilitative effects via cognition. Attention is
a well-recognized mechanism of influence on
organizational learning and performance out-
comes (Cyert & March, 1963; Ocasio, 1997; Sut-
cliffe, 1994). Because stretch goals involve ex-
treme redefinitions of what an organization is
capable of being or achieving, they can capture,
shift, and refocus attention. According to Rous-
seau, “Where performance expectations are el-
evated well beyond the limits of past experi-
ence” and “where previously successful
frameworks are questioned, revised, or dis-
carded, prior experience is often a poor guide for
stretch-goal achievement . . . [and this] shifts the
performers’ attention away from old routines
and assumptions toward novel and creative ap-
proaches” (1997: 529). Stretch goals present an
information-processing challenge (Galbraith,
1973) because the organization needs to find
new sources and types of information and also
new ways to process that information. A positive
reaction to this challenge would be for the orga-
nization to become heedful (Weick, 1995; Weick,
Sutcliffe, & Obstfeld, 2005) or vigilant (Janis &
Mann, 1977) in proactively scanning and assess-
ing the situation. The organization could thus
become more open to new information from a
variety of sources (Huber, 1991; O’Reilly, 1982;
Sutcliffe, 1994) and question the validity of old
assumptions, old information, and old frame-
works (Meyer, 1982; Rousseau, 1997). These con-
ditions can facilitate learning processes.
Because stretch goals move an organization
into uncharted waters, they naturally require
flexible thinking about revisable alternative
strategies for goal attainment (March, 1991;
March & Olsen, 1976). Thus, seemingly impossi-
ble goals can elicit a more open, reflective, and
opportunity-oriented focus that is beneficial for
performance (Sitkin, 1992). By allowing the orga-
nization to more freely tap previously underuti-
lized sources of information and insight, the jolt
of stretch goals can cause an organization to
more avidly attend to and consider novel paths
548 JulyAcademy of Management Review
for pursuing the stretch target (March, 1991). As
part of this response, capabilities could be care-
fully reevaluated for their potential to be recom-
bined in novel ways (e.g., Henderson & Clark,
1990), which would focus attention productively
on controllable internal resources and would
have positive consequences for performance
(Beer et al., 1990; Lant & Shapira, 2008; Levinthal
& March, 1981).
Facilitative effects via affect. Seemingly im-
possible goals can facilitate organizational
learning and performance by positively influ-
encing the collective emotion and initiative in-
fused into the organization (Adler & Obstfeld,
2007). This is not to suggest that organizations
feel emotions but, rather, to recognize that sig-
nificant opportunities or threats can have a col-
lective impact that goes beyond individual
members’ affective responses through conta-
gion processes (Barsade, 2002; Barsade & Gib-
son, 2007; Bartel & Saavedra, 2000).
Because stretch goals involve such high lev-
els of ambition directed toward novel and unfa-
miliar opportunities, they can generate energy
and greater initiative to learn by evoking a
range of positive collective reactions, such as
optimism, urgency, enthusiasm, curiosity, and
playfulness (March, 1976, 1991). When U.S. Pres-
ident John Kennedy announced in 1961 the goal
of landing a man on the moon within a decade,
FIGURE 1
Mechanisms Through Which Stretch Goals Can Influence
Organizational Learning and Performance
Facilitation
Disruption
Learning
Cognitive
Vigilance (heedfulness/mindfulness)
Systematic processing of new information
Openness
Affective
Enthusiasm, energy
Optimism
Sense of urgency
Curiosity, playfulness
Behavioral
Trial-and-error cycles
Broad search for new sources and
discontinuous advances
Performance
Cognitive
Focus on internal/controllable factors
Opportunity interpretations
Attention on usable new information
sources and analyses
Affective
Initiative to improve
High resilience to negative feedback
Behavioral
Effort and persistence
Effective strategy selection
Cognitive
Hypervigilance
Inability to process new information
Affective
Fear
Helplessness
Aversion to change
Defensiveness
Behavioral
Chaotic change
Insufficient familiarity for interpreting
feedback
Cognitive
Focus on external/uncontrollable factors
Threat interpretations
Attention on quick fixes
Affective
Low commitment to goal
Low resilience to negative feedback
Behavioral
Threat rigidity
Impaired coordination
Resource diversion resulting in loss of
beneficial routines
2011 549Sitkin, See, Miller, Lawless, and Carton
he introduced a target that excited those he led,
even though at the time they had no idea how to
achieve the goal, or even if its achievement was
possible. More generally, stretch goals can stim-
ulate exploration by highlighting a potentially
better and more exciting future (cf. Shamir,
House, & Arthur, 1993). By creating a sense of
urgency to take on new challenges and to move
toward new understandings, stretch goals can
impose a “crisis” that stimulates the initiative
within or across the organization to undertake
experimentation and learning (Barnett & Pratt,
2000; Baumard & Starbuck, 2005; D’Aveni & Mac-
Millan, 1990; Kim, 1998). In other words, the cou-
pling of positive affective drivers (e.g., enthusi-
asm, energy) with modest stress-related drivers
(e.g., urgency) can provide the spark and collec-
tive initiative to explore and learn (Argyris &
Scho¨n, 1978; Kotter, 2008).
The extreme difficulty of attaining stretch goals
should also elevate aspirations (Rousseau, 1997),
which is critical for ensuring that organizations
strive to increase performance. Organizational the-
ory suggests that aspirations well above existing
performance levels create a problem to be solved
and increase the initiative and desire to find a solu-
tion (Cyert & March, 1963; Greve, 1998; Lant, 1992;
Levinthal & March, 1981). In Greve’s work (1998), for
example, aspirations well above existing perfor-
mance led to enhanced motivation to improve per-
formance. Strategic planning research also sug-
gests that plans involving goals positively affect the
desire to enhance performance, because strategic
goal setting gives direction to the firm and promotes
adaptive thinking (e.g., Miller & Cardinal, 1994). The
literature on charismatic leadership, visionary lead-
ership, and transformational leadership further sug-
gests that the establishment of targets beyond cur-
rent capabilities builds collective enthusiasm and
resilience (Bass & Riggio, 2005; Dvir, Eden, Avolio, &
Shamir, 2002; Nanus, 1992; Shamir et al., 1993).
Facilitative effects via behavior. Since there is
no known path to achieving a stretch goal, put-
ting such a goal in place may generate actions
directed toward exploring and learning new
practices. When compared with other condi-
tions, the extreme demands of stretch goals
could stimulate broader and more active search
for ideas and solutions (e.g., Baum & Dahlin,
2007; Fang & Levinthal, 2009; Mezias, 1988).
Stretch goals could also propel the search for
more radical, discontinuous advances (Cyert &
March, 1963; Raisch & Birkinshaw, 2008), involv-
ing actions such as making contacts with unfa-
miliar sources of ideas, imitating innovative
techniques (e.g., Sitkin et al., 1994), or undertak-
ing trial-and-error learning (see Ingram & Baum,
1997, and Levitt & March, 1988). Moreover, by
loosening old restraints and providing focus
and energy, stretch goals may allow for trial-
and-error learning to be undertaken with faster
cycle times (Argote, 1999; Argyris, 1985; March,
1991). In effect, stretch goals can prompt search
and experimentation behaviors traditionally as-
sociated with learning.
Stretch goals can also instigate actions that
have positive effects on performance. Once the
organization has identified and focused on a
stretch target, prior research suggests that its
use of specific and measurable (as opposed to
vague) goals can lead to increases in organiza-
tional performance outcomes via greater collec-
tive effort, persistence, and the development of
coherent action strategies for attaining the tar-
get (e.g., Chesney & Locke, 1991; Cyert & March,
1963; Smith, Locke, & Barry, 1990). For example,
Chesney and Locke (1991) found that specifically
articulated goals influenced the development of
business strategies that increased simulated
firm performance in an experiential strategic
management exercise. Moreover, research on
top management teams has connected upper-
echelon agreement on the goals of the firm to
financial performance (e.g., Colbert, Kristof-
Brown, Bradley, & Barrick, 2008; Dess, 1987). Mov-
ing from the use of attainable goals to the case
of stretch goals, to the extent that top manage-
ment agreement on a stretch goal signals a
greater sense of specificity and unified purpose,
more effective pathways and strategies for ap-
proaching the goal could lead to higher perfor-
mance. Essentially, when a stretch goal is artic-
ulated as achieving a specific outcome, parallel
or independent strategies can be more easily
developed and coordinated as the beacon-like
stretch target directs and channels action to-
ward a singular end point.
Disruptive Effects of Stretch Goals on
Exploratory Learning and Performance
Disruptive effects via cognition. In contrast
to the positive dynamics of vigilance or mind-
fulness discussed above (Janis & Mann, 1977;
Weick, 1995), the jolt of stretch goals could
conceivably elicit negative attentional re-
550 JulyAcademy of Management Review
sponses that compromise information process-
ing and the capacity to learn. In the face of a
seemingly impossible problem that is not well
understood and for which there are no discrete
steps that constitute credible paths toward solu-
tion, the organization may respond to the over-
whelming situation with hypervigilance (Janis &
Mann, 1977). With such a response, the organi-
zation’s information processing becomes disor-
ganized, impulsive, and less systematic in the
consideration of alternatives. Thus, instead of
presenting a stimulating intellectual challenge
for information processing, stretch goals could
constitute an information processing “bridge too
far,” in that the organization simply lacks the
capacity to match the complexity and demands
of its situation or to incorporate new approaches
or inputs that could lead to learning (Weick,
1979).
The lack of obvious capabilities to respond to
the demands of stretch goals can also shift at-
tention to potential quick fixes from outside
(Beer et al., 1990), even though the organization
may not have the absorptive capacity to import
these approaches (Cohen & Levinthal, 1990;
D’Aveni & MacMillan, 1990). Attending to outside
ideas also diverts attention from a more produc-
tive focus on internal resources and ideas for
change (Beer et al., 1990; Lant & Shapira, 2008).
While shifting some attention externally is gen-
erally positive for exploration, the extreme dif-
ficulty of pursuing a stretch goal can lead the
organization to focus attention too much or too
haphazardly on outside ideas (e.g., obsessive
monitoring or unsystematic benchmarking of
other firms), which would directly limit perfor-
mance as the organization directs insufficient
attention to opportunities that are most useful
given its unique history and environment (Cyert
& March, 1963).
Disruptive effects via affect. The contagion
processes that drive collective affect in organi-
zations occur regardless of whether the affective
response is positive or negative (Barsade, 2002).
While the high levels of ambition associated
with stretch goals could raise the level of posi-
tive collective affect, as discussed earlier,
stretch goals signal the need for change and,
thus, simultaneously have the potential to elicit
the negative affective responses that often ac-
company change (Barnett & Pratt, 2000). In par-
ticular, facing a goal that is seemingly impossi-
ble could instigate a negative affect contagion
whereby exploration and willingness to try new
approaches are impeded by a sense of collective
fear, helplessness, and demotivation (Sitkin,
1992). Under such conditions, any incentives to
explore induced by stretch goals would be
dwarfed by the more salient threat created by
them. A high level of negative collective affect is
generally expected to constrict the motivation to
use learning-enhancing processes and the ca-
pacity to absorb learning opportunities that may
serendipitously present themselves (Cohen &
Levinthal, 1990; Levinthal & March, 1993; Levitt &
March, 1988; Woodman, Sawyer, & Griffin, 1993).
Stretch goals can also have disruptive effects
on performance if collective commitment to the
goal becomes compromised by widely held em-
ployee perceptions that a seemingly impossible
goal is unrealistic or unworthy of pursuit. The
extremity of stretch goals can also dampen col-
lective affective responses like satisfaction and
morale, because organizational attempts to
reach the goals are likely to involve one or more
failures. Thus, less extreme goals that are diffi-
cult but still attainable are often advised (Locke
& Latham, 1994). Indeed, using goals that are
difficult enough to require great effort or persis-
tence, yet are still within reach, is consistent
with many motivational perspectives (e.g., At-
kinson, 1964; Heath, Larrick, & Wu, 1999; Locke &
Latham, 1990; Vroom, 1964). For example, Heath
et al. (1999) built on prospect theory to contend
that because a goal serves as a reference point,
initiative for working toward the goal dimin-
ishes with distance from the goal. Taken to-
gether, stretch goals have the potential to dis-
rupt performance by diminishing collective
initiative, morale, commitment, and resilience
in the face of setbacks.
Disruptive effects via behavior. By definition,
stretch goals are associated with extreme tar-
gets whereby current capabilities are not ade-
quate in any obvious way for goal attainment.
As such, actions associated with stretch goal
implementation could create too large a break
from the past, or the actions may simply lead to
too many simultaneous changes to effectively
distinguish signal from noise (March, 1976). In
either case, organizational decision makers
would be unable to learn which enacted
changes are effective and which are ineffective
or detrimental (March & Olsen, 1976). Moreover,
organizational learning is best facilitated
within at least moderately familiar territory
2011 551Sitkin, See, Miller, Lawless, and Carton
where there is a frame of reference to under-
stand causal relationships and interpret feed-
back from changes that are made (Cohen &
Levinthal, 1990; Sitkin, 1992; Weick, 1984). With-
out some degree of familiarity, organizations
lack an effective frame, and feedback from ac-
tions and change efforts is experienced as
ambiguous (cf. Levitt & March, 1988; March &
Olsen, 1976). The novel means associated with
stretch goal pursuit imply that there is little “do-
main relevance” to bring to bear on the situa-
tion, since “it is hard to be intelligent about that
which is unfamiliar” (Sitkin, 1992: 245). Thus,
conditions that could facilitate effective learn-
ing, such as controllable change in familiar ter-
ritory with interpretable feedback, are unlikely
to hold in the presence of stretch goals.
The extreme novelty of stretch goals could
generate actions that complicate organizational
performance. Because it is not clear initially
how to start working toward a seemingly impos-
sible goal, the inherent novelty and task com-
plexity involved in attaining a stretch goal can
compromise some types of organizational per-
formance (e.g., Carley & Lin, 1997; Perrow, 1979).
Moreover, an additional concern is the magni-
tude of change that would typically be required
in attempting to bridge the gap between current
capabilities and the attainment of a stretch
goal. Greater scale change can be disruptive to
performance because problems encountered
and lessons learned are often not amenable to
effective coping (Beer et al., 1990), whereas re-
duced scale of change creates more manage-
able problems with smaller performance mile-
stones (Sitkin, 1992; Weick, 1984). The prospect of
large-scale change induced by stretch goals can
also instigate a threat-rigidity response (Staw,
Sandelands, & Dutton, 1981)—an inability to act
when under threat—that can undermine perfor-
mance. Threat rigidity would be particularly
maladaptive in the context of stretch goal pur-
suit, since rigidly clinging to existing practices
cannot result in stretch goal attainment.
The extreme novelty and difficulty of attain-
ing stretch goals could also directly impair co-
ordination. Mandating the use of an organiza-
tional stretch goal can be done almost instantly,
but actual attempts at implementation demand
radical organizational change under vague
guidance. Urgent change under such ambigu-
ous circumstances can cause different organiza-
tional subunits to develop discrepant views
about causality and appropriate action (Beer et
al., 1990; Levitt & March, 1988). The resulting
plurality of “stories” ascribed to the actions and
outcomes associated with attempting to reach
the stretch goal is likely to impair coordination
among subunits that have separate purposes,
specialties, and interests (Lawrence & Lorsch,
1967; Martin, 1992). Information distribution and
integration, which are fundamental coordina-
tion elements inherent in organizational perfor-
mance (as well as learning), are likely to be
negatively affected as a result (Huber, 1991).
Finally, because stretch goals require new
routines and resources, working to attain them
could reduce (or eventually eliminate) the effec-
tive organizational exploitation of existing ca-
pabilities, practices, and investments that are
otherwise working well. Exploring new routines
is, of course, a large part of the rationale and
promise of using stretch goals. But diverting too
much or diverting for too long from existing,
well-functioning investments can undermine
overall performance (March, 1991; Perrow, 1979),
even in the best case scenario where the orga-
nization is simultaneously reaping some learn-
ing and performance returns from the stretch
pursuit. That is, while stretch goals are intended
to break problematic inertial forces, beneficial
path dependencies can also be lost if any rou-
tines that remain useful are thrown out. The jolt
that stretch goals provide can thus outstrip the
organization’s existing capabilities and
resources.
Our analysis in this section has suggested a
number of specific mechanisms by which
stretch goals could have either facilitative or
disruptive effects, as summarized in Figure 1. In
the following section we propose a contingency
model of the primary organizational factors that
ultimately predict whether stretch goals will fa-
cilitate or impede exploratory learning and
performance.
CONTINGENCY FACTORS DETERMINING
STRETCH GOAL EFFECTS ON LEARNING
AND PERFORMANCE
To consider the contingencies that influence
when organizations benefit or suffer from the
use of stretch goals, we focus on the two core
organizational factors that reflect the system’s
capacity to extract value from radical changes
or new approaches: recent performance and
552 JulyAcademy of Management Review
slack resources (Cyert & March, 1963). In terms
of the mechanisms we analyzed in the prior
section, we seek to answer the question, “How
do recent performance and level of slack re-
sources influence the balance between the fa-
cilitative and disruptive aspects of the cogni-
tive, affective, and behavioral mechanisms by
which stretch goals can influence exploratory
learning and performance?” In other words,
we propose a contingency framework to ex-
plain when stretch goals will have positive or
negative effects on learning and performance
outcomes depending on the levels of recent
performance and slack resources of the orga-
nization using such goals.
Recent Performance
Is an organization fresh from success (e.g.,
recent performance above a benchmark, such
as the organization’s own performance in a
prior period, average industry performance, or
performance of a particular competitor) better sit-
uated to leverage the potential benefits of stretch
goal use and to withstand fallout from any fail-
ure? With respect to the mechanisms summarized
in Figure 1, there are reasons to expect that stron-
ger recent performers, if they use stretch goals, are
well situated to achieve facilitative effects on both
learning and performance outcomes, whereas
weaker recent performers are situated for disrup-
tive effects from the use of stretch goals.
Recent performance is likely to drive
whether stretch goals shift organizational at-
tention in a way that is focused productively or
counterproductively. Having just experienced
success, stronger recent performers are less
likely to perceive an immediate threat; thus, if
they undertake a stretch goal, they should be
more open to new ideas and more mindful in
the scanning and processing of new informa-
tion, both of which foster learning (e.g., Levitt
& March, 1988; Weick et al., 2005). As part of
being more mindful and vigilant, stronger re-
cent performers are more likely to attend to
contextual features and organizational capa-
bilities that are internal and controllable (e.g.,
Staw et al., 1981; Sutcliffe, 1994), precisely be-
cause they have a (recent) history of deploying
those features successfully (March & Olsen,
1976). Thus, in striving to reach a stretch goal,
any routines that could be leveraged for radi-
cal performance-enhancing recombinations
would be cognitively available to, and de-
tected by, stronger recent performers.
Weaker recent performers, however, do not
have the attentional advantages afforded by
success. Because they are already in a com-
promised state owing to recent losses, if
weaker recent performers choose to pursue a
seemingly impossible goal, they are more
likely to be overwhelmed by its demands and
resort to hypervigilant, disorganized, or even
frantic information processing that is disrup-
tive to learning. Scattered attention and un-
systematic information processing are also
disruptive to performance such that weaker
recent performers may attempt to reach a
stretch goal by haphazardly or obsessively
monitoring others in the industry for exter-
nally sourced quick fixes. Such external re-
sources and practices may not pertain to in-
ternal resources (Beer et al., 1990), leverage
existing strengths (March & Olsen, 1976), or
allow for forging new paths and solutions
through recombination (Henderson & Clark,
1990).
1
Recent performance would also be expected
to influence whether the collective affective re-
sponses to stretch goals facilitate or disrupt
learning and performance. Success generates
optimism, enthusiasm, and commitment and be-
comes self-reinforcing (March & Olsen, 1976;
Weick, 1984). Thus, if strong recent performers
use stretch goals, they should be more able to
leverage optimism and energy from their recent
success toward learning solutions for goal at-
tainment and increased performance. In con-
trast, poor recent performance undermines
many of these affective mechanisms. Poor re-
cent performers attempting to reach a stretch
goal are thus more susceptible to collective re-
1
We note one situation at the far extreme of poor perfor
-
mance, where setting stretch goals is the only option for
survival. Like the “Hail Mary” pass at the end of a U.S.
football game, the pursuit of stretch goals when an organi-
zation has no other option could be normatively superior so
long as it does not hasten death. However, one could also
draw an analogy to the pursuit of a miracle cure for a
terminal disease, which introduces the notion that if setting
stretch goals consumes fungible resources that could still be
used more effectively in other pursuits (e.g., employees de-
voting time to find other employment or more resources
available to pay creditors), then the use of stretch goals even
for survival may not always be the superior option to a quick
and relatively painless organizational death.
2011 553Sitkin, See, Miller, Lawless, and Carton
sponses of fear or defensiveness that would ob-
struct the readiness to try new things and learn
from them (Argyris, 1985; Sitkin & Pablo, 1992), as
well as hamper the initiative and commitment
needed to effectively pursue the performance
opportunities offered by a stretch goal (Baumard
& Starbuck, 2005).
Finally, the actions taken in the attempts to
reach a stretch target would conceivably be very
different as a function of an organization’s re-
cent performance and would therefore bring
about different learning and performance out-
comes. To the extent that success breeds the
persistent utilization of the routines and prac-
tices that led to that success (Audia, Locke, &
Smith, 2000; March & Olsen, 1976; Weick, 1984),
strong recent performance might initially lead
the organization down the erroneous path of try-
ing to reach a stretch goal only by repeating
actions undertaken in the past. However, once it
determines that such an approach is not suffi-
cient for reaching a stretch target, a stronger
recent performer, lacking an existing threat,
could respond to the crisis imposed by stretch
goals with greater flexibility (Barnett & Pratt,
2000), such as by devising new strategies to
meet the target and undertaking more effortful
search activities, which are actions that can
yield both learning and performance benefits.
Poor recent performance, however, can com-
promise the capacity to undertake systematic
and controlled experimentation, thus leaving or-
ganizational actors to approach a stretch goal
by instituting more chaotic changes that will not
provide the clear feedback needed for complete
learning. Moreover, recent performance prob-
lems signal that an organization is already un-
der threat. It may even be the case that the
stretch goal itself is related to the performance
problems. Thus, encountering a stretch goal
when there is existing pressure and where it is
not immediately clear how to approach the goal
could evoke a dysfunctional threat-rigidity re-
sponse (Barnett & Pratt, 2000; Staw et al., 1981).
Overall, stronger recent performers using
stretch goals are better situated to experience
facilitative effects on learning and performance,
whereas weaker recent performers using stretch
goals are situated for disruptive effects.
Proposition 1: For organizations with
strong (weak) recent performance, the
use of stretch goals will yield positive
(negative) effects on learning and
performance.
Slack Resources
The presence of financial or other resources
that have not been committed or deployed in the
system (Bourgeois, 1981) and are available for
the discretionary use of management (Nativi-
dad, 2009) creates a buffer that scholars have
conceptualized as unabsorbed slack. How might
greater unabsorbed slack resources affect the
capacity for organizations to reap successful
outcomes when pursuing the seemingly impos-
sible? Existing research suggests that greater
slack resources protect against many of the dis-
ruptive mechanisms listed in Figure 1 and
thereby help to facilitate positive effects on both
exploratory learning and performance for orga-
nizations using stretch goals.
Slack serves a practical role in that finding
exciting opportunities and identifying and cul-
tivating internal capabilities to reach a seem-
ingly impossible goal will typically demand the
availability of people, money, time, and other
resources. As a result, greater slack imbues an
organization that opts to use stretch goals with
certain cognitive advantages. By providing the
time and access to the resources necessary to
discover positive potential outcomes and attain-
ment paths, slack allows for more openness to
new information and vigilance in the processing
of that information, which is beneficial for
learning.
Moreover, the presence of slack resources
should shift attention in a way that could be
beneficial for performance (Ferrier, 2001; Nohria
& Gulati, 1996; Young, Smith, & Grimm, 1996). We
argue that, for an organization that is pursuing a
stretch goal, having sufficient slack resources
creates a situation in which the stretch goal is
more likely to be interpreted as an opportunity
to generate and sift through new ideas that are
potentially usable based on internal existing
capabilities. In contrast, limited slack would ob-
struct attention to possibly innovative (yet not
obvious) leveraging of current capabilities,
since detecting novel recombinations takes time
and effort that would be less available.
Having slack also enables stretch goals to
facilitate learning and performance by serving
as both a literal and psychological buffer
against the potentially negative collective affec-
554 JulyAcademy of Management Review
tive responses to seemingly impossible goals.
Because stretch goals involve the prospect of
extreme change without an obvious method for
goal attainment, collective responses of fear
and helplessness may ensue if there are insuffi-
cient available resources to bring to bear on the
situation. Greater slack reduces the pressure of
obtaining resources necessary for trying to reach
a seemingly impossible goal, and, thus, the pur-
suit of stretch goals can be met with more playful-
ness, curiosity, and enthusiasm, which are condu-
cive to learning (Cyert & March, 1963; March, 1976).
An organization opting to use a stretch goal when
it has greater slack should also experience affec-
tive responses that aid in performance improve-
ments. Stretch goal pursuit would typically in-
volve failures and complications, at least in the
early stages of implementation, and having ade-
quate (or more than adequate) resources should
make collective commitment more resilient when
those obstacles surface (Young et al., 1996). A lack
of tangible slack resources to credibly attempt
stretch goal attainment, however, could easily
lower morale and resilience needed to sustain
initiative.
In addition, organizations with greater slack
can test more varied actions and survive fail-
ures, which underresourced competitors are less
capable of doing (e.g., having a capital reserve
or back orders on existing products can help an
organization survive a large R&D effort that
fails). Using an organizational stretch goal to
impose a crisis is precarious, since such inten-
tionally generated crises meant to spur change
“usually overwhelm organizations and their
members’ emotional, cognitive and behavioral
capacities” and can result in dysfunctional ri-
gidity (Barnett & Pratt, 2000: 75). However, orga-
nizations are more likely to avoid rigidity and
instead respond to the imposed crisis with flex-
ibility to the extent that they have sufficient time
and encouragement for knowledge generation
(Barnett & Pratt, 2000). Having slack resources
thus permits an organization using stretch goals
to encourage knowledge generation and to more
feasibly and successfully engage in actions that
can bring about learning from the goal, such as
search that is extensive both in breadth and
duration (Sitkin, 1992). Moreover, when excess
slack resources are available, parallel initia-
tives for stretch goal attainment can be pursued
in different units (Brown & Eisenhardt, 1998;
March, 1991; Weick, 1984), allowing for the sys-
tematic and controlled experimentation vital to
learning (Campbell, 1969). When slack is un-
available, however, learning is likely to be ham-
pered, because a lack of resources constrains
the capacity to undertake careful trial-and-error
activities and obtain useful feedback (Cyert &
March, 1963; Singh, 1986).
Finally, whereas slack resource availability
allows organizations to take on new stretch tar-
gets without having to abandon what is already
working well, low slack requires organizations
pursuing stretch goals to divert resources away
from other areas, which if carried out too exten-
sively or for too long might eventually result in the
loss of beneficial path dependencies and decline
in overall performance. Organizations pursuing
stretch goals with insufficient slack are also likely
to experience impaired coordination, because co-
ordinating actions across units on how to address
radical change requires effort and time, a problem
that is exacerbated as the internal task environ-
ment becomes more complex, interdependent,
and urgent (Perrow, 1979). Taken together, organi-
zations using stretch goals with greater slack re-
sources are better situated to experience facilita-
tive effects on learning and performance, whereas
organizations without slack are situated for dis-
ruptive effects if they use stretch goals.
Proposition 2: For organizations with
high (low) slack resources, the use
of stretch goals will yield positive
(negative) effects on learning and
performance.
DETERMINANTS OF STRETCH GOAL PURSUIT
As we argued above, levels of recent perfor-
mance and slack resources determine whether
an organization is positioned to experience fa-
cilitative or disruptive effects of stretch goals on
exploratory learning and performance. But how
do these same organizational factors influence
whether an organization will actually use
stretch goals in the first place? In this section we
examine how recent performance and slack rep-
resent two distinct motives for pursuing any rad-
ical tool or technique: because the organization
must (e.g., in response to recent performance
problems) or because the organization can (i.e.,
availability of slack resources).
2011 555Sitkin, See, Miller, Lawless, and Carton
Recent Performance
We argued above that recent organizational
success (performance above a benchmark) sig-
nals a greater capacity to reap beneficial out-
comes from using stretch goals, but whether or-
ganizations with stronger recent performance
will actually be drawn to using such goals is a
separate question. Undertaking a radical tool
like a stretch goal is likely to be driven in part by
organizational sensitivity to risk and a propen-
sity to accept new challenges, which are af-
fected by levels of recent success. Prior research
suggests that success can breed a conservative
disposition toward risk in organizations (e.g.,
Levitt & March, 1988; Sitkin & Pablo, 1992). There
is an observed tendency for strongly performing
organizations to fall into a success or compe-
tency trap, in that success reinforces habits and
leads to more exploitation of current skills and
practices and less exploration of new capabili-
ties (Lant, Milliken, & Batra, 1992; Levitt & March,
1988; Maidique & Zirger, 1985). For example,
while consistent success leads to more focus
within proven routines, Weick (1984), March and
Olsen (1976), and Sitkin (1992) argue that it also
results in less expansive search activities and a
reduced willingness to utilize less established
skills in pursuing riskier, innovative paths. Like-
wise, prospect theory (Kahneman & Tversky, 1979),
which characterizes the behavior of both individ-
uals and organizations (e.g., Mezias, 1988; Singh,
1986), implies risk aversion in the domain of gains
such that when an organization has been perform-
ing well, it tends to continue its current strategy
and course of action rather than try new or risky
approaches like stretch goals.
In contrast, an organization experiencing re-
cent performance below a benchmark tends to
interpret its present situation as a loss relative
to the benchmark. Under such conditions, the
organization is more likely to undertake risky
actions or even to try radically new methods
with uncertain prospects for success
2
(e.g.,
Levinthal & March, 1993; Singh, 1986; Sitkin &
Pablo, 1992). Stretch goals may therefore appear
more frequently in organizations that are driven
to “go for broke” (Singh, 1986; Sitkin & Pablo,
1992: 27) after experiencing noteworthy poor per-
formance (called “the failure trap” by Levinthal
& March, 1993: 105). Fiegenbaum (1990), Wise-
man and Catanach (1997), and Shoham and
Fiegenbaum (2002), for example, found that
poorly performing organizations were more
likely to exhibit risky action relative to orga-
nizations above the industry average in per-
formance. Simon, Houghton, and Savelli (2003)
and Miller and Chen (2004) found that organi-
zations with disappointing performance un-
dertook riskier projects. Lee (1997) found that
organizations unable to match their own past
performance exhibited risk seeking relative to
those exceeding their own past performance.
All of this suggests that stretch goals would be
less likely to be used by successful performers
than by unsuccessful ones.
Proposition 3: Stronger recent perfor-
mance is associated with a lower like-
lihood that an organization will use
stretch goals.
Slack Resources
The ready availability of excess uncommitted
resources should position an organization to
reap positive effects on learning and perfor-
mance should it choose to use stretch goals, as
we argued above. Although slack resources al-
low for experimentation with radical tools such
as stretch goals (e.g., Cyert & March, 1963;
Nohria & Gulati, 1996), an organization with
slack resources is probably unlikely to actually
use such goals, because slack functions as an
inertia- and complacency-fostering buffer be-
tween the organization and the environment
(e.g., Sitkin, 1992), rather than as a force for the
creation of an enriching, exploration-enhancing
milieu. Indeed, empirical studies have shown
that the presence of unabsorbed slack inhibits
risk taking and adaptiveness (e.g., Kraatz & Za-
jac, 2001; Maidique & Zirger, 1985).
2
It is important to emphasize that recent performance is
the focus of our argument. Over a longer time horizon, per-
formance can cause aspirations to change. Performance that
has been consistently below an industry average or some
other reference point can drive down aspirations, resulting
in a decreased propensity to undertake risks designed for
performance improvement (Lant, 1992; Mezias, Chen, & Mur-
phy, 2002). Similarly, work on threat rigidity (Staw et al., 1981)
and permanently failing organizations (Meyer & Zucker,
1989) highlights that some organizations with extreme levels
of poor performance may avoid escalating risky behavior
because of an inability to respond (e.g., threat rigidity) or an
ability to buffer (e.g., permanent failure).
556 JulyAcademy of Management Review
We surmise that “free” resources (i.e., slack)
typically are not used by organizations to ex-
plore more freely; instead, slack seems to reduce
the felt pressure for organizations to be respon-
sive. Thus, we expect that having greater slack
results in less motivation to engage in actions
that involve substantial adaptation or change in
routines. In terms of the behavioral theory of the
firm (Cyert & March, 1963), we posit that organi-
zations will not typically engage in expansive
slack-driven search, even in the presence of suf-
ficient slack, but, rather, will engage in at most
incremental search and local adaptation, which
will preclude attraction to the use of radical
initiatives like stretch goals.
Proposition 4: Greater slack is associ-
ated with a lower likelihood that an
organization will use stretch goals.
The Paradox of Stretch Goals
Figure 2 summarizes our propositions con-
cerning how different combinations of slack and
recent performance influence the expected va-
lence (positive versus negative) of stretch goal
effects on learning and performance (Proposi-
tions 1 and 2), as well as the likelihood organi-
zations will actually use stretch goals (Proposi-
tions 3 and 4). The figure reveals that there is a
misalignment between the organizations we
predict are most likely to reap learning and per-
formance benefits from stretch goals and the
organizations most likely to pursue such goals.
In cell 2, for example, an organization has both
the slack resources to help take on the risks of
trying a stretch goal and the positive momentum
associated with recent performance success
(Propositions 1 and 2). However, when an orga-
nization is doing well, we suggest it will gener-
ally be averse to aggressive risky or radical
change initiatives (Propositions 3 and 4). An or-
ganization in this cell thus has the lowest rela-
tive likelihood of pursuing stretch goals, al-
though it is arguably the best situated for
facilitative learning and performance effects. It
is understandable that such a munificent cir-
cumstance could obviate the perceived need to
use stretch goals, but organizations in such a
situation would be advised to fight inertia and
occasionally go against their inclination to
avoid stretch goals because they have the req-
uisite resources and resilience (in terms of cog-
nitive, affective, and behavioral capacity) to
benefit from such goals.
In cell 3, where recent performance and slack
are both low, Propositions 3 and 4 would suggest
that stretch initiatives are most likely to be un-
dertaken, particularly as a way to reverse past
FIGURE 2
The Paradox of Stretch Goals
High
Effect of use: Neutral to
disruptive
Likelihood of use: Low
Cell 1
Effect of use: Most
facilitative
Likelihood of use: Lowest
Cell 2
Slack resources
HighLow
Recent
performance
Low
Cell 3 Cell 4
Effect of use: Most
disruptive
Likelihood of use: Highest
Effect of use: Neutral to
facilitative
Likelihood of use: High
2011 557Sitkin, See, Miller, Lawless, and Carton
failures or as a last-ditch effort for survival. De-
spite the motivational, performance-driven se-
duction of stretch goals when recent perfor-
mance and slack are both low, organizations in
this cell are positioned to experience primarily
disruptive effects on learning and performance
because they do not have the cognitive or affec-
tive advantages of recent success (Proposition 1)
or the buffer around experimental action that
slack provides (Proposition 2). Counter to what
we predict will be the inclination of such orga-
nizations, they should avoid stretch goals and
should instead pursue “small wins” (Weick,
1984) to try to accumulate resources and resil-
ience. Or, at most, such organizations could try a
“small losses” strategy (Sitkin, 1992) that allows
for building experience in a way that costs less
and requires less resilience for survival.
Figure 2 also reveals that for two combina-
tions of slack and recent performance (cells 1
and 4), the likelihood of using stretch goals is
reasonably aligned with the expected positive
or negative valence of effects. In cell 1, organi-
zations with strong recent performance and low
slack should have a relatively low propensity to
pursue stretch goals (as compared to cells 3 or 4).
Recalling Proposition 3, organizations with very
strong recent performance may become mired in
competency traps and tend to avoid risky
change. These organizations simply do not have
a pressing need for stretch goals in the near
term. Although Proposition 4 suggests that less
slack tends to be associated with a higher pro-
pensity to pursue stretch goals, we expect that
this tendency is tempered significantly by per-
formance-driven conservatism. Because of the
powerful effects of recency on judgment (e.g.,
Bjork & Whitten, 1974; Hogarth & Einhorn, 1992),
we surmise that recent performance will be a
stronger factor than slack when it comes to what
drives an organization to act, and, thus, organi-
zations with strong recent performance will ex-
hibit a relatively low likelihood to pursue
stretch goals.
3
Organizations in this cell should,
in fact, follow their strategic inclination to avoid
using stretch goals. Although strong recent per-
formance would provide some advantages in
leveraging the positive potential of stretch goals
(Proposition 1), limited unabsorbed slack re-
sources act as a significant constraint that
would contribute to primarily disruptive (or at
best neutral) effects of stretch pursuit on learn-
ing and performance (Proposition 2).
In cell 4, where the level of slack resources is
high but recent performance is weak, organiza-
tions will exhibit a relatively high likelihood of
pursuing stretch goals (compared to cells 1 or 2).
For organizations in this cell, the pursuit of
stretch initiatives is driven by the desire to re-
coup recent performance losses (Proposition 3),
without the tempering effect of (slack) resource
constraints. Although higher levels of slack
could contribute to complacency and dampen
enthusiasm for radical change (Proposition 4),
we once again expect that the power of re-
cency (e.g., Bjork & Whitten, 1974; Hogarth &
Einhorn, 1992) is likely to motivate organiza-
tional decision makers to emphasize recent
poor performance, even over successful (but
far less salient) longer-term past performance.
Organizations in this cell also have some ad-
vantages that should protect them from disrup-
tive stretch goal effects on learning and perfor-
mance. Greater slack resources provide buffers
against short-run performance problems and
make the organization more resilient in the face
of the extreme demands of stretch goals, and the
ongoing munificence of the internal environ-
ment makes large-scale, risky projects more fea-
sible to undertake (Proposition 2). Overall, when
reacting to recent performance losses and ade-
quately resourced with slack, organizations
are reasonably likely to use stretch goals and
are also positioned to experience some facilita-
tive (or at least neutral) effects on learning and
performance.
Our analysis reveals a paradox: the organiza-
tions most likely to benefit from stretch goals are
least likely to use them, and the organizations
least likely to benefit from them are the most likely
to use them (i.e., cells 2 and 3 in Figure 2). This
pattern suggests that it is really only under quite
limited conditions that organizations will be
safely positioned to experience positive learning
and performance outcomes from pursuing stretch
targets—namely, organizations with both high
slack resources and high recent performance (cell
2 in Figure 2). Yet few organizations can realisti-
cally be expected to fall into that category. In fact,
we speculate that most organizations carry low
levels of unabsorbed slack (cells 1 or 3), which by
3
Recency effects (e.g., Bjork & Whitten, 1974; Hogarth &
Einhorn, 1992) in psychology refer to a cognitive tendency
where recent stimuli or events are more salient and, thus, are
given disproportionate weight in judgment and decisions.
558 JulyAcademy of Management Review
our analysis would suggest that stretch goals usu-
ally will have disruptive, or at best neutral, effects
on learning and performance for the typical
organization.
DISCUSSION
Drawing from a variety of theoretical perspec-
tives, our primary purpose in this article is to ad-
vance the understanding of exploratory learning
and adaptation by systematically investigating
the causes and effects of pursuing seemingly im-
possible organizational goals—stretch goals. In
this section we review our conclusions and exam-
ine the contributions our work makes to extant
theory and research in several areas of inquiry.
We also consider the reasons behind the common
belief that stretch goals are simple and widely
successful when careful analysis suggests a more
complicated picture. Finally, we identify research
opportunities that extend beyond the scope of the
present investigation and highlight implications
for managerial practice.
Opening the Theoretical Black Box of
Seemingly Impossible Goals
Goals and aspirations play an important role
in organizational theory (e.g., Cyert & March,
1963). Yet scholars have placed little emphasis
on understanding the specific underlying pro-
cesses through which macrolevel goals, partic-
ularly unattainable goals, can influence organi-
zational outcomes. Thus, our theoretical
investigation of how stretch goals function and
affect organizational outcomes began with a
thorough consideration of the cognitive, affec-
tive, and behavioral mechanisms by which
seemingly impossible goals can influence ex-
ploratory learning and organizational perfor-
mance (summarized in Figure 1). Going beyond
prior thinking on organizational stretch goals,
which has not systematically considered mech-
anisms and has focused largely on presumed
positive effects, we examined the potential for
seemingly impossible goals to both facilitate
and disrupt learning and performance. We then
proposed that whether facilitative or disruptive
effects ensue is contingent on two core organi-
zational factors: recent performance and slack
resources (Propositions 1 and 2). We also posited
that these same two factors determine the like-
lihood that organizations will be drawn to using
stretch goals (Propositions 3 and 4).
The conclusion suggested by the aggregated
analysis of our four propositions, as revealed in
Figure 2, is the unfortunate tendency for the
wrong organizations to be most drawn to using
stretch goals. Furthermore, whereas weak organi-
zations might pursue stretch goals out of desper-
ation and make their dire circumstances worse,
those with the capabilities to truly benefit from
stretch goals typically fail to do so because the
same characteristics that make them well posi-
tioned to benefit from stretch goals also limit their
inclination to actually pursue them. This situation
is what we call “the paradox of stretch goals.”
Our theory building contributes interdisci-
plinary insights at the intersection of the litera-
ture on organizational goals, on learning, and
on adaptation by investigating the means by
which extreme goals can prompt exploration
(e.g., Rahmandad, 2008; Uotila et al., 2009) and
dynamic capability development (e.g., Agarwal
& Helfat, 2009; Capron & Mitchell, 2009; Winter,
2000). As summarized in Figure 1, our analysis
indicates that stretch goals can capture atten-
tion and facilitate openness to questioning the
validity of old assumptions, old information,
and old frameworks. Stretch goals can also
prompt behaviors traditionally associated with
learning, such as broad search, experimenta-
tion, and trial and error. Yet, at the same time,
some of the most critical conditions for effective
learning to occur (such as more experience, con-
trollable change, and interpretable feedback) do
not automatically hold in the case of stretch
goals, and, thus, organizations are unlikely to
learn from them unless they have the slack re-
sources to repeatedly and systematically exper-
iment and withstand failures.
The requisite resilience required to effectively
pursue stretch goals is also aided by strong recent
performance. These ideas provide a basis for
deeper analysis and clarity around the processes
and conditions needed for organizations to learn
effectively under ambiguity (March & Olsen, 1976;
Weick, 1979, 1995). Although we build on the be-
havioral theory of the firm (Cyert & March, 1963) in
suggesting that slack resources can positively en-
able organizations to benefit from using stretch
goals (Proposition 2), our predictions diverge from
the behavioral theory of the firm when we posit
that organizations with these capabilities are un-
likely to actually use innovation methods that are
as radical and risky as stretch goals (Proposition
4). That is, we diverge because we expect that
2011 559Sitkin, See, Miller, Lawless, and Carton
having greater unabsorbed slack, while enabling,
results in less motivation to actually engage in
actions that involve substantial adaptation, risk,
or change in routines.
In considering the reasons why organizations
might be drawn to use stretch goals, our analy-
sis speaks to the literature on organizational
change and adaptation to internal and external
jolts (e.g., Barnett & Pratt, 2000; Beer et al., 1990;
D’Aveni & MacMillan, 1990; Meyer, 1982). We ar-
gue that stretch goals can be viewed as auto-
genic crises meant to spur innovation, change,
learning, and increases in performance (e.g.,
Barnett & Pratt, 2000; D’Aveni & MacMillan,
1990). Our theoretical analysis of the causes and
effects of using seemingly impossible goals
generates additional insight into how organiza-
tions more or less effectively learn from both
internal and environmental stimuli (e.g., Sut-
cliffe, 1994), as well as the conditions that give
rise to punctuated organizational change pro-
cesses (Romanelli & Tushman, 1994).
Finally, our investigation advances our under-
standing of the effects of unattainable goals
(e.g., Garland, 1982, 1983; Locke, 1982, 2004; Rous-
seau, 1997) at a collective level by systemati-
cally surfacing specific mechanisms through
which such goals have organizational out-
comes. As such, our analysis contributes to the
literature on organizational goals (e.g., Cyert &
March, 1963; Ethiraj & Levinthal, 2009; Lant, 1992;
Lant & Shapira, 2008) by revealing how stretch
goals can challenge important scholarly as-
sumptions regarding the relationship between
aspirations and firm performance. We argue
that stretch goals create aspiration-performance
gaps that are too extreme to reliably lead to
organizational performance increases, except
for the rare organizations that have sufficient
slack resources and strong recent performance.
The Persistent Perception That Stretch Goals
Consistently Lead to Success
Because the scholarly research we draw from
suggests that the effects of seemingly impossi-
ble goals are complex and contingent, we need
to ask why so many authors (mostly, but not
exclusively, practice-focused authors) argue
that stretch goals are an unmitigated organiza-
tional success story. Numerous practitioner-
focused writings assert that stretch goals reli-
ably lead to positive performance results (e.g.,
Collins & Porras, 1994; Hamel, 1998; Hamel &
Prahalad, 1993), including reports concerning
3M, CSX, Motorola, General Electric, Union Pa-
cific, Boeing, Mead, and Toyota (Takeuchi et al.,
2008; Thompson et al., 1997; Tully, 1994). Such
highly visible successes make salient the per-
ception of universal stretch goal success, as il-
lustrated in the following effusive endorsement
from Jack Welch, former CEO of General Electric
(where the term stretch may have originated):
We have what we call stretch targets....Forex-
ample, we spent 105 years in this company and
we never had double digit operating margins. We
said in 1991 we want 15 and we put it in our
annual report. We told everybody. 9.6 or 9.5 was
our best. We’ll do 14 in 1994, and prices have been
going down in the global market. And we’ll do 15
next year. We never did more than 5 inventory
turns and we said we’ll do 10. We had no idea
how we would get to 10....The big line I use
today is that budgets enervate and stretch ener-
gizes. It’s real (Bartlett, 1999).
There are several reasons why stretch goals may
be persistently perceived and portrayed as more
beneficial for learning and performance than we
propose they actually are. Our theoretical analysis
suggests one particular reason why this mispercep-
tion may arise and persist: most famous stretch goal
success stories come from organizations in which
management set very ambitious performance goals
to prepare for a radical change while the organiza-
tion had good resource endowments (e.g., IBM in the
1960s, General Electric in the 1980s, and Toyota in
the 1990s; see also Bartlett & Wozny, 1999; Hamel,
1998; Sherman, 1995; Takeuchi et al., 2008; Thompson
et al., 1997). That is, proponents of stretch goals may
have overgeneralized based on evidence from orga-
nizations that had substantial slack resources and,
in many cases, also had strong recent performance
(i.e., cell 2 in Figure 2). By our analysis, these orga-
nizations were unusually well positioned to benefit
from stretch goals (Propositions 1 and 2). But these
organizations were probably outliers that somehow
avoided the dominant pattern of inertia that Propo-
sitions 3 and 4 would predict for organizations hav-
ing both a large amount of slack and strong recent
performance. Thus, we argue that the generalized
basis for the success of stretch goals has been mis-
construed and has consequently led to an oversim-
plified and inflated perception of their value.
Aside from focusing on high-performing organiza-
tions with substantial resources, the pervasive view
of stretch goals as beneficial could be due to success
stories based on incomplete learning cycles, such as
560 JulyAcademy of Management Review
when apparent consequences are actually unre-
lated to organizational action and lead to what
March and Olsen (1976) call “superstitious” experi-
ential learning (see also Huber, 1991). Similarly,
some organizational decision makers may come to
unjustified or overconfident conclusions based on
few data points, a sample size problem where faulty
learning can occur from low-frequency events in
which performance effects are often confounded
with random error or other fallacious data (March,
Sproull, & Tamuz, 1991). Moreover, failure myopia
(Levinthal & March, 1993) may be an issue, whereby
organizational learning is based on oversampling of
successes and undersampling of failures because
successful practitioner examples, salient and com-
pelling as they are, may be but a small, unrepresen-
tative drop in a large ocean of organizational initia-
tives (see also Denrell, 2003). Base-rate neglect can
also make highly risky exploration (e.g., stretch
goals) appear to be a good idea, with an unrealisti-
cally high expectation of success. In addition, orga-
nizations that pursue stretch goals, particularly
those that do so as a last-ditch effort when they are
already failing, might subsequently fail entirely and
disappear, thus biasing the observable sample of
users toward success. Observers trying to judge the
effectiveness of stretch goals are therefore exposed
to a systematically biased sample with an overrep-
resentation of successes.
All of these issues lead us to conclude that inves-
tigations based on a few select cases, including
many that appear in practice-focused publications,
are unlikely to present a balanced picture of stretch
goal processes and effects. By sidestepping glib ex-
hortations and focusing instead on a generative,
theoretically grounded analysis of mechanisms and
contingency factors, we hope we have provided
some useful guidelines for managers to use in tai-
loring their practices to conditions most likely to
lead to positive outcomes.
Foundations for Future Research
We conclude with a discussion of possible em-
pirical settings and extensions for research on
stretch goals, as well as a brief commentary on
two implications of stretch goal pursuit that are
beyond the scope of the current investigation but
highlight important areas for future inquiry.
Empirical tests of stretch goal effects. To set
the stage for future empirical work, we have
proposed a testable theory suggesting that
seemingly impossible organizational goals ex-
hibit a predictable pattern of positive and neg-
ative effects contingent on recent performance
and slack resources, and these contingency fac-
tors also determine when organizations are
more or less likely to use such goals. Our prop-
ositions could be examined using several em-
pirical approaches. For example, initial empiri-
cal studies of stretch goal effects could take the
form of qualitative theory testing, whereby mul-
tiple firms with different attributes are studied
in depth. Or a study using one very large orga-
nization could examine the use and effective-
ness of project proposals within the organiza-
tion (e.g., high-risk research initiatives or new
venture proposals). Alternatively, a simulation
study would provide the control to vary organi-
zational conditions and measure baseline levels
of learning and performance before and after
the imposition of a stretch goal.
In addition, quantitative investigations could
be undertaken to study both the effects and like-
lihood of pursuing stretch goals using a strati-
fied random sample based on archival indica-
tors of slack and recent performance. Within the
sample, evidence of stretch goal usage could be
measured by conducting a survey of senior man-
agers in organizations, or it could be extracted
from annual reports or letters to shareholders. In
any of these approaches, individual organiza-
tions in the sample could be coded for the timing
of stretch goal use and the type or nature of the
stretch goal (e.g., a goal to increase market
share, reduce manufacturing process time, re-
duce error rate) in order to better compare ef-
fects across organizations.
Beyond testing the organization-level effects we
have proposed in this article, future research
could focus more specifically on the potential un-
derlying processes and mechanisms summarized
in Figure 1. That is, researchers could study unat-
tainable goals in terms of their impact on the
cognitive, affective, and behavioral mechanisms
through which stretch goals can influence organi-
zational outcomes. To further enrich and extend
the theory proposed here, future studies could also
examine possible sequences, interactions, and
path dependencies among the mechanisms. It
would be interesting as well to explore the impli-
cations of variation in the degree of stretch goal
implementation, such as when unattainable goals
are used only by segments of an organization ver-
sus the entire organization.
2011 561Sitkin, See, Miller, Lawless, and Carton
In our theorizing we have discussed organiza-
tion-level effects on learning and performance,
but within the organization stretch goals might
have differential effects on various parts of the
system. Additionally, because the use of stretch
goals implies a willingness to undertake high
risks to pursue high rewards, variation in incen-
tives within organizations for the pursuit of stretch
goals could be examined to see how this affects
both use and effectiveness of such goals. All of
these questions highlight fruitful ways in which
the ideas we have proposed can be further ex-
tended and refined if future research were to focus
on the ripple effects inside organizations that use
stretch goals, rather than focusing only on the
aggregated organization-level outcomes that
have been our primary focus.
Process-oriented stretch goals. Scholarly and
practitioner accounts of stretch goals suggest
that such goals are typically used in the explicit
hope of directly improving performance, and po-
tentially also spurring exploratory learning in
the course of achieving the extreme target. Con-
sistent with the use of stretch goals in practice
and also the majority of goal research, we have
defined and analyzed stretch goals as outcome-
oriented goals that make explicit a specific,
quantifiable level of desired performance or out-
put (e.g., decrease errors by a particular percent-
age). Note that this precludes goals that are
articulated solely in terms of enhancing the
learning process as an end in itself (e.g., where
the goal is to formulate five ways of learning
how to decrease errors). This raises the question
of whether learning-focused organizations (i.e.,
considering the use of stretch goals solely to
learn) really need to use stretch goals (which are
performance outcome goals) as a vehicle, or
whether they could gain the facilitative benefits
of stretch goals and limit their disruptive liabil-
ities by using process-oriented learning goals
instead (see, for example, Seijts & Latham, 2005).
It is ultimately an empirical question, and future
work could explore whether our analysis holds
when one moves beyond outcome-oriented per-
formance goals to include seemingly impossible
goals that are explicitly focused on the acquisi-
tion of procedural knowledge at the organiza-
tion level of analysis.
Ethical implications of stretch goal pursuit.
While we have focused on the organization level
of analysis, we wish to point out some findings
at the individual level pertaining to the unin-
tended negative consequences of goal setting,
with a particular focus on how goals can induce
unethical behavior (Barsky, 2008; Jensen, 2003;
Locke, 2004; Ordonez, Schweitzer, Galinsky, &
Bazerman, 2009; Schweitzer, Ordonez, & Douma,
2004). Although goals can pose an especially
dangerous temptation to breach ethics when as-
sociated with performance measurement or
compensation systems by creating incentives to
misrepresent performance (Jensen, 2003; Locke,
2004; Schweitzer et al., 2004), empirical work pro-
vides direct evidence that even nonmonetary
rewards for meeting a goal (such as internal
satisfaction) are sufficient to influence unethical
behavior (Schweitzer et al., 2004).
Moving from merely difficult goals at the in-
dividual level to the case of stretch goals at the
organization level, the ethical implications
could be amplified. The seeming impossibility
of achieving stretch goals using ordinary means
could easily slip into the seductiveness of using
extraordinary means, such as falsifying records.
Managing the unintended ethical perils of
seemingly impossible goals, as well as other
individual-level disruptive effects that are be-
yond the scope of the present investigation, is
worthy of further examination.
CONCLUSION
We investigated the organizational pursuit of
seemingly impossible goals—commonly known
as stretch goals—and the effects of such goals
on exploratory learning and increased perfor-
mance. Despite widespread interest in the idea
of stretch goals and assertions about their sys-
tematic benefits, there are many reasons to in-
terpret the normative stories of stretch goal suc-
cess as resulting from misunderstandings of the
actual functioning and effects of this enticing
technique. Although our analysis suggests that
there are very specific and limited conditions
under which some organizations should pursue
seemingly impossible goals, we recognize that
organizations may continue to look for success
in all the wrong places. Thus, a challenge for
organizational researchers is to more clearly
identify control mechanisms, learning strate-
gies, and decision aids that organizations can
use to achieve greater effectiveness in overcom-
ing the paradox of stretch goals.
562 JulyAcademy of Management Review
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Sim B. Sitkin (sim.sitkin@duke.edu) is professor of management, Staudenmeyer Re-
search Fellow, and faculty director of the Fuqua/Coach K Center on Leadership and
Ethics, Fuqua School of Business, Duke University. He received his Ph.D. from Stanford
University. His research concerns the influence of leadership and control systems on
organizational and individual change, innovation, trust, learning, risk taking, and
accountability.
Kelly E. See (ksee@stern.nyu.edu) is assistant professor of management and organi-
zations in the Stern School of Business at New York University. She received her Ph.D.
in management from Duke University. Her research focuses on the role of learning in
judgment under uncertainty and on how factors such as fairness, power, and goals
affect organizational decision processes.
C. Chet Miller (chet.miller@bauer.uh.edu) is the Bauer Professor of Organizational
Studies at the C. T. Bauer College of Business, University of Houston. He earned his
Ph.D. from the University of Texas. His research focuses on upper-echelon leaders,
strategic decision processes, and management systems.
Michael W. Lawless (lawless@umd.edu) is Tyser Teaching Fellow at the R. H. Smith
School of Business, University of Maryland. He earned his Ph.D. from the Anderson
Graduate School of Management, UCLA. His research takes an evolutionary perspec-
tive on technology and innovation management, strategy implementation, and entre-
preneurship and new venture financing.
Andrew M. Carton (amc42@duke.edu) will be an assistant professor of management
and organization in the Smeal College of Business at The Pennsylvania State Uni-
versity beginning in Fall 2011. He received his Ph.D. from Duke University’s Fuqua
School of Business. His research focuses on how leaders adapt to the increasingly
complex nature of goal systems and intergroup relations in organizations.
566 JulyAcademy of Management Review
... Literature on goal setting is still inconclusive about how stretch goals impact performance. There is no consensus on whether they are motivating and contribute to organizational performance or demotivating and cause excessive risk-taking (Ahmadi et al., 2021;Chen et al., 2021;Gary et al., 2017;Kerr & LePelley, 2013;Markovitz, 2012;Pina e Cunha et al., 2017;Sitkin et al., 2011). For this reason, there is a need to explore goal setting further at the organizational level (Shinkle, 2012;Shinkle et al., 2019). ...
... The management literature defines stretch goals as challenging to attain or 'seemingly impossible' goals in traditional organizations (Sitkin et al., 2011). Organizational theorists have proposed that stretch goals, because they are extreme, may disrupt common ways of thinking and acting and trigger change (Sitkin et al., 2011). ...
... The management literature defines stretch goals as challenging to attain or 'seemingly impossible' goals in traditional organizations (Sitkin et al., 2011). Organizational theorists have proposed that stretch goals, because they are extreme, may disrupt common ways of thinking and acting and trigger change (Sitkin et al., 2011). Gaps between current performance and aspiration levels stimulate searching for methods to reach targets. ...
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... The COVID-19 pandemic further increased de-globalization (see Antras, 2020), creating additional barriers for international talent movement, and greatly increased digitalization, including a massive shift to teleworking (see Eurofund, 2020). The pandemic necessitated CHQs arranging timely responses to business disruptions, including swift reactions to subsidiary initiatives (see Verbeke and Yan, 2021), managing massive resource redeployment, and, in situations of very high uncertainty, assisting subsidiaries in dealing with "stretch goals" that, according to Sitkin et al., (2011), differ from ordinary challenging goals in two important respects: extreme difficulty and extreme novelty. ...
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... Conversely, authentic paradoxes might be concealed by the label chosen to represent them, for instance, in organizations in which the pursuit of multiple extreme, 'stretch' goals (Sitkin et al., 2011) can induce organizational elites to impose absurd demands that are impossible to comply with on their staff. If these paradoxes are construed as manageable challenges by elites but as trade-offs by those who had to materially accommodate the demands, it creates a saying-doing gap, a recipe for disaster . ...
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... Apart from the major problems brought about by the pandemic (e.g., maintaining and, if necessary, rebuilding relations with customers, suppliers, investors, national governments, and other stakeholders), MNCs had to deal with another issue: adjusting management compensation systems in foreign subsidiaries to stimulate subsidiary managers to reach "stretch goals". According to Sitkin et al. (2011), "stretch goals" are organizational goals that are extremely difficult and novel and thus have an objective probability of attainment that may be unknown. ...
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... Interdependence also could play an important moderating role for diversity and theorized outcomes, as interactions likely become more predictable when senior leaders work together more regularly (see, e.g., Wei & Wu, 2013). Also, high amounts of slack and recent performance might play roles, as they can create benevolent internal environments where interactions are less stress laden (Sitkin, See, Miller, Lawless, & Carton, 2011). These moderating variables and their possible roles were discussed earlier in our review. ...
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