Abstract: Research in goal setting postulates that there is a positive relationship between goals and performance in doing a certain task. Recently, however, some scholars argue that goals could be counterproductive by enhancing risk-taking and unethical behavior, and by increasing the psychological cost of goal failure. Should goals require a warning label? We begin to address this question by examining how demanding goals influence performance. In the context of industrial waste prevention, we test whether stretch goals and failed goals previously set increase or decrease subsequent performance. Contrary to conventional wisdom, we find that goal failures and stretch goals have a detrimental rather than a beneficial effect on performance.

Abstract: We examine the effects of individual- and organizational level performance aspirations on managers’ divergent strategic roles. Data from 123 senior middle managers governing 21 multi-country organizations (MCOs) of a Fortune 500 company revealed that both individual- and organizational-level aspirations drive a manager’s divergent strategic behavior. This finding sheds light on psychological underpinnings of managers’ strategic roles, and thereby contributes to strategy process research which has unearthed structural antecedents of middle managers’ divergent strategic roles, but has remained silent regarding psychological antecedents. We also add to the behavioral theory of the firm as we provide a multilevel perspective toward performance aspirations.

Abstract: Many academics, consultants and managers advocate stretch goals to attain superior individual and organizational performance. However, there is limited research exploring the effects of stretch goals on organizational performance. Here, we propose to explore the effects of both stretch profit and size goals on the performance distribution. When compared with moderate goals, stretch goals for either profit or size or both improved performance for a few, while many found the stretch goals too difficult and abandoned them. Consequently, stretch goals for either profit or size or both led to higher performance variance and a right-skewed performance distribution but did not improve median performance. In complex environments, finding and following strategies to realize stretch goals is difficult and risky, and, instead, some managers adopt lower self-set goals or focus on survival. The findings extend theory on organizational goal and suggest caveats for the adoption of stretch goals.

Abstract: This paper examines which characteristics of business group determine the market or technology search of its affiliates. We empirically confirm that when the performance of the affiliate is below its aspiration level, the affiliate is positively associated with the market search intensity to improve their performance in a short period. When the performance of affiliate is above its aspiration level, however, the affiliate is negatively associated with the technology search accompanies higher risk, because of their tendency to maintain status quo. Moreover, our finding suggests that the level of diversification of the business group negatively influence the search behaviors by increasing the internal information dependency within the group. We found that the accumulated slack at the group level has no significant moderating effect.

Abstract: The research on adaptive aspirations has been focused on strategic change as a direct outcome of performance feedback. However, little research has considered how managers’ interpretation of performance feedback affects strategic change decision making. Therefore, we examine the role of psychological drivers (e.g., past/future orientation, rational/intuitive) of senior managers in impacting feedback interpretation and strategic change. Using textual analysis techniques, we will analyze: important psychological drivers in senior managers of the aspiration adaptation process and the effect of such aspiration adaptation on strategic change.

Abstract: This study presents a meta-analytic review and theoretical integration of the effect of performance feedback on organizational behavior. It addresses three central debates in literature: What is the effect of performance below and above aspiration level on organizational behavior? Does performance feedback influence different organizational outcomes in different ways? Is the relationship between performance adjusted by aspiration level and organizational behavior moderated by aspiration source (i.e. historical or social)? Preliminary results indicate that while the overall effect of performance feedback on organizational behavior is negative, aspiration source and type of organizational outcome significantly moderates this relationship.