Abstract

Prior research on performance feedback has focused on the direct impact of performance feedback on risk taking (Lim & McCann, 2013) and paid little attention to the role of contextual factors. In particular, there are few empirical studies that examine how performance feedback and institutions interplay in risk taking of organizations. This study aims to fill this gap by investigating the role of organization-level institutional logics and state-level institutions in a microfinance industry. Institutions arise as a result of human beings’ continuous efforts to deal with uncertain environments (North, 1990; Scott, 1995). Thus, individual and organizational actors are affected by institutions, and different institutions can be a source of heterogeneity of organizational behavior (Peng, 2003). This suggests that the impact of performance feedback on risk taking can be affected by institutional factors. And, microfinance industry provides a good setting to investigate this issue.

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