Abstract
This study addresses two research questions. First, how do organizations behave after an enduring period of success? Second, what factors exacerbate or reduce the likelihood of occurrence of specific behaviors? Building upon self-serving attribution, over-confidence and superstitious learning reinforcement theories, we suggest that the greater the extent of success an organization achieves, the higher the level of conservatism and attachment to past strategies it will exhibit in the future. Such inertia decreases organization’s adaptation to the changes in the environment and may bring detrimental outcomes. We also suggest that the relationship between past success and future conservatism and attachment to past strategies is moderated by the concentration of power among decision-makers, the heterogeneity of decision-makers and the speed and non-ambiguity of subsequent performance feedbacks. We empirically investigate these hypotheses in the context of the motion pictures industry over the period 1995 through 2008.