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Adaptive aspirations and performance heterogeneity: Attention allocation among multiple reference points
Author(s) -
Blettner Daniela P.,
He ZiLin,
Hu Songcui,
Bettis Richard A.
Publication year - 2015
Publication title -
strategic management journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 11.035
H-Index - 286
eISSN - 1097-0266
pISSN - 0143-2095
DOI - 10.1002/smj.2260
Subject(s) - competitor analysis , bankruptcy , sample (material) , german , marketing , organizational performance , business , economics , chemistry , archaeology , finance , chromatography , history
Organizations learn and adapt their aspiration levels based on reference points (prior aspiration, prior performance, and prior performance of reference groups). The relative attention that organizations allocate to these reference points impacts organizational search and strategic decisions. However, very little research has explored this. Therefore, we build a recursive feedback model of learning from organizational experience that explains heterogeneity of attention allocation to the reference points in adaptive aspirations. In a sample of the German magazine industry (1972–2010), we find when early in their life cycle and as they or their parent company age, organizations tend to focus more on their own aspirations; however, when at the verge of bankruptcy, they increase their attention to competitors' performance . Copyright © 2014 John Wiley & Sons, Ltd.