Aspiration formation and attention rules

Luca Berchicci and Murat Tarakci

Strategic Management Journal, 2022, vol. 43, issue 8, 1575-1601

Abstract: Research Summary The behavioral theory of the firm (BTOF) proposes that firm behavior is goal‐directed and that organizational aspirations are a function of prior historical aspirations, past performance, and the performance of others. Despite the centrality of aspirations in the BTOF, little is known about aspiration formation and why firms favor one aspiration type over others, that is, attention rules. Drawing on the attention‐based view, we posit that attention rules are shaped by environmental volatility over time and vary by locus of attention across firms. Data from US manufacturing firms managing their toxic chemical waste provide evidence for attention‐rule adaptation. Managerial Summary Firms must set aspirations, measure, and improve their toxic waste levels to avoid costly economic, regulatory, and environmental hazards. Although aspirations play a vital role in driving firm behavior, we still have limited understanding of how managers allocate their attention to various performance feedback during aspiration formation. We argue that attention allocation differs for managers across organizational hierarchy exposed to varying degrees of environmental volatility. Greater volatility of the business environment steers managerial attention from the performance of others toward their own historical aspirations. We also suggest that the attention of managers at higher levels of the organizational structure are directed from their own historical aspirations toward performance of others. We find corroborating evidence for our conjectures.

Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://doi.org/10.1002/smj.3371

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:stratm:v:43:y:2022:i:8:p:1575-1601

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0143-2095

Access Statistics for this article

More articles in Strategic Management Journal from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().