By complementing prospect theory with organization-level behavioral theory and the threat-rigidity thesis, I study how factors unique to an organizational level can interact with the individual-level tendencies predicted by prospect theory. I tested this approach by examining organizational decisions to divest or retain formerly acquired units in a longitudinal setting. The results show that divestiture decisions are influenced by both individual- and organization- level factors that cannot be explained solely by one theory and provide a richer understanding of organizational risk-seeking behaviors. Copyright of the Academy of Management, all rights reserved.
ASJC Scopus subject areas
- Business and International Management
- Business, Management and Accounting(all)
- Strategy and Management
- Management of Technology and Innovation