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This paper seeks to explore the effect of performance duration (rather than intensity) on the subsequent initiation of strategic change by firms. Specifically, the effect of outperformance and underperformance duration on strategic change, as well as the moderating effect of environmental dynamism, is studied.

Using a fixed-effects model, analyzing a sample of 34,907 firm-year observations from 1980 to 2018 across 112 industries mostly supported proposed hypotheses.

Results revealed a U-shaped relationship between outperformance duration and strategic change and an inverted U-shaped relationship between underperformance duration and strategic change. The moderation role of environmental dynamism was only partially supported.

This study examines a new dimension of performance feedback, namely duration, rather than the widely used intensity of performance feedback, to enhance our understanding of the behavioral theory of the firm.

Research has focused primarily on the antecedents that influence the risk taking of CEOs themselves. This study examines how an important event experienced by a CEO at a direct rival firm influences a CEO's risk-taking. It also examines how prior firm performance relative to aspirations moderates the relationship.

In order to test the hypothesis, the authors perform an a difference-in-differences methodology.

Using a difference-in-differences methodology, we find that when a CEO wins a prestigious CEO award, competitor CEOs increase their firm risk-taking in the post-award period. The proclivity becomes stronger when their prior firm performance relative to aspirations is better. These findings suggest that a CEO winning a prominent CEO award influences competitor CEOs' risk-taking.

This study contributes to the literature on managerial risk-taking by highlighting that a star CEO winning a prominent award may serve as a striving aspiration and induce competitor CEOs to take risks, and that two different types of aspirations – striving and competitive aspirations – interact to influence the competitor CEOs' risk-taking.

Resource reconfiguration enables firms to adapt in dynamic environments by supplementing, removing, recombining, or redeploying resources. Whereas prior research has underscored the merits of resource reconfiguration and the modes for implementing it, little is known about the antecedents of this practice. According to prior research, under given industry conditions, resource reconfiguration is prompted by a firm’s corporate strategy and by characteristics of its knowledge assets. We complement this research by identifying learning from performance feedback as a fundamental driver of resource reconfiguration. We claim that performance decline relative to aspiration motivates the firm’s investment in knowledge reconfiguration, and that this investment is reinforced by the munificence of complementary resources in its industry, although uncertainty about the availability of such resources limits that investment. Testing our conjectures with a sample of 248 electronics firms during the period 1993–2001, we reveal a clear distinction between exploitative reconfiguration, which combines existing knowledge elements, and exploratory reconfiguration, which incorporates new knowledge elements. We demonstrate that performance decline relative to aspiration motivates a shift from exploitative reconfiguration to exploratory reconfiguration. Moreover, munificence of complementary resources mitigates the tradeoff between exploratory and exploitative reconfigurations, whereas uncertainty weakens the motivation to engage in both types of reconfiguration, despite the performance gap. Nevertheless, codeployment, which extends the deployment of knowledge assets to additional domains, is more susceptible to uncertainty than redeployment, which withdraws those assets from their original domain and reallocates them to new domains. Our study contributes to emerging research on resource reconfiguration, extends the literature on learning from performance feedback, and advances research on balancing exploration and exploitation.

This study seeks to explore the relationship between performance relative to aspiration and SMEs' internationalization speed, and moderating effects of top management's policy knowledge and institutional distance between the above relation.

This study tests the authors’ hypotheses using data on Chinese manufacturing SMEs over a 5-year period from 2013 to 2017. The authors leverage archival panel data on publicly listed companies on the SME Board, GEM and New OTC Market in the Shanghai and Shenzhen Stock Exchanges. The authors then collected data from the WIND and ZEPHYR databases.

The results confirm a U-shaped relation between performance relative to aspiration and SMEs' internationalization speed, and show that this relation is steepening by top management's policy knowledge in home country but flattening by institutional distance as environmental dynamics.

The study findings contribute to the international business field by exploring how a firm's risk situation in internationalization can change, thereby influencing SMEs' international expansion.

Although previous research has investigated how performance feedback may affect firms’ strategic actions, their findings has been inconsistent. The relationship between performance feedback and firms’ strategic activities thus appears complex. Moreover, the authors contend that it may vary with the measurement strategies employed (i.e. social or historical feedback, operationalizations of strategic actions or accounting- and market-based performance indicators) and the national contexts.

Therefore, the current article presents a comprehensive meta-analysis of prior research, including 1,637,817 sample observations from 101 studies that span more than 18 countries.

The results indicate that (1) performance that are below or above aspirational levels generally has a positive relationship with firms’ strategic actions; (2) these relationships are contingent on the implementation forms taken by the key variables, such as performance feedback, strategic actions and performance indicators; and (3) the relationships are much stronger in countries where managerial discretion is greater.

The findings contribute to the clarification of long-standing theoretical and empirical debates regarding the relationship between performance feedback and strategic actions, as well as some pertinent directions for future research.

Performance feedback theory (PFT) has informed analyses in numerous national contexts and has been used to explain various business and management activities of firms. Stemming from behavioral theory and grounded in a cognitive perspective, which views organizational actions as being the results of decisions produced by groups of individual decision-makers, PFT research has mostly assumed the universal nature of cognition and decision-making processes. However, PFT also presumes that individual decision-makers bring with them different backgrounds and experiences. Hence, this paper offers propositions on how cultural differences in individualism-collectivism influence the major components of PFT, including the formation and revision of performance goals (aspiration levels), and search behaviors and risk preferences in response to gaps between goals and actual performance. Implications for future research and practice are discussed.

This paper offers theoretical propositions for the above purpose.

This is not an empirical analysis.

By integrating the individualism-collectivism differences framework into the PFT model, the authors answer previous calls to integrate concepts and frameworks from other theories into PFT while considering the role of cultural differences in aspiration-consequence relationships. Additionally, much of PFT research has focused on outcomes, while actual internal processes have remained unobserved. By focusing on how cultural differences influence various PFT processes, this conceptual analysis sheds light on the unobserved bounds of decision-makers' cognitions.

This paper examines how some specific psychological characteristics and stress levels of small and medium-sized enterprise (SME) key decision-makers (founders/managers) (KDMs) influence firm goal attainment based on two firm aspiration types.

This study hypothesizes that perceived resilience, social skills (self-promotion, ingratiation, expressiveness, social adaptability), and stress of SME KDMs will differently influence firm performance goal achievement based on firm historical versus social aspirations. IBM AMOS v27 is used to test these hypotheses on survey data of 267 Australian SME KDMs.

The study reveals that KDMs’ perceived resilience, social skills and stress differentially impact the achievement of firm performance goals when selecting firm-level historical and social aspirations. Resilience and some specific social skills can even have a detrimental effect on achieving firm goals when applying historical and social aspirations. Historical aspirations are based on the firm’s performance history, while social aspirations are based on the performance of a reference group of competitor firms. The differences in the relationship between these characteristics and the two aspiration types are also explained. Furthermore, the study reveals the important role of perceived stress levels in achieving firm performance goals, using both aspiration types.

This study is the first to investigate how the perceived use of some specific psychological characteristics of SME KDMs influence the ability to meet firm performance goals based on the discretionary use of historical and social aspirations and the relationship between these aspiration types. In this context, the paper explains the reasons for the differences and similarities in their use. Thus, this study provides an important empirical contribution to research on the emergent domain of micro-foundational SME goals.

Using behavioral theory of the firm, the purpose of this paper is to examine how a small firm’s performance relative to historical and social aspirations is related to its international entrepreneurial orientation (IEO). This study also explores two environmental factors, liability of foreignness (LoF) and host-country market potential (HMP), as the moderators for the relationship of performance and IEO.

This study uses survey for data collection from Canadian small firms and employs regression models for data analysis.

The results show that small firms demonstrate stronger IEO when their performance is below aspirations, but their IEO diminishes when their performance exceeds aspirations. The authors also found that a small firm’s LoF does not moderate the impact of its performance feedback on IEO. However, the authors found HMP plays a moderating role when a small firm’s performance is below aspirations.

This study investigates the relationship of IEO to aspiration and found that this relationship is moderated by HMP. The study advances our knowledge on small firms’ international behavior.

This study investigates the relationships between environmental performance feedback and green supply chain management (GSCM). It explores how environmental performance above or below aspirations affects the implementation of GSCM practices (specifically sustainable production [SP] and sustainable sourcing [SS]) through the lens of the behavioral theory of the firm (BTOF), which has received scant attention in the operations management literature.

The study used data from the sixth round of the International Manufacturing Strategy Survey (IMSS). It employed hierarchical linear regression to test the proposed hypotheses. Moreover, the study tested an alternate model to rule out the possible role of financial performance aspirations in explaining the implementation of SP and SS.

The results indicate that organizations determine their efforts put into the two GSCM practices according to environmental performance feedback: the greater the aspiration–environmental performance discrepancy, the stronger the efforts put into implementing GSCM practices.

This study contributes to the GSCM literature by revealing the impact of environmental performance aspirations on the implementation of GSCM practices through the lens of the BTOF. It also extends the BTOF by applying it in the GSCM context and indicating that performance feedback is based on environmental performance instead of financial performance in this specific context.

The purpose of this paper is to study the self and vicarious learning patterns of organizations through operational success and benchmark failure experiences. The study is specific to the Indian telecom sector.

This study uses published data of four major telecom firms in India reported by Telecom Regulatory Authority of India (TRAI) and analyzed the influence of aspiration performance discrepancy on organizational learning by hypotheses testing. Feasible generalized least square model with year fixed effects is used to run panel data regression.

In the case of operating experience for performance above aspiration, firms fail to learn from their own experience as well as from others’ experiences. For benchmark failure experience under positive discrepancy, firms learn from their own experience. For performance below aspiration, no significant result was found. These insights allow managers to reconfigure their learning orientation and to develop an effective mechanism for absorbing crucial knowledge from themselves and peer firms.

Practitioners should take into account that their knowledge repertoire is essential for learning in good times. This study also motivates managers involved in operating activities to make use of publicly disclosed reports, engage in vicarious learning or form a coalition for developing coping mechanism under negative discrepancy scenarios.

This paper presents a unique context by studying operational success, and failure experiences of telecom sector in India wherein benchmark for failure was decided by the governing regulatory body, TRAI, unlike other studies where success and failures reference points are intrinsically selected.