Performance Feedback, Multiple Goals at the Same and Different Levels, and Internationalization (WITHDRAWN)

Abstract

Extending the behavioral theory of the firm and using a sample of diversified firms from the Russell 3000 index 1998–2016, we examined changes in their scopes of internationalization based on performance feedback on multiple goals with different importance at the same level and across hierarchical levels. We posited that negative feedback on (primary) profitability and (secondary) sales growth goals at the corporate level influences problemistic search and internationalization in diverse ways, resulting in decreasing and increasing rates of internationalization, respectively. We also posited that feedback on secondary goals can modify responses to feedback on primary goals at the same corporate level. We found that corporate managers responded to corporate profitability shortfalls by increasing internationalization as BU profitability exceeded aspirations and BU growth fell below aspirations but by decreasing internationalization as BU profitability fell below aspirations and BU growth exceeded aspirations. Our study contributes to the literature by connecting multiple goals to problemistic search and testing changes in scopes of internationalization in response to the separate interaction effects of profitability and growth goals at the same corporate level and across hierarchical levels. The hypotheses were largely supported.