A comparison of alternative measures of organizational aspirations

• Published in: Strategic management journal Vol. 35; no. 3; pp. 338 - 357
• Main Authors: Bromiley, Philip, Harris, Jared D.
• Format: Journal Article
• Language: English
• Published: Chichester, UK John Wiley & Sons, Ltd 01.03.2014; John Wiley & Sons; Wiley Periodicals Inc
• Subjects: Analytical forecasting; Aspirations; behavioral theory; Business entities; Comparative analysis; Comparative studies; Corporate strategies; Decision making models; Financial management; financial misrepresentation; Goal setting; Income; Management science; Measurement; Misrepresentation; Net income; Organizational effectiveness; performance measure bias; Performance metrics; R&D; Rationing; Research & development; Research & development expenditures; search; social comparison; Strategic management; Uncertainty; Weighted averages
• ISSN: 0143-2095; 1097-0266
• DOI: 10.1002/smj.2191

Research on organizational aspirations has used various representations of firm-level aspirations and based those representations on various performance measures. To advance our understanding of the measurement of aspirations, we empirically compare three different aspiration models defined using six different performance measures to explain three different firm outcomes (financial misrepresentation, R&D spending, and income-stream uncertainty). The results moderately support a model with separate historical and social aspirations over a model of aspirations that systematically switches between the two. The results strongly support both the separate and switching models over a model where aspirations constitute a weighted average of historical and social comparisons, the model associated most directly with Cyert and March's original specification. We discuss the implications of these results and highlight directions for future research.