Abstract: We explore how performance relative to aspiration level influences firms’ choice of diversification strategy, and how this relationship changes contingent upon environment. Using a sample of U.S. manufacturing firms during 2000-2013, we propose that under stable environment, firms pursue different diversification strategies according to their performance feedback situation, but uniformly pursue unrelated diversification when faced with crisis. However, underlying motivations for unrelated diversification during the crisis differs upon their performance situation. The study contributes both to the behavioral theory and diversification literatures by integrating the theory with environment dynamism concept to identify antecedents for diversification strategy.

Abstract: Resource allocation within firms is a major importance to the economy. However, little is known about the fine-grained practices by which companies can optimize investments within their ongoing businesses. In this study, we address this topic by examining three key resource allocation mechanisms – capital investments, sales and marketing, and R&D. Our database consists of over 500 companies based in several industries. We found that there are four factors that affect company performance as well as company growth and innovation: agility, project discipline, risk appetite and incentives. These mechanisms complement each other and form two key meta-factors. Disciplined agility, which results from a consistence evaluation process and agility in reallocating resources when necessary as opposed to strict adherence to an annual process. Inclusive incentives refer to the need for risk taking to take place within an environment of short-term project based incentives and longer-term career based rewards.

Abstract: Organizational aspirations play dual roles that create tension in setting organizational aspiration level. On one hand, they serve a backward-looking, evaluative role as a benchmark for grading performance. On the other, they serve a forward-looking, allocative role in influencing the allocation of limited resources. We suggest that managers will be more aggressive in setting aspirations when the competition for resources is fierce, but will set less aggressive targets when resource competition is lower or the cost of missing performance targets is higher. Across two research settings, we find that intra- and inter-organizational factors that influence the intensity of resource competition and the cost of missing performance targets, such as financial slack, debt ratio, institutional ownership, and analyst coverage, determine the aggressiveness of aspiration level.

Abstract: Under a rapidly globalizing environment, it is inevitable for firms to expand in international markets outside of their home country. In doing so, showing strong commitment to global expansion provides a firm various benefits in terms of support from stakeholders. However, rigorous academic research tends to focus on individual level commitment and limited attention has been paid to the organizational level commitment. To fill the gap, we examine three research questions in this paper: (1) What factors contribute to the difference in terms of the degree of commitment (i.e., concreteness/clearness of the announcement) regarding global expansion? (2) Is the degree of commitment associated with actual results? (3) If not, why not? Our sample consists of 90 Japanese food firms.