TY - JOUR
T1 - Adaptive aspirations
T2 - Performance consequences of risk preferences at extremes and alternative reference groups
AU - Hu, S.
AU - Blettner, D.P.
AU - Bettis, R.
PY - 2011
Y1 - 2011
N2 - Goals or aspirations and their relationships to risk taking and performance are important issues in both psychology and strategic management. The concept of adaptive aspirations, as discussed in Cyert and March's Behavioral Theory of the Firm, has long been a topic of interest in both fields. Moreover, many studies in strategy have focused on risk and/or extreme performance. In the current paper, we build on earlier models of adaptive aspirations. We introduce into the models a new risk preference function that incorporates changes in risk preference at extremes of performance. Based on empirical studies and the managerial literature, we also introduce alternative strategies for setting reference groups. Simulations of the resulting models suggest important differences in outcomes from earlier studies and this invites further empirical investigation. These simulations also have significant implications for managerial goal setting.
AB - Goals or aspirations and their relationships to risk taking and performance are important issues in both psychology and strategic management. The concept of adaptive aspirations, as discussed in Cyert and March's Behavioral Theory of the Firm, has long been a topic of interest in both fields. Moreover, many studies in strategy have focused on risk and/or extreme performance. In the current paper, we build on earlier models of adaptive aspirations. We introduce into the models a new risk preference function that incorporates changes in risk preference at extremes of performance. Based on empirical studies and the managerial literature, we also introduce alternative strategies for setting reference groups. Simulations of the resulting models suggest important differences in outcomes from earlier studies and this invites further empirical investigation. These simulations also have significant implications for managerial goal setting.
U2 - 10.1002/smj.960
DO - 10.1002/smj.960
M3 - Article
SN - 0143-2095
VL - 32
SP - 1426
EP - 1436
JO - Strategic Management Journal
JF - Strategic Management Journal
IS - 13
ER -