Expanding performance feedback theory to temporary organizations

Temporary organizations–such as projects–are increasingly relevant, yet organization theory on temporary organizations remains incomplete. In particular, we have little understanding of when and how temporary organizations change. Performance feedback theory, the behavioral theory of the firm’s cornerstone to explain change in organizations, provides a promising platform to address this problem. We bring together ideas on goal- based aspiration levels, time pressure, and vicarious learning to expand performance feedback theory to temporary organizations. Specifically, we theorize and test how time pressure and vicarious learning affect aspiration- level induced change in temporary organizations. We test our theory using a unique longitudinal dataset on 575 fundraising projects (7,752 observations) published on Kickstarter. Our results largely confirm our theorizing, demonstrating that performance below the aspiration level (i.e. negative performance feedback) has a non-linear effect on the change of narratives, which is attenuated by time pressure. Furthermore, performance below the aspiration level benefits vicarious learning of complex and general narratives from best-performing peers, a result that parallels temporary organizations and non-temporary organizations. We discuss implications for theory and research on performance feedback theory and temporary organizations.