Adaptive aspirations and performance heterogeneity: Attention allocation among multiple reference points

Authors

  • Daniela P. Blettner,

    Corresponding author
    1. Strategy, Technology and Operations Management, Beedie School of Business, Simon Fraser University, Burnaby, British Columbia, Canada
    2. Center for Innovation Research, Tilburg University, Tilburg, The Netherlands
    • Correspondence to: Daniela P. Blettner, Simon Fraser University, 8888 University Drive, Burnaby BC, V5A 1S6, Canada. E-mail: dblettne@sfu.ca

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  • Zi-Lin He,

    1. Department of Management, School of Economics and Management, Tilburg University, Tilburg, The Netherlands
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  • Songcui Hu,

    1. Department of Management and Organizations, Eller College of Management, University of Arizona, Tucson, Arizona, U.S.A.
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  • Richard A. Bettis

    1. Strategy and Entrepreneurship, Kenan-Flagler Business School, University of North Carolina, Chapel Hill, North Carolina, U.S.A.
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Abstract

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.

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