Heterogeneity in adaptive aspirations and reference groups

The setting of goals or aspirations as first conceptualized in A Behavioral Theory of the Firm is an important issue in behavioral approaches to strategic management and organization theory. Empirical studies of how adaptive aspirations are related to organizational outcomes have been inconclusive. One possibility is that the inconsistency is an artifact of more or less ad hoc methods used in operationalizing aspirations. In this paper, we use panel data on the German magazine industry (1972 till 2009) to diagnose the weaknesses of current approaches to estimating adaptive aspirations. We have an observable measure of aspirations to validate our estimation of the weights for different components in aspiration adjustment; we estimate a set of such weights for each magazine, and we account for both internal and external reference groups (other magazines in the same content category and sister magazines under the same publisher). The results show that rules for aspiration adjustment are far more heterogeneous than commonly assumed, even within a well defined industry like the magazine industry.