The effects of prospect theory in positive and negative change situations: How do option frames, power roles, and messages between roles differ depending on the type of change situation?

Abstract

Organizational change is prevalent in society. At it simplest level, this situation involves a change agent who is directing change and a change target who is directly impacted by the proposed modifications. Often these two roles differ with regard to authority such that the change agent has greater authority. However, change targets sometimes express their views of proposals and even propose alternatives. We are interested in such dialogues. We predict that change agents will construct messages to targets that are primarily focused on the economic outcomes of proposals, whereas change targets will construct messages that focus on generating new ideas. We conducted a role-play in 2 experiments: in Experiment 1, individuals played the role of university administrators cutting back the size of student groups or the presidents of the affected groups,; and in Experiment 2, they played the role of university administrators increasing the number of funded student groups or the potential student presidents of these potential new groups. These roles constructed messages about the proposed changes. Results supported our predictions.