Decision‐Makers’ Generation of Policy Solutions amidst Negative Performance: Invention or Rigidity?

Abstract

AbstractBehavioral theory proposes that decision‐makers engage in search to identify satisfactory policy solutions to organizational problems. For complex problems, required solutions cannot be identified merely through search, but must be created and designed. While behavioral theory suggests that negative performance will spur creative solution generation, threat‐rigidity theory provides a competing view that decision‐makers' creative efforts are ultimately thwarted through restricted information processing and constriction of control. We test these competing expectations through a survey‐experimental comparison of the creativity of policy solutions in response to negative budgetary performance, generated by a nationally representative sample of local government decision‐makers. The findings indicate that negative performance decreases the creativity of policy solutions as rated by policy experts, and reveals that key mechanisms of threat‐rigidity theory are at play. This reduced generation of creative policy solutions amidst negative performance places limits on public organizations' capacity to adapt to adverse circumstances.