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rAcademy of Management Annals
2018, Vol. 12, No. 1, 208–251.
https://doi.org/10.5465/annals.2016.0018
RENEWING RESEARCH ON PROBLEMISTIC SEARCH—
A REVIEW AND RESEARCH AGENDA
HART E. POSEN
1
University of Wisconsin-Madison
THOMAS KEIL
University of Zurich
SANGYUN KIM
University of Wisconsin-Madison
FELIX D. MEISSNER
University of Zurich
Problemistic search theory, with its roots in the Carnegie School tradition, describes
a behaviorally plausible process by which firms learn from performance feedback. A
firm’s recognition of performance below aspirations leads to search for a solution to the
problem, resulting in change intended to restore performance to the aspired level. The
concept of problemistic search has diffused broadly in the management literature—it is
a central theoretical concept in a broad variety of organizational theories and an im-
portant explanation of a wide variety of organizational behaviors and outcomes. We
review the literature and argue that the development of the theory has not kept pace
with the breadth of the unfolding literature. We identify six critical issues with extant
research that can be traced back to a continued (over)reliance on the initial conceptu-
alization of problemistic search. To address these issues and to revitalize research, we
propose a research agenda premised on a more central role for cognition in the theory
and the need for greater emphasis on a process perspective of problemistic search.
INTRODUCTION
Problemistic search theory, with its roots in the
work of Herbert Simon, Richard Cyert, and James
March, describes a behaviorally plausible process by
which firms learn from performance feedback. A
firm’s recognition of performance below its aspira-
tion, which is the level of future performance
deemed acceptable, leads to a process of search to
discover a solution to the problem, resulting in be-
havioral change intended to restore performance to
the aspired level. Consider, for example, sales at
a large national retailer that fail to meet the firm’s
aspiration. Consequently, the firm engages in
search by sequentially testing alternatives to cur-
rent sales activities, e.g., increasing advertising,
redecorating stores, or expanding online presence. If
increasing advertising is successful, returning sales
to the desired level, then search ceases and the firm
continues advertising at the new level. In this article,
we review extant research on problemistic search,
identify gaps and shortcomings, and develop a re-
search agenda to address these gaps.
Although the concept of problemistic search has
diffused broadly in the management literature over
the past half-century, development of the theory
underlying the concept has not kept pace with the
breadth of the unfolding literature. Problemistic
search is a central theoretical concept in a broad
variety of organizational theories, and an important
explanation of a wide variety of organizational be-
haviors and outcomes, including, e.g., strategic
change and reorientation, risk-taking, organizational
adaptation, knowledge generation, organizational
learning, new resource creation, and innovation.
The authors would like to thank Phil Bromiley, Vinit Desai,
Henrich Greve, Songcui Hu, John Joseph, Ronald Klingebiel,
Pasi Kuusela, and Tom Moliterno for their insightful com-
ments on earlier drafts of this article. The authors would also
like to thank the Associate Editor, Matt Cronin, for his com-
ments and advice that substantially improved the article. All
remaining errors and omissions are the authors’own.
All authors contributed equally.
1Corresponding author.
208
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Most studies that use the theoretical apparatus of
problemistic search match quite closely to its
early conception in Cyert and March’s (1963)
seminal work, A Behavioral Theory of the Firm,
and prior developments in March and Simon
(1958). The refinements and challenges to the
conceptualization that have arisen from research
on problemistic search, as well as from adjacent
streams of work, have not been sufficiently in-
tegrated into the conceptualization of problem-
istic search. Given this lack of integration, our
theoretical understanding of problemistic search
remains incomplete and empirical progress has
been held back.
We take stock of the large literature on problem-
istic search via a review using a process-oriented
perspective. We identified an initial sample of 2440
articles that invoke problemistic search. Our primary
sample in our main analysis focuses on a subset of
233 articles, which form the backbone of the litera-
ture. Although the claim that performance below an
aspiration leads to change has become taken for
granted, our review of the empirical literature sug-
gests surprisingly mixed results.
We identify six critical issues with current research
that have hindered theoretical and empirical prog-
ress. First, problemistic search is conceptualized as
overly routinized, assuming a high degree of auto-
maticity in managerial decision-making, with a lim-
ited role for cognition. Second, problemistic search
theory focuses attention on the search for solutions
to a given problem, overlooking behaviors oriented
toward identifying the latent problem underlying
a performance shortfall. Third, empirical research
tends to conjoin distinct elements of problemistic
search (e.g., triggering search, searching,and change).
In particular, because of data constraints, empirical
research rarely examines search among potential so-
lutions, blackboxing this element of the process and
focusing on how performance below the aspiration
triggers change as an outcome that restores perfor-
mance. Fourth, in the theory, performance below an
aspiration is generally viewed as a driver of exploi-
tation of known solutions to existing problems, even
though extant theory has begun to point to the im-
portance of exploratory activities such as R&D and
risk-taking. Fifth, the key prediction of problemistic
search that performance below aspirations leads to
change (e.g., new routines, practices, policies) con-
flicts with alternative theories that predict stasis or
even reinforced behavior (e.g., threat rigidity and
escalation of commitment). Finally, problemistic
search theory focuses on a narrowly delineated
outcome, change that restores performance above the
aspiration. Yet a diverse array of research and anec-
dotal evidence suggests that search processes have
unintended outputs which, although they may
have little bearing on the focal problem, may be or-
ganizationally important and valuable.
Our review suggests that these issues can be traced
to a continued (over)reliance on the initial concep-
tualization of problemistic search and a research
approach that focuses on variance theorizing. Cyert
and March’s (1963) conceptualization reflects their
objective of providing a theoretical counterpoint
to neoclassical economic theories of that era, which
assumed unrealistically rational economic actors.
Their conceptualization was thus constrained to a
purposefully simple and highly mechanistic for-
mulation of organizational action. The research
agenda we propose is premised on a revised con-
ceptualization of problemistic search that makes
two important shifts.
First, and foremost, we believe that advancement
of the literature must be premised on a more central
role for cognition than suggested by the traditional
conceptualization of the theory. Although cognition
plays only a limited role in Cyert and March’s (1963)
formal discussion of problemistic search, March and
Simon (1958) recognize the importance of cognition
in organizational decision-making processes, and
March and Olsen (1976) highlight the role of in-
dividuals’beliefs. A cognitive perspective assumes
that behaviors are premised on beliefs, a mental
model, describing the relationship between alterna-
tive actions and outcomes. It shifts attention to
organizational information processing and shared
mental representations that may shape organiza-
tional processes, but has historically been under-
theorized in the literature on problemistic search.
Nonetheless, other research streams, also in the
Carnegie School tradition, have made important
strides by adding back a modicum of cognition to
behavioral theory. The time has come for research on
problemistic search to do the same.
Second, we believe substantial theoretical and
empirical progress could be made by taking a process
approach to problemistic search. Much of the extant
research employs a variance theory approach. It
tends to treat problemistic search as a black box,
examining the correlation between a performance
shortfall that triggers the process and the changed
outcome that restores performance, concluding the
process. A process perspective focuses attention on
how the behaviors associated with problemistic
search unfold over time, forcing scholars to open up
2018 209Posen, Keil, Kim, and Meissner
the black box and illuminate the stages of the prob-
lemistic search process. To this end, we suggest a re-
vised process architecture characterized by two
distinct search stages. Although the literature cur-
rently pays attention to solution search, we believe
that this stage is sometimes preceded by problem-
definition search. Problem-definition search is the
process of diagnosing the cause of the performance
shortfall. It likely requires a meaningful degree of
cognitive input by managers, and thus demands a
theoretical formulation underpinned by cognition.
Moreover, the outcome of problem-definition search
may act as a mental representation that guides sub-
sequent search for solutions that resolve the problem.
By examining problemistic search from a process
theory perspective and by adding back a modicum of
cognition to the theory, we raise the possibility of
a renewed and substantive research program on
problemistic search as a centrally important, com-
monly observed organizational activity. Such a pro-
gram may lead to a richer understanding of the
functioning of problemistic search and facilitate dis-
tinguishing problemistic search from other search
processes, such as slack search or institutionalized
search, which may co-occur but are expected to differ
in their characteristics. It may also shed light on how
problemistic search may function as a “master switch”
to engender a broad range of behaviors (Greve, 2003c),
both exploitative and exploratory; doing so points to
a multitude of ancillary outputs of problemistic
search that may create value for the organization.
Our article is structured as follows. In the next
section, we review the extant research on problem-
istic search. We take a process approach, summa-
rizing both theoretical developments and empirical
tests in extant research in which problemistic search
is a key theoretical mechanism. We use the literature
review to identify critical gaps in our understanding
of problemistic search. Building on this review and
assessment, we highlight key elements of a research
agenda that addresses these gaps.
EXTANT RESEARCH ON PROBLEMISTIC
SEARCH
Following the publication of A Behavioral Theory
of the Firm (Cyert & March, 1963), the concept of
problemistic search has been widely adopted and
diffused. In this section, we provide an in-depth re-
view of the literature on problemistic search, sum-
marizing theoretical developments and empirical
tests. We begin by briefly highlighting its original
conceptualization then outline the methodology
used to choose articles for inclusion in this review.
Finally, we explicate the results of the review.
To facilitate our discussion, we divide the litera-
ture into four broad areas of focus that follow an
analytical process model of problemistic search as
depicted in Figure 1: (a) triggers of problemistic
search, (b) solution search and its characteristics,
(c) behavioral consequences that are the outcomes of
problemistic search, and (d) stopping mechanisms of
problemistic search. The process model depicted in
the figure represents a linear simplification of the
model described by Cyert and March (1963). In
practice, stages of the model may be further con-
nected through feedback loops, and organizations
may cycle back and forth between stages.
Original Conceptualization
The formal conceptualization of problemistic search
in Cyert and March (1963) and March and Simon
(1958) is built on the idea that organizational decision-
making cannot be described by the selection of the
optimal course of action among a set of known alter-
natives. Rather, for boundedly rational decision-
makers and organizations, it is a process of search to
FIGURE 1
The Process of Problemistic Search
Triggering of
Problemistic Search
Solution Search
and its Characteristics
Behavioral Consequences of
Solution Search
Stopping of
Problemistic Search
Organizational change and
risk-taking are the main
behavioral consequences of
solution search.
Performance below the
aspiration acts as the trigger
of problemistic search.
Solution search is the process
of sequentially identifying
and evaluating alternative
actions that may resolve the
performance shortfall.
Problemistic search stops
once performance is
restored above aspirations.
210 JanuaryAcademy of Management Annals
identify alternative actions. Search stops when the
decision-maker encounters the first alternative that
provides satisfactory performance (Simon, 1947, 1955,
1956). Problemistic search can be understood as the
specific case where search for alternatives is triggered
when the organization encounters a problem and
ceases when a satisfactory solution is identified (Cyert
& March, 1963; March & Simon, 1958; Simon, 1955).
Cyert and March (1963: 121) argue that this process is
central to organizational decision-making. Organiza-
tions “make decisions by solving a series of problems;
each problem is solved as it arises; the organization
then waits for another problem to appear. Where de-
cisions within the firm do not naturally fall into such
a sequence, they are modified so that they will.”
Problemistic search is a simple process of learn-
ing from performance feedback. The theory assumes
that organizations and their decision-makers possess
aspirations that define the acceptable level of per-
formance (Cyert & March,1963; Frank,1935; March&
Simon, 1958). Problemistic search is triggered by
a performance shortfall relative to that aspiration.
Via search, the firm seeks to identify and to learn
about the merits of alternative solutions. The firm
sequentially engages in change to the organiza-
tion’s practices (routines, products, markets, tech-
nologies,etc.) over time, sampling alternative changes
that may attenuate the performance shortfall.
Search terminates when an alternative that restores
performance above the aspiration is identified and
implemented.
The original conceptualization of problemistic
search was constructed with simplicity in mind. In
its historical context, the simplicity of problemistic
search was a reaction to behavioral assumptions in
neoclassical economics, which scholars in the Car-
negie School viewed as unrealistic representations
of the cognitive abilities of individuals and organi-
zations (March & Simon, 1958; Simon, 1947). This
simplicity was reflected across three key features of
problemistic search. First, organizations use a sim-
ple mapping between a performance shortfall rela-
tive to an aspiration and a problem, allowing the
organization to move directly from the recognition of
a performance shortfall to solution search. A key
insight in Cyert and March (1963), in this respect,
was that an organization requires a motivation to
search, and performance below its aspiration pro-
vides this motivation. Second, organizations pursue
a simple, narrowly delineated, and unambigu-
ous objective through problemistic search to “mend
performance shortfalls”(Greve, 2003a: 687). Al-
though the existing literatures that have employed
the idea of problemistic search are diverse, they are
fairly consistent in theorizing about it. Organizations
inherently use problemistic search as a means to
engender organizational action and find solutions to
the everyday challenges they face in a satisficing
manner (Simon, 1955). Actions are evaluated on the
basis of their ability to solve the problem—resolving
the performance shortfall. Third, organizations are
simple-minded in their search behavior. Problem-
istic search is typically viewed as occurring in the
vicinity of current knowledge, practices, and exper-
tise (Cyert & March, 1963; Greve, 2003c). Only when
a solution cannot be found in the vicinity of the firm’s
existing knowledge does the organization gradually
move toward more distant search.
Methodology of Literature Review
To identify the relevant literature for this review,
we followed a structured process. We started with
a broad search on google scholar using the terms
“problemistic search Cyert March.”This search
revealed approximately 2440 results (in October
2016).2However, a large share of the articles in this
set reference problemistic search ritualistically, us-
ing the terminology without engaging with the sub-
stance of the concept, and often only contain singular
mentions of problemistic search in the form of a side
or subsidiary argument.
To ensure an appropriate scope and a consistent
coverage of the relevant literature on problemistic
search, we conducted several additional steps to de-
velop a narrower group of core articles. First, to
identify articles related to problemistic search, we
conducted five independent searches with distinct
keyword combinations: (Cyert March “problemistic
search”), (Cyert March satisfice OR satisficing), (Cyert
March aspiration OR aspirations), (Cyert March
“performance feedback”), and (Cyert March search).
Second, we restricted the search to eight leading
journals in our field (Academy of Management
Journal, Academy of Management Review, Adminis-
trative Science Quarterly, Management Science,
Organization Science, Journal of Management, Jour-
nal of Management Studies, Strategic Management
2We decided to employ Google Scholar after testing and
cross comparing Google Scholar with other search engines,
including ISI Web of Knowledge and Ebsco Business
Source Complete. Google Scholar provided greater and
more consistent search results because it matches key-
words not only on title and abstract, but also, in many
cases, the main text body.
2018 211Posen, Keil, Kim, and Meissner
Journal). Because the fifth keyword combination
(Cyert March search) produced overly broad results
even with these restrictions, we applied additional
criteria for the results from that last keyword combi-
nation. Specifically, we included an article retrieved
from searching this keyword combination only if it
either has more than 300 citation counts or was pub-
lished after 2011. This step reduced the sample size to
594. Third, after examining the remaining articles, we
excluded articles that discuss “problemistic search”
as a marginal theme, or were well off topic. In other
words, we excluded an article if, even though it in-
vokes the term “problemistic search,”the concepts
of search and performance shortfall do not play a suf-
ficiently substantive role in the theory. After execut-
ing this third step, the sample was reduced to 169
articles.
Fourth, we read the set of 169 articles to further
validate their role in the problemistic search lit-
erature. Based on our reading, we excluded 42 ar-
ticles that did not fall within the scope of our review.
For example, we excluded articles that largely fo-
cused on individual, rather than organizational,
search. By scanning the bibliographies of the 169
articles, we identified additional articles not in-
cluded in the original sample, typically because
theyareinbooksandsecondaryjournals,orare
working articles. Reading these articles led to the
inclusion of 38 additional articles. Thus, after this
stage, the sample included 165 articles on prob-
lemistic search.
Finally, as we will note in our discussion in the
subsection titled “Solution Search and its Charac-
teristics,”most of the literature on the search process
would be classified under the broader heading of
organizational search (because triggering by a prob-
lem is absent). Thus, we expanded the set of articles,
on an ad hoc basis, to include relevant studies on the
general search process. Doing so added 68 general
search studies to our sample. Taken together, our
final sample contains 233 articles, which form the
basis of the literature review.3
Triggering Mechanisms of Problemistic Search
A key domain of research on problemistic search
focuses on the mechanism that triggers search. The
explicit claim in the literature of the Carnegie School
tradition, and also common across other bodies of
management scholarship (Argyris & Sch ¨
on, 1978;
Chandler, 1962), is that “poor performance is actu-
ally necessary to catalyze the search for new prac-
tices in an organization”(Bolton, 1993: 59).
We decompose research in this domain across
three topics: aspirations as a threshold of problem-
istic search, the performance metrics of aspirations,
and the historical and social bases of aspirations. We
highlight the rather mechanistic, nearly automatic,
view of search triggered when performance falls be-
low the threshold defined by the aspiration. This
view dominates the literature on triggers of prob-
lemistic search, but the empirical evidence regard-
ing the triggering role of aspirations is surprisingly
mixed. As a result, more recent literature considers
how cognitive processes and the non-unitary nature
of organizations (internal structure and coalitions of
actors with diverging interests) bound the conditions
under which underperformance leads to search. Fi-
nally, we highlight the need to develop a richer
understanding of the cognitive processes underlying
how an organization selects a social reference group
and the way historical and social aspirations are
aggregated. Table 1 summarizes key arguments
regarding the triggering mechanisms in problem-
istic search and lists selected example studies.
Aspiration as a threshold of problemistic search.
Simon (1959) was influenced by earlier work in psy-
chology on individual level aspirations (Frank, 1935;
Katona, 1953; Lewin, Dembo, Festinger, & Sears,
1944). Building on his own work on the role of indi-
vidual aspirations in organizations (March & Simon,
1958),he argues that when “performance falls short
of the level of aspiration, search behavior (par-
ticularly search for new alternatives of action) is
induced”(Simon, 1959: 263).
This logic, at the organizational rather than indi-
vidual level of analysis, forms the basis of the argu-
ment for triggering problemistic search. Cyert and
March (1963) envision an organizational aspiration
(goal, target) that is a function of a firm’s own prior
performance, the historical aspiration, and the prior
performance of a reference group of other firms, the
social aspiration. A performance shortfall relative to
the aspiration threshold is considered “the problem”
in problemistic search. If existing behaviors are
viewed as effective, a “firm is unlikely to change
3In addition to the articles that speak directly to prob-
lemistic search and search in general, we also discuss,
where appropriate, articles that shed light on problem-
istic search, but are not in the literatures associated with
the behavioral theory of the firm. Likewise, the Agenda
portion of our article includes references to many stud-
iesthatarenotpartoftheliteratureonproblemistic
search. These studies are not included in the set of 233
articles.
212 JanuaryAcademy of Management Annals
TABLE 1
Triggering Mechanisms of Problemistic Search: Key Topics, Arguments, and Selected Example Studies
Key Topics
Arguments in the
Literature
Selected Example
Studies
Aspiration as a
threshold of
problemistic
search
Lower-than-aspiration
performance stimulates
organizational effort to
remedy the problem
Aranda, Arellano, and
Davila (2017)
Fredrickson (1985) Miller and Chen (1994)
Audia, Locke, and Smith
(2000)
Greve (1998) Park (2007)
Askin and Bothner (2016)
Greve (2008a) Rudy and Johnson (2016)
Bolton (1993)
Kim and Rhee (2017) Schillebeeckx, Chaturvedi,
George, and King (2016)
Chen and Miller (2007)
Kraatz (1998)
Schimmer and Brauer (2012)
Chuang and Baum (2003)
Lucas, Knoben, and
Meeus (2015)
McDonald and Westphal
(2003)
Firm performance comparable
with or higher than the
aspiration leads to strategic
inaction
Audia et al. (2000) Miller and Chen (1994)
Greve (1998)
Miller (1994)
Shifts of managerial attention
influence the triggering of
problemistic search
Blettner, He, Hu, and
Bettis (2015)
Greve (2008a) Ocasio (2011)
Chen and Miller (2007)
Li, Maggitti, Smith,
Tesluk, and Katila
(2013)
Plambeck and Weber (2009) [I]
Carter (1971)
Washburn and Bromiley
(2012)
Attention may shift to different
reference performance
levels regarding the same
aspiration to moderate the
triggering of problemistic
search
Audia and Greve (2006) Greve (2010) Lehman and Hahn (2012)
Blettner et al. (2015) Iyer and Miller (2008) Lehman, Hahn, Ramanujam,
and Alge (2011)Castellaneta and Zollo
(2015)
Joseph and Gaba (2015)
Miller and Chen (2004)
Desai (2008)
Joseph, Klingebiel, and
Wilson (2016) Ref and Shapira (2017)
Attention may shift from social
to historical aspirations and
vice versa to moderate the
triggering of problemistic
search
Aranda et al. (2017) Deephouse and Wiseman
(2000)Blettner et al. (2015)
Bromiley (1991)
Attention may shift across
different goals to moderate
the triggering of
problemistic search
Bakker and Shepherd
(2017)
Sullivan (2010)
Ertug and Castellucci
(2013)
Vissa, Greve, and Chen
(2010)
Ertug and Castellucci
(2015)
Gaba and Joseph (2013)
Greve (2008a)
Psychological factors (e.g.,
self-enhancement motives
and attribution) can affect
triggering of problemistic
search
Audia and Brion (2007) Bromiley and Harris
(2014)
Joseph and Gaba (2015)
Audia, Brion, and Greve
(2015) Desai (2015)
Baum, Rowley, Shipilov,
and Chuang (2005)
Hayward and Shimizu
(2006)
Jordan and Audia (2012)
Differences across subgroups,
coalitions, and units in the
firm can affect triggering of
problemistic search
Carter (1971)
Desai (2016a)
Gaba and Joseph (2013)
Dimensions of
aspirations
Financial performance has
been used as the main
measure of aspirations
Arrfelt, Wiseman, and
Hult (2013)
Chen and Miller (2007) Harris and Bromiley (2007)
Audia and Greve (2006)
Deephouse and Wiseman
(2000)
Lant, Milliken, and Batra
(1992)
Audia et al. (2000) Desai (2008) Mezias, Chen, and Murphy
(2002)Bolton (1993) Fiegenbaum (1990)
Miller and Bromiley (1990)Bromiley (1991) Gaba and Joseph (2013)
Miller and Chen (2004)Bromiley (2009) Greve (2003a)
2018 213Posen, Keil, Kim, and Meissner
TABLE 1
(Continued)
Key Topics
Arguments in the
Literature
Selected Example
Studies
Washburn and Bromiley
(2012)
Bromiley and Washburn
(2011)
Greve (2003b)
Wiseman and Bromiley
(1996)
Chen (2008)
Gubbi, Aulakh, and Ray
(2015)
Nonfinancial goals have been
used as alternative measures
of aspirations
Aranda et al. (2017) Crilly, Zollo, and Hansen
(2012)
Moliterno, Beck, Beckman,
and Meyer (2014)Bednar, Boivie, and
Prince (2012) Gaba and Bhattacharya
(2012)
Parker, Krause, and Covin
(2017)Benson, Saraph, and
Schroeder (1991) Greve (1998) Sitkin, See, Miller, Lawless,
and Carton (2011)Baum et al. (2005) Greve (2008a)
Tyler and Caner (2016)Joseph et al. (2016)
Ketchen and Palmer
(1999)
Lehman and Hahn (2012)
History of past performance
contributes to the formation
of aspirations (historical
aspirations)
Arrfelt et al. (2013) Greve (2011) Lant and Montgomery (1987)
Audia and Greve (2006) Harris and Bromiley
(2007)
Lim and McCann (2013)
Boyle and Shapira (2012)
[I] Hundley, Jacobson, and
Park (1996)
Mezias et al. (2002)
Baum et al. (2005)
Iyer and Miller (2008)
Mezias and Murphy (1998)
Chen and Miller (2007)
Kacperczyk, Beckman,
and Moliterno (2015)
Miller and Chen (2004)
Greve (1998)
Kuusela, Keil, and Maula
(2017)
Ref and Shapira (2017)
Greve (2003a)
Lant (1992)
Tuggle, Sirmon, Reutzel, and
Bierman (2010)
Greve (2008a) Tyler and Caner (2016)
Performance of other
comparable firms
contributes to the formation
of aspirations (social
aspirations)
Audia and Greve (2006) Desai (2008) Ketchen and Palmer (1999)
Bromiley and Washburn
(2011)
Greve (1995) Labianca, Fairbank,
Andrevski, and Parzen
(2009)Barnett and McKendrick
(2004)
Greve (1998)
Lim and McCann (2013)
Baum et al. (2005)
Harris and Bromiley
(2007)
Shipilov, Li, and Greve (2011)Iyer and Miller (2008)
The effect of social aspirations
depends on how reference
groups are specified
Audia et al. (2015) Kacperczyk et al. (2015) Moliterno et al. (2014)
Baum and Dahlin (2007) Labianca et al. (2009) Short and Palmer (2003)
Greve (1995)
Greve (1998)
Historical aspirations and
social aspirations may be
combined to form a single
overall aspiration level
Greve (2003b)
Mezias et al. (2002)
Historical aspirations and
social aspirations may be
separate with distinct (even
opposing) effects
Baum and Dahlin (2007) Greve (1998)
Baum et al. (2005) Kim, Finkelstein, and
Haleblian (2015)
Firms may switch between
historical aspirations and
social aspirations
depending on the level of
performance
Bromiley (1991) Wiseman and Bromiley
(1996)Deephouse and Wiseman
(2000)
Park (2007)
Washburn and Bromiley
(2012)
Notes. [I]: papers on individual or team level search.
214 JanuaryAcademy of Management Annals
them; if not, search for better rules will be stimu-
lated”(Winter, 1971: 245) as we assume firms “act in
order to enhance their degree of success in achieving
their aspirations”(Lant, 1992: 624). Performance
above the aspiration level induces the firm to main-
tain the status quo and avoid actions that might entail
a risk of reducing performance (Bromiley, Miller, &
Rau, 2001; March & Shapira, 1987).
Despite the centrality of this triggering claim, em-
pirical evidence is surprisingly mixed. In our review
sample, we tabulate the empirical results of 53 studies
that directly test the arguments on the threshold
function of aspirations. They typically use a metric of
performance relative to an aspiration as the inde-
pendent variable, and a metric of change as the de-
pendent variable (e.g., acquisitions, R&D spending).
Table 2 summarizes these results. We distinguish
among tests that examine historical or social aspira-
tions separately, as well as tests that use a combined
aspiration (aggregating social and historical into
a single aspiration). We also divide the results across
two empirical methodologies: (i) a single continuous
measure that captures performance relative to aspi-
rations and (ii) a spline specification, following
Greve (1998), allowing for distinct coefficients on
performance below- and above-aspirations. Because
some studies report multiple tests, the number of
results is greater than the number of studies.4
Consider, e.g., studies using a continuous measure
of performance (across all types of aspirations). Of
these studies, 20 report statistically significant sup-
port for the claim that performance below aspira-
tions triggers search and change, eight studies report
mixed results, five studies report a nonsignificant
coefficient, and three studies report coefficients that
are statistically significant but in the opposite di-
rection (i.e., performance below the aspiration de-
creases change). Spline studies may report tests
of the significance of the below- and/or above-
aspiration coefficient, which are reported in the ta-
ble. Of the spline method studies, 32 include both
above- and below-aspiration performance variables
in their model. These studies also suggest mixed
results. Although not reported in the table, but of
substantial importance, only 16 of these spline
studies test the difference between the below- and
above-aspiration coefficients. Of those, six report
performance below aspirations leads to more change
than performance above aspirations, consistent with
the prediction of problemistic search; two report
mixed results; and the remainder report results that
conflict with problemistic search theory.
Among these mixed results, one active area of re-
search focuses on the boundary conditions around
the claim that a performance shortfall relative to an
aspiration gives rise to search and change. We high-
light three such lines of research. The first line of
research examining boundary conditions to the
performance shortfall—search relationship comes
directly from Cyert and March (1963). They theorize
that organizations typically pursue multiple goals.
Consequently, managerial attention to these goals
may be a crucial moderator of problemistic search
(Greve, 2008a; Ocasio, 2011). Recognizing the po-
tential importance of organizational attention, sev-
eral scholars have empirically examined whether
and how a shift of attention influences the trigger-
ing of search (Blettner et al., 2015; Li et al., 2013;
Washburn & Bromiley, 2012). Attention shifts in
problemistic search can be broadly categorized into
three types: a shift to different reference performance
levels regarding the same aspiration (Audia & Greve,
2006; Blettner et al., 2015; Chen & Miller, 2007;
Desai, 2008; Greve, 2010; Iyer & Miller, 2008; Joseph
& Gaba, 2015; Lehman & Hahn, 2012; Lehman et al.,
2011; Miller & Chen, 2004; Ref & Shapira, 2017);
a shift from social to historical aspirations and vice
versa (Blettner et al., 2015; Bromiley, 1991; Deephouse &
Wiseman, 2000); and a shift across different goals
(Greve, 2008a; Vissa et al., 2010). Despite the theo-
retical importance of the issue and research efforts
invested, Blettner et al. (2015) point out further re-
search is warranted to build a more concrete un-
derstanding about the relationship between attention
and aspirations. For example, whereas some studies
(Blettner et al., 2015; Iyer & Miller, 2008; Lehman &
Hahn, 2012; Lehman et al., 2011) find support for the
attention shift model between multiple reference
points, Chen and Miller (2007) fail to find evidence of
attention shift in the context of problemistic search
and instead suggest multiple foci of attention may
coexist.
A second line of research suggests that psycho-
logical factors may also limit the extent to which
performance below an aspiration triggers search. For
instance, Jordan and Audia (2012) theorize that
managers have a self-enhancement motive, seeking
to view themselves in a positive light; managers may
retrospectively distort the gap between performance
and aspirations, reducing the likelihood that search
is triggered. The authors suggest that high levels of
4Our tabulation of empirical results is a first step in
developing a deeper understanding of the aggregate results
of these empirical tests, but it is not a full substitute for
a meta-analysis.
2018 215Posen, Keil, Kim, and Meissner
narcissism, accountability, and informational ambi-
guity can increase decision-makers’propensity to
assess performance in a self-enhancing way. Other
research in that stream focuses on the choice of the
reference group (Audia et al., 2015) or failure attri-
bution (Desai, 2015) as psychological processes that
may limit triggering search. Such psychological
processes may have particularly strong influence
when performance feedback is difficult to interpret
(Joseph & Gaba, 2015) or when the results of perfor-
mance comparison to own historical performance
and the performance of social reference groups are
not consistent (Baum et al., 2005; Bromiley & Harris,
2014).
Finally, a third line of research focuses on dif-
ferences across groups of individuals or corporate
units within an organization as a mechanism that
may inhibit triggering problemistic search, an idea
inherent to the notion of coalitions and conflict in
Cyert and March (1963). Although most research on
problemistic search assumes a unitary actor, thereby
ignoring these issues, recent studies theorize and em-
pirically demonstrate that corporate structure (Gaba &
Joseph, 2013) and multiple groups of decision-makers
with divergent interests (Desai, 2016b) influence the
triggering of problemistic search.
In sum, substantial progress linking performance
below an aspiration to subsequent problemistic
TABLE 2
Summary of Empirical Evidence on the Triggering of Problemistic Search
CONTINUOUS MEASURE SPECIFICATION
Coefficient Test of Problemistic Search Triggering Historical/Social Combined Historical Social Total Number of Results
Support of theory, statistically significant coefficient 4 7 9 20
Mixed statistical support 0 2 6 8
No support (statistically nonsignificant) 1 1 3 5
Opposing (statistically significant in opposite
direction)
0213
Number of studies 1 5 10
SPLINE SPECIFICATION: Below Aspiration
Coefficient Test of Problemistic Search Triggering Historical/Social Combined Historical Social Total Number of Results
Support of theory, statistically significant coefficient 1 11 15 27
Mixed statistical support 1 3 2 6
No support (statistically nonsignificant) 2 3 4 9
Opposing (statistically significant in opposite
direction)
16916
Number of studies 3 9 13
SPLINE SPECIFICATION: Above Aspiration
Coefficient Test of Problemistic Search Triggering Historical/Social Combined Historical Social Total Number of Results
Support of theory, statistically nonsignificant
coefficient
0 8 11 19
Support of theory, statistically significant coefficient 4 9 10 23
Mixed statistical support 0 0 3 3
Opposing (statistically significant in opposite
direction)
05611
Number of studies 4 22 30
Note: The table summarizes the results of 53 studies that directly test the threshold function of aspirations in triggering problemistic search.
The counts represent the number of studies that use the corresponding measure of aspirations. If a single study uses multiple measures (e.g.,
both a continuous measure and a spline measure), we include its results in multiple cells that correspond with the measurement specifications.
Similarly, a study may report separate results for historical aspirations, social aspirations, and a combined measure. If a study ran multiple tests
with a single measurement type and found mutually inconsistent results, we coded its results as “mixed.”Thus, there are more results than
studies. The column “total number of results”aggregates the number of similar findings across different types of aspirations whereas the row
“number of studies”counts the number of studies using a specific measure for a type of aspiration. For the spline specification above the
aspiration, both a nonsignificant coefficient and a statistically significant positive coefficient are treated as supporting the theory.
216 JanuaryAcademy of Management Annals
search has been made. Although the empirical re-
sults are somewhat mixed, the literature has begun to
make progress by examining cognitive and structural
mechanisms that might act as boundary conditions
on the triggering claim. Later in this article, we will
note that most empirical studies blackbox the search
process itself (data limitations restrict observation
to the outcome rather than the process of search),
which may also account for some of the mixed
empirical results.
Performance metrics of aspirations. Given that
aspirations are integral to triggering problemistic
search, they have been the subject of a large body of
research. In this subsection and the next, we focus
our discussion on two key dimensions of aspirations:
the performance metric on which aspirations are
based, and the construction of the reference point,
historical (own) or social (others’) performance. We
put aside the issue of aspiration adaptation because it
has received detailed coverage in two recent reviews
(Bromiley & Harris, 2014; Shinkle, 2012). Our discus-
sion highlights the myriad of potentially conflicting
bases on which aspirations may be formed and points
to the need for a richer cognitive view of aspirations.
The central feature of aspirations in the behavioral
theory of the firm is that they are backward-looking
targets, based on experience, rather than forward-
looking calculations, based on expectations (Arrfelt
et al., 2013; Greve, 2003c). Lant and Shapira (2008:
60) state that a “key assumption of the behavioral
theory of the firm is that firms adjust their behavior in
response to their experience rather than acting on
their expectations of future states of the world.”
Although aspirations are broadly conceived as
goals or targets in Cyert and March (1963), the liter-
ature on problemistic search is largely empirically
oriented; it tends to focus somewhat narrowly on
high-level financial performance as the aspiration.
Measures of profitability are perhaps the most com-
monly studied bases for performance aspirations
(Audia et al., 2000; Bromiley, 1991; Greve, 2003a,
2003b; Lant et al., 1992; Miller & Chen, 2004). Among
the sample of 53 empirical articles described in
Table 2, return on assets (Greve, 2003a; Miller &
Chen, 2004) is the most used performance metric (29
studies), whereas other studies take different profit-
ability metrics such as return on equity (five studies;
Audia & Greve, 2006; Miller & Bromiley, 1990) or
return on sales (two studies: Audia et al., 2000;
Wiseman & Bromiley, 1996) as their primary finan-
cial performance measure.
A much smaller set of studies investigates non-
financial goals. These aspirations are often more
specific than high-level financial goals (Ketchen &
Palmer, 1999), and in some cases may reside at
the unit level rather than at the firm level (Aranda
et al., 2017). Nonfinancial goals include new product
development performance (Tyler & Caner, 2016),
hospital occupancy (Ketchen & Palmer, 1999), in-
novation (Gaba & Bhattacharya, 2012), market share
(Baum et al., 2005; Greve, 1998), firm size and growth
(Greve, 2008a), team ranking or scores in sports
games (Lehman & Hahn, 2012; Molitern et al., 2014),
and product quality (Parker et al., 2017) to name only
a subset of the broad variety of goals studied.
Managers may base their aspirations on many
different goals and associated metrics. It seems likely
that at least some of the mixed empirical findings
discussed earlier may be explained by a mismatch
between the aspiration measured in a study and the
true latent aspiration employed by managers. From
a theoretical perspective, different aspiration met-
rics could lead to different levels and direction of
responses to a performance shortfall. Moreover, the
broad variety of different measures gives rise to the
possibility that managers may use the choice of goals
and associated metrics to enhance their own in-
terests (Audia & Brion, 2007). Greve (2003c: 70)
suggests that at the organizational level, the choice
of goals and metrics is a process characterized by
“precedence, politics, payoffs, and proselytizing.”
At the moment, we have little insight into how
managers choose which metrics are salient, partic-
ularly with respect to financial metrics that are rather
close substitutes. Indeed, as we highlight later, the
choice of metric may represent an important cogni-
tive component of problemistic search that is yet to
be satisfactorily addressed.
Historical and social bases of aspirations. Cyert
and March (1963: 115) identify three backward-
looking components of aspirations that additively
determine the aspiration in a given time period:
“the organization’s past goal [prior aspirations], the
organization’s past performance [historical compo-
nent], and the past performance of other ‘compara-
ble’organizations [social component].”As we point
out, empirically testing the implications of a perfor-
mance shortfall on the basis of either historical or
social aspirations for subsequent change has pro-
duced mixed support (see Table 2). The empirical
challenge is particularly acute for studies of social
aspirations as the theoretical frameworks are less
well developed (Boyle & Shapira, 2012; Moliterno
et al., 2014).
The first dimension of an aspiration is based
on historical comparison—appraising performance
2018 217Posen, Keil, Kim, and Meissner
today relative to performance in the prior period, or
the average over a set of prior periods. A firm’s own
past performance is an indicator of how well a firm
can and should do in its environment and may be
premised on any of the measures we discussed ear-
lier. Experiments by Lant (1992) and Lant and
Montgomery (1987) provide evidence that history
of past performance contributes to the formation
of aspirations. Empirical studies using organization
data also show that past performance affects the
level of aspirations (Mezias & Murphy, 1998;
Mezias et al., 2002).
Several specifications have been used to measure
historical aspirations. Some studies use the firm’s
previous period performance as the historical as-
piration level (Lim & McCann, 2013; Ref & Shapira,
2017). Other studies use the simple average of past
performances over multiple periods (Arrfelt et al.,
2013). The weighted moving average of prior his-
torical aspirations and the current or most recent
performance has been among the most frequently
used specification (Greve, 1998, 2003a; Kacperczyk
et al., 2015; Kuusela et al., 2017; Tyler & Caner,
2016).
Although evidence from empirical studies of his-
torical aspirations is typically viewed as providing
stronger support for the theory than studies based on
social aspirations (Boyle & Shapira, 2012; Ref &
Shapira, 2017), our tabulated results in Table 2 sug-
gest that this is not the case—evidence for both is
mixed. A substantial number of studies support the
claim that performance below historical aspirations
influences organizational behavior by triggering
problemistic search that leads to change (Baum et al.,
2005; Chen & Miller, 2007; Greve, 1998; Miller &
Chen, 2004). Many other studies, however, find ei-
ther a nonsignificant result (Greve, 2003b) or report
statistically significant results in the opposite di-
rection, with a performance shortfall relative to a
historical aspiration leading to decreased search or
change (Iyer & Miller, 2008).
The second dimension of an aspiration is based on
social comparison—appraising performance today
relative to that of firms in a reference group. If the
focal firm’s performance is perceived to be lower
than the performance level of other firms in the ref-
erence group, we expect the focal firm to recognize
that the performance gap is a problem and, conse-
quently, initiate problemistic search. Work on social
aspirations has a classic psychological foundation.
As Massini, Lewin, and Greve (2005) note, research
on the “level of aspiration (Lewin et al., 1944) and
social comparison theory (Festinger, 1954) suggest
that individuals use a reference group that reflects
the average performance of peers.”
Despite the theoretical appeal of the concept of
social aspirations and the rich body of research
(Baum et al., 2005; Greve, 1995; Greve, 1998; Harris &
Bromiley, 2007; Iyer & Miller, 2008; Ketchen &
Palmer, 1999), empirical studies of the link between
social aspirations and subsequent organizational
change yields mixed findings, as our results in
Table 2 suggest. Although many studies find, con-
sistent with problemistic search theory, that perfor-
mance below the social aspiration stimulates more or
riskier organizational change (Baum et al., 2005;
Harris & Bromiley, 2007; Ketchen & Palmer, 1999;
Labianca et al., 2009), others find no effect (Audia &
Greve, 2006; Desai, 2008; Lim & McCann, 2013) or an
opposite relationship (Bromiley & Washburn, 2011;
Iyer & Miller, 2008).
The mixed evidence on the role of social aspira-
tions may be a result of the differences across studies
in the assumptions, upon which reference groups are
formed (Baum & Dahlin, 2007; Labianca et al., 2009;
Short & Palmer, 2003). Many studies regard industry
membership as the defining feature of reference
groups (Greve, 2008a), with social aspirations mea-
sured by average (Baum et al., 2005) or median (Iyer
& Miller, 2008) industry performance. A more seri-
ous issue, one that goes beyond simple measure-
ment, relates to the large number of dimensions on
which a reference group might be constructed. Greve
(1998) notes a broad array of variables, beyond in-
dustry, that may be important for determining the
reference group: size, physical proximity, perfor-
mance, products, markets, and production methods
may all be relevant. Moreover, as Audia et al. (2015)
argue, by building on the psychological construct of
self-enhancement motives, managers may select ref-
erence groups in a strategic manner such that they are
able to view themselves in a favorable light. The
challenge of empirically studying social aspirations
and problemistic search may be further compounded
because firms may have multiple simultaneous ref-
erence groups (Moliterno et al., 2014), both within
and outside theorganization (Kacperczyk et al., 2015).
The challenge with specifying social aspirations is
not simply empirical, but rather, reflects a lack of
understanding of how firms form reference groups
for the social component of aspirations. Cyert and
March (1963) provide little guidance in this respect.
In our view, progress may require an in-depth con-
sideration of the cognitive processes underlying the
social construction of reference groups. Given the
limited consideration of cognition in the classical
218 JanuaryAcademy of Management Annals
formulation of problemistic search, these cognitive
processes have largely been overlooked. Yet research
outside of the behavioral theory of the firm offers
some suggestive evidence. A number of studies ex-
amine how firms identify others as rivals, worthy of
attention, and perhaps social comparison (Clark &
Montgomery, 1999; Kilduff, Elfenbein, & Staw, 2010;
Panagiotou, 2007; Porac, Thomas, & Baden-Fuller,
1989). For instance, Fiegenbaum, Hart, and Schendel
(1996) argue in their conceptual article that strategic
groups may serve as more effective comparison tar-
gets for the firms than the more general construct of
industry and as a result, firms within an industry
may have different reference groups.
The aggregation of historical and social compo-
nents of aspirations is also a domain in need of
a richer cognitive lens. Although Cyert and March
(1963: 123) formulate an additive model of historical
and social aspirations into a single aspiration, alter-
native proposals have been offered and no consensus
on the correct conceptualization and measurement
has emerged (Bromiley & Harris, 2014). Studies
attempting to explicitly incorporate both historical
and social aspirations have done so in a variety of
ways. One approach is to aggregate social and his-
torical aspirations to a single scale, for instance,
using a weighted average of the two (Greve, 2003a;
Parker et al., 2017). However, Washburn and
Bromiley (2012) question this approach based on
the empirical results in their study. Another ap-
proach is to use distinct measures for social and
historical aspirations and propose separate hypoth-
eses for them (Baum & Dahlin, 2007; Baum et al.,
2005; Greve, 1998). Other studies propose a theoret-
ical mechanism by which firms switch attention
between historical and social aspirations, suggesting
that each aspiration type is associated with a differ-
ent underlying organizational process. Such models
frequently assume that organizations use different
aspirations depending on their own performance
level (Bromiley, 1991; Deephouse & Wiseman, 2000;
Park, 2007; Washburn & Bromiley, 2012; Wiseman &
Bromiley, 1996), positing, e.g., that organizations
sequentially reallocate their attention from historical
aspirations to social aspirations as their performance
increases or vice versa. This dynamic may be im-
portant if responses to historical aspirations differ
from responses to social aspirations (Kim et al.,
2015).
In sum, the basic logic of aspirations as a trigger for
problemistic search is compelling. In practice,
however, our understanding is limited. The simple
claim that a firm’s aspirations are a function of own
historical performance and a social reference group’s
performance is undermined by the myriad of ways in
which different metrics of performance, and differ-
ent social reference groups, can be constructed and
combined. Thus, there seems to be no one simple
rule for constructing an aspiration. The resulting
ambiguity surrounding the aspiration, highlighted
recently by Greve and Gaba (2017), suggests to us that
progress will demand theorizing underpinned by
a richer cognitive model of problemistic search.
Solution Search and Its Characteristics
In their seminal work, Cyert and March (1963) ar-
gue that, given a performance shortfall, search for
a solution that restores performance is predominantly
local, conducted in the vicinity of the problem
symptom and previously adopted actions, and in-
tensified as the size of the performance shortfall
increases.
Although the literature on the characteristics of
search, as a more general theoretical construct asso-
ciated with decision-making by boundedly rational
firms, is fairly large, the literature on the search for
solutions triggered by, and oriented toward, the so-
lution of a specific problem is limited. Most research
occurs under the broader heading of organizational
search (Afuah & Tucci, 2012; Katila & Ahuja, 2002;
Levinthal, 1997; Rosenkopf & Nerkar, 2001), which
includes a range of search processes such as slack
search (Chen, 2008; Cyert & March, 1963) and in-
stitutionalized search (Chen & Miller, 2007; Greve,
2003c). These processes may have very different
characteristics than problemistic search as they are
not triggered by a problem. In this sense, research on
problemistic search has largely blackboxed the
search process itself, examining triggers and out-
comes, but not the process of search for solutions to
problems. In our discussion below, we draw in-
ference about problemistic search by drawing on
elements of this broader search literature, focusing
on the locus of search, online versus offline evalua-
tion of search, and the intensity of search.
The conclusions we draw from the literature on
search point to three important gaps in our ability
to empirically disentangle problemistic search from
its behavioral consequences, such as change and
the need to move beyond the overly restrictive con-
ceptualization of problemistic search as highly
mechanistic—an automatic process that involves
minimal cognition. First, theoretical work highlights
a variety of mechanisms, often demanding higher
level cognitive ability, which lead to search that is
2018 219Posen, Keil, Kim, and Meissner
less local and less exploitative. Second, little em-
pirical evidence exists to suggest that the evaluation
of the merits of alternative solutions identified via
search is of the low-cognition “online”form. Indeed,
there is probably good reason to believe that evalu-
ation is conducted at least partially “offline,”for in-
stance, by managers relying on their mental models.
Third, we have a limited understanding of the
drivers of search intensity, in part because prob-
lemistic search is hard to disentangle from
alternative search processes (slack and institution-
alized search) in empirical studies and the existence
of alternative theoretical mechanisms that might
also impact the intensity of search (e.g., threat rigid-
ity). Table 3 summarizes key arguments regarding
solution search and lists selected example studies.
Locus of problemistic search. Cyert and March
(1963) and March and Simon (1958) were relatively
precise in their predictions that search triggered by
a performance shortfall would be predominantly
local in nature. Jung and Lee (2016: 1729) summarize
the assumption of local search as follows: Firms start
“searching knowledge that is familiar (Fleming,
2001), or closely related to firms’existing expertise
(Katila & Ahuja, 2002), or searching for a solution
that is in the neighborhood of current expertise
(Rosenkopf & Nerkar, 2001).”For instance, March
(1994: 28) suggests that “if sales fall in Texas, then
they look for the problem and the solution in Texas.”
Likewise, a firm experiencing a new product devel-
opment rate below its aspiration level would be ex-
pected to start searching for solutions by tinkering
with R&D-related organizational practices (Tyler &
Caner, 2016). Given the theorized reliance on local
search, problemistic search has been characterized
as path-dependent (Ahuja & Katila, 2004; Cyert &
March, 1963; Miller, 1994; Rhee & Kim, 2015),
leading primarily to exploitation in the sense of in-
cremental refinement of previously adopted organi-
zational activities (March, 1991). However, as we
will discuss, recent research on search highlights the
mechanisms by which search in general, and by in-
ference, problemistic search, may be less exploit-
ative than previously thought.
Organizational search is theorized to be local
based on a number of supporting rationales. First,
local search exhibits distinct advantages relative to
more distant search (Helfat, 1994; Laursen, 2012;
Nelson & Winter, 1982). Organizations’and their
decision-makers’cognitive limitations make it diffi-
cult for the organization to become aware of, and able
to evaluate, all alternatives that may be relevant for
solving a problem (Knudsen & Levinthal, 2007;
Simon, 1978b). Second, organizations possess a lim-
ited knowledge base. Given that learning is easier in
domains where the organization holds knowledge or
at least possesses related knowledge (Knudsen &
Levinthal, 2007), search will be facilitated in the
(local) areas where the organization has current
expertise (Helfat, 1994). Third, local search may
produce better performance, at least in the short
run (Denrell & March, 2001; Taylor & Greve, 2006).
Related to the latter point, the cost of local search
may be lower than that of more distant search be-
cause the former avoids the cost of communicating
across knowledge domains (Carlile, 2002; Laursen,
2012).
Perhaps because the theoretical logic support-
ing the localness of organizational search is so com-
pelling, the empirical base of direct evidence in
support of localness is somewhat slender and mostly
outside the domain of research on problemistic
search. Laursen (2012) provides a brief review of this
work. Key studies that lend support to the domi-
nance of local search are Katila and Ahuja (2002),
Martin and Mitchell (1998), and Stuart and Podolny
(1996), all outside of the core literature of problem-
istic search. Finally, in a laboratory study examining
the nature of individual search on a rugged land-
scape, Billinger, Stieglitz, and Schumacher (2014:
93) observe “Success narrows down search to the
neighborhood of the status quo, whereas failure
promotes gradually more exploratory search.”
Local search has a number of downsides. In par-
ticular, local search is less likely to generate the vari-
ety required to solve novel problems and to generate
innovative solutions (Fleming & Sorenson, 2004;
Katila, 2002), in part, because it tends to draw upon
related knowledge in a manner that limits the extent
of recombination (Fleming, 2001). Local search may
be particularly problematic in complex environments
(characterized by rugged performance landscapes)
because possibilities for substantial performance im-
provement are less likely to reside in the vicinity of
current practices and routines, and thus, local search
may not identify these superior positions, stalling at
lower quality solutions (Levinthal, 1997; Puranam,
Stieglitz, Osman, & Pillutla, 2015).
These well-recognized limitations of local search
have spawned a rich literature, both theoretical
(Gavetti & Levinthal, 2000; Levinthal & March, 1993;
March, 1991) and empirical (Fleming & Sorenson,
2004; Katila & Ahuja, 2002; Rosenkopf & Almeida,
2003; Rosenkopf & Nerkar, 2001), which identifies
mechanisms organizations use to overcome tenden-
cies toward local search. One stream of studies
220 JanuaryAcademy of Management Annals
TABLE 3
Solution Search and Its Characteristics: Key Topics, Arguments, and Selected Example Studies
Key Topics Arguments in the Literature Selected Example Studies
Locus of
problemistic
search
Organizational search is
predominantly local
Audia and Goncalo (2007) [I] Levinthal (1997) [G] Martin and Mitchell
(1998) [G]Dowell and Swaminathan
(2006) [G]
Levinthal and March
(1993) [G] Rosenkopf and
Nerkar (2001) [G]Gavetti and Levinthal
(2000) [G]
Madsen and Desai (2010)
Tyler and Caner
(2016)Katila and Ahuja (2002) [G]
March (1991) [G]
Stuart and Podolny
(1996) [G]
Mayer and Argyres
(2004) [G]
Local search has distinct
advantages
Anand, Mulotte, and Ren
(2016)
Helfat (1994) Simon (1978b) [I]
Denrell and March (2001)
Knudsen and Levinthal
(2007) [G, I]
Taylor and Greve
(2006)
Local search has distinct
disadvantages
Fleming (2001) [G] Katila (2002) [G]
Fleming and Sorenson
(2004) [G]
Levinthal (1997) [G]
Organizational mechanisms exist
that allow search that is less
local
Ahuja and Katila (2004) [G] Gupta, Smith, and Shalley
(2006) [G]
Rivkin and Siggelkow
(2003) [G]Baumann and Siggelkow
(2013) Lavie, Stettner, and
Tushman (2010) [G]
Rothaermel and
Deeds (2004) [G]Beckman (2006) [G]
Laursen (2012) Rosenkopf and
Almeida (2003) [G]
Bhardwaj, Camillus, and
Hounshell (2006) [I] Laursen and Salter (2006) [G]
Schildt, Maula, and
Keil (2005) [G]
Csaszar and Siggelkow
(2010) [G]
Raisch and Birkinshaw
(2008)
Siggelkow (2002) [G]Ethiraj, Levinthal, and Roy
(2008)
Rivkin (2000) [G]
Siggelkow and Rivkin
(2005) [G]Gavetti and Levinthal
(2000) [G] Wadhwa and Kotha
(2006) [G]
Problemistic search may be less
exploitative than is assumed
Barkema and Schijven
(2008)
Beckman, Haunschild, and
Phillips (2004) [G]
Baum and Dahlin (2007) Posen and Chen (2013)
Ben-Oz and Greve (2015)
Online versus
offline
evaluation in
problemistic
search
Search may involve online
evaluation, in which
a potential solution must be
implemented to assess its
merits
Argote and Miron-Spektor
(2011) [G]
Khanna, Guler, and Nerkar
(2016)
Gavetti and Levinthal
(2000) [G]
Levitt and March (1988) [G]
Haleblian, Kim, and
Rajagopalan (2006)
Winter, Cattani, and Dorsch
(2007) [G]
Search results may be evaluated
offline requiring higher
cognitive abilities
Csaszar and Levinthal
(2016) [G]
Martignoni, Menon, and
Siggelkow (2016) [G]
Fleming and Sorenson
(2004) [G]
Winter et al. (2007) [G]
Gavetti and Levinthal
(2000) [G]
Intensity of
problemistic
search
Below-aspiration, the greater the
distance between current
performance and the aspiration
level, the greater the resources
invested in problemistic search
Chen (2008)
Chen and Miller (2007)
Hundley et al. (1996)
Lim and McCann (2013)
Vissa et al. (2010)
Institutionalized search
processes can be present,
functioning in parallel to
problemistic search
Antonelli (1989)
Chen and Miller (2007)
Gubbi et al. (2015)
Vissa et al. (2010)
2018 221Posen, Keil, Kim, and Meissner
investigates the important role of variation among
organizational members in enabling an organization
to search a broader area of the solution landscape
(Beckman, 2006; Rosenkopf & Almeida, 2003). A
second stream investigates a variety of managerial
approaches within the organization under the
heading of ambidexterity (Gupta et al., 2006; Lavie
et al., 2010; Raisch & Birkinshaw, 2008). A third
stream investigates how drawing upon actors out-
side the organization’s boundaries may facilitate
broader search (Laursen & Salter, 2006; Rothaermel
& Deeds, 2004; Schildt et al., 2005; Wadhwa & Kotha,
2006). Theoretical work complements this research
by pointing to a variety of mechanisms, often de-
manding higher level cognitive ability, that allows
exploration of more distant locations in the search
space (Baumann & Siggelkow, 2013; Csaszar &
Siggelkow, 2010; Ethiraj et al., 2008; Gavetti &
Levinthal, 2000; Rivkin, 2000; Rivkin & Siggelkow,
2003; Siggelkow, 2002; Siggelkow & Rivkin, 2005).
The research on how firms may overcome local-
ness in organizational search, along with a substan-
tial literature highlighting the merits of broader
search (Baum & Dahlin, 2007; Dahlander, O’Mahony, &
Gann, 2016), is suggestive of the possibility that prob-
lemistic search may be less exploitative than suggested
by the original conceptualization in Cyert and March
(1963) and March and Simon (1958). For instance,
Billinger et al.’s (2014: 93) laboratory study of indi-
vidual search on a rugged landscape suggests that
“human participants were prone to over-exploration,
since they broke off the search for local improvements
too early.”Posen and Chen (2013), in a study of
learning curves of U.S. commercial banks, find that
firms tend to seek and learn from external knowledge
when their performance is below their aspiration, with
a stronger effect for entrants than incumbents. Ben-Oz
and Greve (2015: 1827) conclude that “performance
relative to aspiration levels has effects on long-term
strategic actions as well as short-term ones, and thus
argue against strict myopia.”Moreover, search may
be multidimensional. Organizations may focus on
exploitation through local search along one di-
mension, such as relative to the firm’sknowledgebase
and routines (Fleming & Sorenson, 2004; Helfat, 1994;
Katila & Ahuja, 2002; Stuart & Podolny, 1996), yet may
explore more distantly along another dimension, such
as relative to the firm’s boundary (Rosenkopf & Nerkar,
2001).
Online versus offline evaluation in problemistic
search. In their conceptualization of problemistic
search, Cyert and March (1963) specify search as the
activity organizations engage in to create and con-
sider solution candidates to address a performance
shortfall. Their formulation of problemistic search
was purposely devoid of a substantial cognitive
component to create a counterposition to the overly
rational view of contemporary economics. This has
an important bearing on our understanding of how
alternative solutions are evaluated as firms engage in
TABLE 3
(Continued)
Key Topics Arguments in the Literature Selected Example Studies
Availability of slack resources
may lead to more search,
although it may reduce
problemistic search
Bromiley (1991) Chen and Miller (2007)
Chen (2008) Singh (1986)
Greve (2003a) Voss, Sirdeshmukh, and
Voss (2008) [G]Greve (2003b)
Greve (2003c)
Slack resources may suppress
problemistic search among
some potential solutions
Barreto (2012)
Fang, Kim, and Milliken
(2014)
Kuusela et al. (2017)
Empirical research typically
assumes, at least implicitly,
search is online
Audia and Greve (2006) Iyer and Miller (2008)
Greve (1998)
Harris and Bromiley (2007)
Firms may shift attention away
from the performance based
aspiration to a survival goal
under severe threat such as
bankruptcy
Audia and Greve (2006) Mone, McKinley, and Barker
(1998)Chen and Miller (2007)
Shimizu (2007)Desai (2008)
Iyer and Miller (2008)
March and Shapira (1992)
Notes. [I]: papers on individual or team level search. [G]: papers on general search not particularly problemistic search.
222 JanuaryAcademy of Management Annals