Kenan-Flagler Business School, U. of North Carolina at Chapel Hill, United States
A core strategy question is how organizations manage performance targets, particularly when they pursue multiple and potentially conflicting goals simultaneously. Although the original behavioral theory of the firm recognized the role of values in resolving this conflict, current literature typically assumes ex-ante value structure and considers only explicit values that guide and motivate action. We argue that explicit values alone do not help resolve goal conflict. Instead, actions embody the tradeoffs that organizations were willing to accept and thus reveal their underlying implicit values. We empirically identify these implicit values in the context of corporate decarbonization initiatives. We leverage a latent class logit discrete choice model to abductively identify four archetypes that represent heterogeneous implicit value configurations. Contrary to expectations, we find that after accounting for selection into the sample, organizations that express greater concern for climate change and set aggressive targets do not systematically select the initiatives with the largest emissions avoided. Instead, those organizations select high-cost initiatives with lower emissions impact. This highlights the role of implicit values-in-action as a separate construct from explicit values. We contribute to the behavioral strategy and decoupling literatures by differentiating explicit and implicit values as the mechanism through which organizations reconcile competing goals.