The role of problemistic search & strategic reference point theory on aspiration re-operationalization in response to failure of environmental performance targets
Keywords
Loading...
Authors
Issue Date
2024-07-10
Language
en
Document type
Journal Title
Journal ISSN
Volume Title
Publisher
Title
ISSN
Volume
Issue
Startpage
Endpage
DOI
Abstract
Following the behavioral theory of the firm (BTOF), behavior with regard to strategy formulation of firms is guided by the discrepancy between aspiration and performance. Organizational aspirations are desired performance levels in specific organizational outcomes and have also been called goals and reference points. After establishing aspirations, firms monitor performance with respect to the aspiration, and take action in the form of problemistic search to restore performance and resolve any discrepancy between desired and actual performance (performance feedback theory). This thesis uses the empirical research of Malen (2022), who found that with regard to environmental aspirations firms respond differently to performance below aspiration level, which contrasts traditional performance feedback theory and tries to find out if firms indeed respond differently to failure of environmental aspirations. Furthermore, it uses strategic reference points(SRP) in explaining firms changing their aspirations. It does so by using a quantitative data analysis using data from the biggest firms in the US (including the S&P500). It concludes that firms do not change their environmental aspirations more in response to failure of environmental aspirations than firms that do not fail their environmental aspirations. Nor do SRP’s have a significant effect on firms changing their environmental aspirations in response to environmental underperformance. Lastly, some alternative explanations are given and possible future research ideas are named.
Description
Citation
Supervisor
Faculty
Faculteit der Managementwetenschappen