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Performance feedback can be constructed using firms’ own (historical) performance, or the performance of peers (social). Those two types of performance feedback can be consistent (both positive, both negative) or inconsistent (one positive, the other negative). The research on the impact of consistent versus inconsistent feedback has been inconclusive, suggesting that inconsistent feedback might lead to more intense or less intense responses, or no response. In this paper, we theorize and test how firms respond to (in)consistent performance feedback.

We test our hypotheses on a longitudinal sample of 2,819 private, high-growth firms in the US with 6,688 observations between the years 2007 and 2016. Our dataset comprises 25 different industries. We use topic modeling on textual data from firms’ web pages to capture portfolio expansion.

We find that consistent negative performance feedback strengthens portfolio expansion, but consistent positive feedback does not influence portfolio expansion. We also find that inconsistent performance feedback weakens portfolio expansion, but only with negative historical feedback and positive social feedback.

We contribute to the Behavioral Theory of the Firm by improving our understanding of mechanisms of feedback configurations. Specifically, we elaborate on the role of (in)consistent social feedback when firms respond to historical performance feedback. We also contribute to the theory by better understanding private firms’ responses to performance feedback.

This paper investigates how various emergent theoretical perspectives in entrepreneurship research, representing diverse decision-making logics, influence firm growth and evolution. It explores the interaction among decision-making logics, including experimentation, affordable loss, flexibility and pre-commitment as components of effectuation, alongside causation and bricolage and their synergistic effects on firm growth.

This study uses a multi-phase, discovery-oriented approach. Initially, insights from existing literature on decision-making logic were combined with in-depth interviews with 10 Iranian entrepreneurs within the food sector. This phase used alternative template research to evaluate the principles of effectuation, causation and bricolage within case study data depicting firm growth. Subsequently, a self-administered survey was developed based on these insights and distributed to 205 entrepreneurs in Iran. The survey data was analysed using fuzzy-set qualitative comparative analysis (fsQCA) to identify key factors and pathways influencing firm growth.

Using a discovery-oriented approach, this study formulates a comprehensive framework detailing decision-making logics that influence firm growth. Through fsQCA, 12 distinct paths are identified, highlighting the complex interplay of causation, effectuation and bricolage in high-growth firms within the food sector.

This study has limitations. FsQCA identifies only logically sufficient combinations, suggesting potential for exploring alternative pathways in future research. Given COVID-19’s impact on the food sector, examining decision-making logic across diverse contexts and industries is advisable. Additionally, exploring how bricolage, causation and effectuation affect outcomes like new product development and innovation is essential in a growth-focused context. It is also important to consider environmental and organizational factors influencing growth.

This paper pioneers the examination of emerging theoretical paradigms in entrepreneurship and their impact on firm growth. It identifies critical configurations of causation, effectuation and bricolage, providing actionable insights for navigating dynamic business environments.