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Aspiration-Level Adaptation in an American Financial Services Organization: A Field Study

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Author Info

  • Stephen J. Mezias

    ()
    (Department of Management and Organizational Behavior, New York University, New York, New York 10003)

  • Ya-Ru Chen

    ()
    (Departments of Management and Organizational Behavior and International Business, New York University, New York, New York 10003)

  • Patrice R. Murphy

    ()
    (Robert H. Schaffer and Associates, Stamford, Connecticut 06905)

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    Abstract

    Using field data from an American financial services organization, we examined the effects of three important variables in Cyert and March's (1963) initial conceptualization of the aspiration-level adaptation process: The previous aspiration level, performance feedback, and social comparison. Past findings obtained in controlled contexts (Glynn et al. 1991; Lant 1992) have provided empirical support for the attainment discrepancy model (Lewin et al. 1944), which includes variables of the previous aspiration level and attainment discrepancy (i.e., performance feedback). We replicated these findings in the field: The effects of the previous aspiration level and attainment discrepancy on the current aspiration levels were significant and positive. In addition, we investigated the effect of social comparison using a variable based on the difference between the performance of the focal unit and the performance of comparable others (Greve 1998). Based on the assumption that decision makers in organizations will expect to observe similar performance levels among those in the same comparison group (Wood 1989), we posited that the effect of social comparison would be negative, refiecting managerial efforts to reduce performance discrepancies among similar units. The empirical results supported the prediction from this reasoning. We conclude by discussing implications of our findings for theory and research in organizational learning and the behavioral theory of the firm.

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    File URL: http://dx.doi.org/10.1287/mnsc.48.10.1285.277
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    Bibliographic Info

    Article provided by INFORMS in its journal Management Science.

    Volume (Year): 48 (2002)
    Issue (Month): 10 (October)
    Pages: 1285-1300

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    Handle: RePEc:inm:ormnsc:v:48:y:2002:i:10:p:1285-1300

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    Keywords: organizations; decision making; goal setting;

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    Cited by:
    1. Carmen Lee & Roman Kraeussl & Andr´┐Ż Lucas & Leonard J. Paas, 2008. "A Dynamic Model of Investor Decision-Making: How Adaptation to Losses affects Future Selling Decisions," Tinbergen Institute Discussion Papers 08-112/2, Tinbergen Institute, revised 02 Sep 2013.
    2. Massini, Silvia & Lewin, Arie Y. & Greve, Henrich R., 2005. "Innovators and imitators: Organizational reference groups and adoption of organizational routines," Research Policy, Elsevier, vol. 34(10), pages 1550-1569, December.
    3. repec:dgr:uvatin:2008112 is not listed on IDEAS
    4. Feng, Bo & Lai, Fujun, 2014. "Multi-attribute group decision making with aspirations: A case study," Omega, Elsevier, vol. 44(C), pages 136-147.
    5. Theresa Lant & Zur Shapira, 2009. "Managerial Reasoning about Aspirations and Expectations," Discussion Paper Series dp498, The Center for the Study of Rationality, Hebrew University, Jerusalem.
    6. Castellani, Marco & Di Giovinazzo, Viviana & Novarese, Marco, 2010. "Procedural rationality and happiness," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 39(3), pages 376-383, June.
    7. Lant, Theresa & Shapira, Zur, 2008. "Managerial reasoning about aspirations and expectations," Journal of Economic Behavior & Organization, Elsevier, vol. 66(1), pages 60-73, April.
    8. Georgellis, Yannis & Gregoriou, Andros & Tsitsianis, Nikolaos, 2009. "Reference-dependent preferences in the public and private sectors: A nonlinear perspective," MPRA Paper 17021, University Library of Munich, Germany.
    9. Thorsten Grohsjean & Tobias Kretschmer & Nils Stieglitz, 2011. "Performance Feedback, Firm Resources, and Strategic Change," DRUID Working Papers 11-02, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.

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