How aspiration levels affect response to a punctuating technological change: An empirical test

Michael G. Hendron, Michael K. Bednar, Andrew D. Henderson

Research output: Contribution to conferencePaperpeer-review

Abstract

This paper investigates the influence of firm performance relative to social and historical aspirations on responsiveness to major environmental change. Drawing on theories of failure-induced change, threat rigidity, and issue framing, we derive competing hypotheses regarding the likelihood that a firm will respond to the emergence of a new technology. We then test these predictions by examining firms in the U.S. computer industry, which faced a punctuated environmental change when IBM introduced its open architecture Personal Computer in 1981. Consistent with notions of failure-induced change, we find that firms performing below aspiration levels are more likely to respond by adopting a new technology in their product lines. This is contrary to the predicted effects of threat-rigidity, which suggests that firms performing below aspirations are less responsive to environmental change. In comparison, firms performing further above their aspirations were more likely to adopt new technology, suggesting that environmental change is often framed as an opportunity when an organization's prior performance exceeds its expectations. We conclude by discussing the significance and implications of these findings.

Original languageEnglish (US)
DOIs
StatePublished - 2005
Externally publishedYes
Event65th Annual Meeting of the Academy of Management, AOM 2005 - Honolulu, HI, United States
Duration: Aug 5 2005Aug 10 2005

Other

Other65th Annual Meeting of the Academy of Management, AOM 2005
CountryUnited States
CityHonolulu, HI
Period8/5/058/10/05

Keywords

  • Aspirations
  • Change
  • Threat rigidity

ASJC Scopus subject areas

  • Information Systems and Management

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