Abstract

This paper analyzes the development and extension of organizational goal hierarchy that leads to decisions of technological innovation. We synthesize theories of organizational change and uncertainty, search, and organizational goals, and empirically investigate whether organizational goals have any roles during search, and whether they impede or facilitate the decisions of change and innovation. Using a unique set of interviews and cases of eight established Chinese companies that have adopted blockchain technology, we uncover an iterative process of search and goal specification. The process is characterized by managers who extend the organizational goal hierarchy through the specification of business and operational goals at the lower levels of the organizations, while these newly-specified goals prompt further search. We further observe that this co-evolution of search and the hierarchy of goals facilitate organizational change and technology innovation through two mechanisms of uncertainty mitigation. First, goal specification mitigates the uncertainty related to change by addressing the changing customer needs, financial resources, regulations, technology, etc. through clearly specified goals at lower levels of organizations. Second, goal specification mitigates decision uncertainty by limiting decision options, which reduces both decision flexibility and uncertainty. We conclude that the pursuit of existing organizational goals reduces the uncertainty of organizational change, which, paradoxically, facilitates innovation.