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This study aims to elucidate reference points and organizational identity in letters to shareholders (LTSs) of publishing companies and develops propositions on their relation to strategic adaptation. This study examines how characteristics of reference points (number, temporality and specificity) and organizational identity (focus, discontinuity and distinctiveness) relate to strategic adaptation. This research advances performance feedback theory and behavioral strategy by presenting rich data on how managers use reference points. This study also theorizes on the role of organizational identity as an observation frame. Finally, this study informs managers on how they can adapt reference points and organizational identity to drive strategic adaptation in their organizations.

This paper uses text analysis of LTSs of eight companies in the global publishing industry over six years. The research design is an exploratory, comparative case study.

The authors present the findings of rich empirical data analysis of reference points and organizational ideology, develop a typology and propose three proposed relationships. This paper develops three propositions on how characteristics of reference points (number, temporality and specificity) and organizational identity (focus, discontinuity and distinctiveness) relate to strategic adaptation.

This study elucidates reference points that managers use when they make sense of performance feedback. This study further develops a typology of reference points and suggests propositions on how reference points and organizational identity relate to strategic adaptation. The novel linguistic approach to revealing reference points-in-use and the study of decision-making in its empirical context contribute to a better understanding of the micromechanims of decision-making that are central to behavioral strategy.

A growing body of literature has emphasized the importance of innovative strategy as a source of competitive advantage. Drazin and Shoonhoven summarized the literature using multilevel theoretical perspectives (community, population, and organization) that affect organizational innovative behavior. In parallel, Fiegenbaum et al. developed an organizational level theory, based on prospect theory, to explain how risky strategies are determined within organizations. They argued that organizational reference points delineate organizational attitudes toward risk‐taking into two polarized regimes: risk‐aversive whereas below it is risk‐assertive. They described the organizational mechanism that converts attitudes toward risk‐taking into actual risk‐aversive and risk‐assertive strategic behavior. A three‐dimensional space is provided that illustrates the spectrum of strategic reference points (SRP). The current study extends SRP theory. It is proposed that the nature of the industry, organizational strategy, and performance impact the kind of reference points used, which, in turn, impact risk‐taking behavior towards innovative strategy.

The concept of strategic groups is a central theme in the field of strategic management, and over time it has been used by a considerable body of theoretical and empirical literature to examine different aspects of competitive strategy. However, to date, there has been little systematic investigation that examines aspects associated with competitive benchmarking and the impact and effect that this has on strategy development. Thus despite the level of knowledge that has been accumulated over the years regarding the dynamics of competitive landscapes, our understanding of the impact and effect of this particular matter on decision making is limited. More importantly, studies that have addressed the topic are either theoretical alone in contents or have only used secondary data. Equally, these studies have approached the subject mostly from an impersonal mathematical perspective and practitioners' views on the issue have been overlooked. This paper aims to address these weaknesses in the literature. In doing so, it seeks to place attention on the individual, which has been overlooked by previous examinations.

The research is cross‐sectional and it is based on primary methodology, having employed qualitative techniques for analysis. It involves face‐to‐face semi‐structured interviews combined with the repertory grid technique. The industry investigated is the UK mainstream leisure foreign package holidays. The sample size is near to the sampling frame of the research and the investigation took place between March and August 2003.

It was found that managers of firms from the same strategic group consider their group as a reference point in their decision‐making process and as a result of their benchmarking observations they adjust their firms' competitive strategies to reflect their group's strategic behaviour. It was also found that firms of the same strategic group are more likely to respond to market conditions and events in a similar manner.

This paper examined issues associated with benchmarking, in the context of strategic groups, having employed primary qualitative research strategies in order to add “fresh” data on a topic that so far has merely been investigated quantitatively through secondary sources alone. As such, it has initiated a much needed contents dimension on the topic to complement the activity and process‐oriented only studies in the area. The research not only tested earlier propositions in order to accumulate more evidence in the field and enable better generalisations on the subject but it has also expanded current theories in the area.

This paper seeks to analyze how compensation framing influences the risk‐taking behavior of the firm's chief executive officer (CEO), and the mediating role played by risk bearing.

The study employs a sample of 108 US firms that issued an initial public offering in 1993, 1994 and 1995. Data from a survey filled out by the CEO of the firm are completed with secondary information. A structural equation model is estimated which explicitly considers the mediating effect of risk bearing on the compensation framing‐risk taking relationship.

The analyses indicate that while the performance targets included in the CEO's compensation contract indirectly influence the riskiness of the CEO's strategic decisions through its influence on the employment risk component of executive risk bearing, the level of compensation relative to peers does not. It shows that not all reference points are equally relevant in determining the CEO's willingness to take risk, nor do all the elements of risk bearing play the same role in that partial mediation.

The paper provides a refinement of previous work on modelling the risk‐taking behavior of managers.

The paper provides a guideline to think about the behavioral consequences of the pay level in the market for executives and the performance targets included in the compensation contracts.

The paper proposes and tests a model on how different reference points used to frame compensation influence CEO risk taking. It also provides the first test of a central proposition of the behavioral agency model: risk bearing partially mediates the influence of compensation framing on risk taking.

The purpose of this paper is to study the strategic process of small- and medium-sized enterprises (SMEs) including strategic reference points (SRP) (Fiegenbaum et al., 1996).

The paper identifies the strategic positioning of SMEs (Lavie and Fiegenbaum, 2000, 2003) according to the importance that their managers give to internal and external SRP. Their influence on strategic types (Miles and Snow, 1978) and performance are analysed. This study uses information, from 83 SMEs in the Canary Islands (Spain), collected with a questionnaire.

SMEs are primarily adaptive firms followed by narcissist ones: numerous SMEs focus their attention on internal SRPs. SMEs strategic positioning determines their strategic orientations to a much lesser extent than their characteristics (sector, size and age) do. The results show that product specialisation, the only difference between adaptive SMEs and narcissist and amorphous ones, is not evident in their performance.

Decision makers and institutions should reflect about the maturity of the strategic process and the adaptation dynamic of SMEs. The need for SMEs to focus on their external vision should be highlighted.

The study includes SRP in the strategic process of SMEs. It contributes to the literature by drawing a map of the strategic positioning of SMEs, based on their SRPs (Lavie and Fiegenbaum (2000, 2003) and by linking the strategic positioning of SMEs with their strategic types. It also has the value of applying the Rasch Rating Scale Model (Andrich, 1978, 1988).

Going back into previously exited markets is a significant management risk. But, how are re-entry risks managed? By adding strategic reference point (SRP) rationales to the risk management literature, this chapter examines re-entry after initial entry and divestment on a sample of 654 multinational enterprise (MNE) re-entrants. The authors move away from narrow risk management lenses according to which risks happen in isolation and theorize that MNEs simultaneously manage international risk by exploiting the trade-offs among external and internal sources of risk. The authors explain that, for re-entrants, exit may become the SRP for evaluating future strategic choices. The results suggest that re-entrants tend to manage re-entry risk by choosing partner-based modes that enable them to maintain strategic flexibility at re-entry. Surprisingly perhaps, market-specific experience acquired during the initial market foray does not provide strategic flexibility, in that highly experienced firms still experience risk trade-offs.

The purpose of this paper is to examine and analyze the significant qualitative factors that affect the financial performance of financial firms. The authors argue that those factors can be used as “indices of identity” or external cues that help financial firms enhance their relative position in the marketplace. This can be done by focusing on the indices that are highly and positively associated with financial performance measures. This is a practical approach since the financial products are characterized by intrinsic intangibility.

The researchers empirically test this framework in a sample of the European banking industry. The methodology utilizes the benefits of the “content analysis,” that focuses on the critical observed elements of firm identity as published in the most recognized publications. The indices of identity examined in this paper are reputation for clients, age, CEO, size, country of origin, geographic spread, and profits. Measures of financial performance include: return on assets, non‐performing loans/total loans, shareholder equity/total assets and deposits/total assets.

The results show that indices of identity are positively related to corporate financial performance and thus can effectively help firms be well recognized by other actors in the marketplace.

The paper contributes to the literature in two ways. First, the paper shows how firm's indices of identity can be quantified through the use of content analysis. Second, the paper creates an association between the indices of identity and financial performance. This association offers a quantitative approach that shows the possibilities of overcoming the problems of intangibility in the marketplace.

The ultimate purpose of this paper it to encourage international business scholars and managers to pay more attention to global social time when performing research and developing business strategy.

Strategic reference point (SRP) theory is used as a foundation to assist in visualizing the meaning of social time in a global context. From this grounding point, the authors make specific suggestions about the importance of the topic despite it being largely overlooked in international research dating back to Hofstede.

Time utility takes on a significantly different meaning when both a marketing manager's context and market are global. The conceptualization of time by different cultures can yield significantly different meanings based upon a culture's SRP(s) as to how social time is measured. Cultural differences necessitate having this flexible orientation towards social time to effectively develop and implement global marketing strategies. This research addresses the importance of breaking‐down the concept of social time into its fundamental dimensions and developing strategic implementation steps using the dimensions of time as competitive tools in the global marketing arena.

A six‐step process is developed to assist marketing researchers and managers in developing social time sensitive marketing strategies. Researchers and managers must be aware of the differences in social time perspectives and should analyze the situation to ascertain differences in the dimensions of each cross cultural group. An effort must be made to combine these varying social time perspectives into a consolidated social time foundation for the marketing team in the host country. Differences in social time must be taken into consideration when developing/executing strategies in other countries that have different social time perspectives.

Breaking new ground in international business, this paper sets the ground work for the future study of up to 12 different streams of research important to the understanding of (global) time in international business. Managerial tools are included in the discussion to assist in international marketing practice.

When managers set aspirations for their firms, they typically compare their own firms' performance to past aspirations as well as to the performance of social reference groups. The authors explore how firm generic strategy affects managers' adaptation of firm aspirations in response to feedback from three social reference groups that vary in terms of breadth (population average, strategic group, and one direct rival).

The authors propose that firm generic strategy (low-cost or differentiation) functions as an organizational information filter through with managers interpret performance feedback. The authors test for whether generic strategy has a moderating effect on the influence of performance feedback from social reference groups.

Based on a longitudinal sample of US airlines, the study shows that all firms are influenced most strongly by their strategic groups. Low-cost and differentiation generic strategies differ in terms of which social reference group motivates a larger reaction when overperforming: low-cost firms are more influenced by the population average which is contributed to by the entire industry than are differentiating firms, while differentiating firms are more swayed by the narrow focus of their direct rivals than are low-cost firms.

Although firm strategy represents a core decision at the firm level, to the best of the authors’ knowledge, performance feedback research, surprisingly, has not yet integrated generic strategy into its models.