Daniela Patricia Blettner and Simon Gollisch
This study aims to elucidate reference points and organizational identity in letters to shareholders (LTSs) of publishing companies and develops propositions on their relation to…
Abstract
Purpose
This study aims to elucidate reference points and organizational identity in letters to shareholders (LTSs) of publishing companies and develops propositions on their relation to strategic adaptation. This study examines how characteristics of reference points (number, temporality and specificity) and organizational identity (focus, discontinuity and distinctiveness) relate to strategic adaptation. This research advances performance feedback theory and behavioral strategy by presenting rich data on how managers use reference points. This study also theorizes on the role of organizational identity as an observation frame. Finally, this study informs managers on how they can adapt reference points and organizational identity to drive strategic adaptation in their organizations.
Design/methodology/approach
This paper uses text analysis of LTSs of eight companies in the global publishing industry over six years. The research design is an exploratory, comparative case study.
Findings
The authors present the findings of rich empirical data analysis of reference points and organizational ideology, develop a typology and propose three proposed relationships. This paper develops three propositions on how characteristics of reference points (number, temporality and specificity) and organizational identity (focus, discontinuity and distinctiveness) relate to strategic adaptation.
Originality/value
This study elucidates reference points that managers use when they make sense of performance feedback. This study further develops a typology of reference points and suggests propositions on how reference points and organizational identity relate to strategic adaptation. The novel linguistic approach to revealing reference points-in-use and the study of decision-making in its empirical context contribute to a better understanding of the micromechanims of decision-making that are central to behavioral strategy.
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Matteo Cristofaro, Frank Butler, Christopher Neck, Satyanarayana Parayitam and Chanchai Tangpong
Mishari Alnahedh and Abdullatif Alrashdan
This paper aims to integrate insights from the behavioral theory of the firm and the dynamic capabilities perspective to explain how the historical and social attainment…
Abstract
Purpose
This paper aims to integrate insights from the behavioral theory of the firm and the dynamic capabilities perspective to explain how the historical and social attainment discrepancies motivate firms to change. Specifically, this paper proposes that a negative historical attainment discrepancy encourages the firm to engage in strategic change to solve its performance problems. In contrast, this paper advanced that a positive social attainment discrepancy motivates strategic change as a mechanism to bolster the firm’s position within the industry. Further, this paper integrated the moderating effects of industry dynamism and industry munificence.
Design/methodology/approach
This paper tests hypotheses using panel data on 2,435 US public firms over the years from 1996 to 2018. This paper uses a fixed-effects regression model to empirically test these hypotheses.
Findings
This paper finds empirical support for the effects of both the negative historical attainment discrepancy and the positive social attainment discrepancy on the firm’s tendency to engage in strategic change. As for the hypothesized moderating effects, this paper finds that industry munificence accentuated the effects of both attainment discrepancies on the firm’s tendency to engage in strategic change. However, the results do not support the hypothesized moderating effect of industry dynamism on either of these attainment discrepancies.
Originality/value
This paper contributes to the research on the separate effects of historical and social comparisons within the context of strategic change. Further, the paper bolsters our understanding of how performance feedback increases the firm’s tendency to change. Finally, the paper integrates theoretical views from the behavioral theory of the firm and the dynamic capabilities perspective on how socially high-performing firms may build and sustain their competitive advantage through organizational change.
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Ana María García-Pérez and Vanessa Yanes-Estévez
This paper aims to deepen the strategic choices of wineries by identifying their strategic reference points in their internal and external dimensions, and presenting their…
Abstract
Purpose
This paper aims to deepen the strategic choices of wineries by identifying their strategic reference points in their internal and external dimensions, and presenting their strategic positioning typology.
Design/methodology/approach
Strategic reference point theory (Fiegenbaum et al., 1996) and strategic positioning (Lavie and Figenbaum, 2000, 2003). The Rasch methodology (1960) is applied to a sample of wineries in the Canary Islands (Spain).
Findings
The principal internal reference is the quality of the wine and of the service offered, followed by social and environmental protection. The principal external reference are the customers, followed by society. Surprisingly, competitors, as an external factor, do not affect wineries’ strategic choices. Strategic positioning shows a polarisation of wineries: the largest group evidences a myopic strategic positioning, attaching little importance to internal and external references. In contrast, the second group of wineries is comprised of adaptive wineries who attach considerable importance both to internal as well as external references, and who are likely emerging as competitive wineries.
Research limitations/implications
These references urge wineries towards a conservative approach that focuses on satisfying their regular customers by offering the same quality products and services. Results also evidence a particular sensitivity towards society and the environment. Strategic positioning shows that the largest group of wineries (myopic) lack strategic orientation and are subject to high rates of failure.
Originality/value
Wineries’ strategic positioning emerges as a tool to help management and institutions in their strategic diagnosis. The Rasch method (1960) is applied for the first time to the strategic positioning of wineries according to the choices of their managers.
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Katarina Labajova, Julia Höhler, Carl-Johan Lagerkvist, Jörg Müller and Jens Rommel
People’s tendency to overestimate their ability to control random events, known as illusion of control, can affect financial decisions under uncertainty. This study developed an…
Abstract
Purpose
People’s tendency to overestimate their ability to control random events, known as illusion of control, can affect financial decisions under uncertainty. This study developed an artifactual field experiment on illusion of control for a farm machinery investment.
Design/methodology/approach
In an experiment with two treatments, the individual farmer was either given or not given a sense of control over a random outcome. After each decision, the authors elicited perceived control, and a questionnaire collected additional indirect measures of illusion of control from 78 German farmers and 10 farm advisors.
Findings
The results did not support preregistered hypotheses of the presence of illusion of control. This null result was robust over multiple outcomes and model specifications. The findings demonstrate that cognitive biases may be small and difficult to replicate.
Research limitations/implications
The sample is not representative for the German farming population. The authors discuss why the estimated treatment effect may represent a lower bound of the true effect.
Originality/value
Illusion of control is well-studied in laboratory settings, but little is known about the extent to which farmers’ behavior is influenced by illusion of control.