Dual Performance Feedback and Elite Law Firm Mergers

Abstract

This paper examines how institutional logics interrelate with the organizational learning process to generate strategic changes. Although organizational actors are surrounded by contradictory demands stemming from multiple logics, organizational actors interact with those demands through aspiration levels. When organizations fail to satisfy conflicting demands compared to aspiration levels, decision makers experience intense political dissonance among members, which interrupt their decision making processes on strategic changes. In contrast, when organizations produce satisfactory performance on either of conflicting demands, decision makers are less likely to be exposed to this dissonance; thus they are more likely to search for solutions by taking greater risks. Using a longitudinal dataset of 217 largest law firms in the United States from 2005 to 2012, this paper shows relative commitment to the public legal service moderates the relationship between economic performance feedback and corporate acquisi...