Three Essays Exploring Delay of Gratification in the Context of Organizations

Pursuit of novel and long-term goals is a double-edged sword. Reaching successful outcomes can be rewarding, yet pursuit of such goals are fraught with intermediate challenges including failures. How organizations pursue novel and long-term goals despite facing risks of failures is a noteworthy topic to explore. Generally, persistence with failed alternatives is considered an irrational decision. However, when organizations are faced with novel or risky alternatives that have superior long-term implications, the optimal behavior is to persist with short-term failures, as long as future success is likely. I suggest an important factor affecting the behavior and outcome of an organization, especially when it pertains to novel or risky projects is the level of delay of gratification in organizations. In other words, the capability of organizations and their members to overcome short-term failures and persist in long-term goals influences important outcomes such as innovation. In this dissertation, I examine various factors that influence delay of gratification in organizations. My empirical study is based on a multi-method analysis that draws upon three data-sources. Building on interviews with executives and entrepreneurs, I first construct validated delay of gratification in organizations using Amazon Mturk. Then, in the first essay I demonstrated from a survey-based experiment involving 190 top managers from medical device firms that contemplating about past outcomes influences executives’ perceived delay of gratification in their organizations. In the second essay, I demonstrated from an analysis of archival innovation data in conjunction with survey data of executives that in firms with high innovativeness, past innovation outcomes are strongly related to executives’ perceived delay of gratification in their organizations. Finally, in the third essay, I examine the micro-foundations of delay of gratification in organizations. Specifically, I found a positive and significant relationship between actors’ individual delay of gratification and their perceived delay of gratification in their organizations. Actors’ (top management team) TMT status neither influenced their perceived delay of gratification in their organizations nor affected the relationship between their individual delay of gratification and their perceived delay of gratification in organizations. The results of this dissertation have implications for research on organizational learning and innovation, behavioral strategy, strategic leadership, and the escalation of commitment.