Abstract

Prize-offering contests often yield impressive results. That contests can help reduce costs, improve quality, and increase sales seems widely appreciated. Perhaps less well appreciated is that contests have side effects, too. What actually occurs when a contest enters an organization resembles what happens when a medication enters an organism. The new element infiltrates the system in unintended as well as intended ways. The systemic effects of contests on organizational behavior are, therefore, more diverse than the contest objectives, but contest administrators look for and measure results only in terms of contest objectives. In complex organizational systems, however, success measured by intended results only is success measured with tunnel vision. Ignoring unanticipated second-order consequences, as tunnel vision does, carry some risk. Conceivably, the contest successful in meeting its objective may have simultaneously afflicted the company with a Pandora's box of side effects, but these unintended results need not remain unrecognized. It is possible to look for them systematically, to ask what else the contest did besides fulfill its intended purpose.