DANCING WITH STRANGERS: ASPIRATION PERFORMANCE AND THE SEARCH FOR UNDERWRITING SYNDICATE PARTNERS.

Abstract

This article discusses a study which is motivated by the observation that inter-organizational partner selection research and learning theory share a common emphasis on uncertainty and risk. Uncertainty and risk reduction is the principal rationale offered to explain organizations' preference for their past partners and their partners' partners when forming new collaborations. By concentrating on uncertainty and risk reduction as an underlying logic, however, partner selection research does not help specify the conditions under which organizations' decisionmakers are willing to take on the uncertainty and risk of unfamiliar partners. The researchers employ performance feedback models to specify conditions under which organizations' decisionmakers are more or less likely to forego the certainty of the status quo to pursue risky change. These models suggest that performance gaps relative to aspirations may prompt organizational decision makers to accept the uncertainty and risk of partnering with strangers from beyond their local networks. The researchers' analysis of partner selection among Canadian investment banks shows a clear sensitivity to historical and relative performance feedback.