Abstract
Following the Behavioral Theory of the Firm, we conceive of firms’ strategic decisions as a function of performance feedback. Firms are prone to adjust production and/or R&D investments when substantially under- or over-performing their aspirations. Previous research in this arena has mainly focused on one type of strategic decision. Firms however have to allocate their resources between different activities/areas. In addition to prior contributions, we further enquire the influence of respondent characteristics, competitive dynamics and the machine type chosen on two types of decisions: production and R&D investment. We test our assumptions using as a novel combination of a computer-based serious game and survey data collected among a sample of participants (N=155) in the Netherlands and Germany. Production is driven by historical success in production as well as an increase in resources. R&D investment is determined by an increase in slack resources compared to historical aspirations, but not by direct production feedback or social comparison. Overall the results for historical aspirations are more consistent than the results for social aspirations.
| Original language | English |
|---|---|
| Journal | Proceedings - Academy of Management |
| Volume | 2016 |
| Issue number | 1 |
| DOIs | |
| Publication status | Published - Jan 2016 |
Keywords
- Aspiration Levels
- Behavioral Theory of the Firm
- Decision making