Attainment Discrepancy Research Articles

Towards New Frontiers: How Attainment Discrepancy Affects Exploratory Behavior in Crowdfunding

Online crowdfunding has become a popular mechanism for creative projects that are not suitable for traditional financing means. Interestingly, creators on crowdfunding platforms frequently embark on projects beyond their prior expertise. In this study, we investigate how fundraising performance affects a creator's decision to venture into (i.e., explore) new project categories. Leveraging data from Kickstarter, we unveil a “V-shaped” relationship between creators’ funding attainment discrepancy (the gap between realized and target performance) and their tendency to explore novel project categories. Our finding challenges the conventional assumption that exceeding target performance would inhibit exploratory behavior. In addition, we show that when the attainment discrepancy transitions from negative to positive, the probability of exploration exhibits a discontinuous dip.

Examining the Relationship between Negative Attainment Discrepancy and Corporate Social Responsibility Inconsistency: Evidence from Chinese Listed Firms

Examining the Relationship between Negative Attainment Discrepancy and Corporate Social Responsibility Inconsistency: Evidence from Chinese Listed Firms

Extending behavioral theory of the firm to new ventures: Dispositional optimism as a moderating influence on new product introductions in high-tech ventures

Extant literature has typically drawn from the behavioral theory of the firm (BTOF) to examine new product introductions in the context of well-established companies. This paper extends the behavioral theory of the firm to entrepreneurial firms and argues that jointly considering founders' dispositional optimism together with the performance feedback promises to yield a better understanding of new product introductions in new ventures. We analyze a longitudinal dataset on the activities of 344 newly founded high technology ventures in the United States. The key insight of our study is that when BTOF is applied to the context of nascent, entrepreneurial ventures, the personality and dispositional characteristics of the entrepreneur must be considered. Specifically, we find that performance attainment discrepancy leads to new product introductions, but only when the entrepreneur's dispositional optimism level is high.

Curse or blessing? Impact of the scope and duration of negative attainment discrepancy on ESG practices

AbstractToday, scholarly discourse has been primarily centered around the causes and consequences of enterprise environmental, social, and governance (ESG) practices. However, given that enterprises may encounter negative attainment discrepancies across several areas (scope) and endure negative discrepancies over an extended period of time (duration), the question of whether and how negative attainment discrepancy affects enterprise ESG practices remains unexplored. Based on the behavioral theory of the firm, this study explores the differentiated impact of the scope and duration of negative attainment discrepancies on enterprise ESG practices, using Chinese A‐share listed companies (data from 2011 to 2019) as the research sample. Meanwhile, it investigates the moderating effect of multidimensional human capital in Top Management Teams (TMT) from technical background, overseas experience, and educational attainment. The results demonstrated that the scope of negative attainment discrepancy promotes enterprise ESG practice, while the duration of negative attainment discrepancy inhibits ESG practice. Furthermore, the TMT's technical background, overseas experience, and educational attainment strengthen the scope of negative attainment discrepancies in promoting enterprise ESG practice. Additionally, the overseas experience of the TMT reinforces the inhibitory impact of the duration of negative attainment discrepancies on enterprise ESG. The results of this study can provide the corresponding decision‐making suggestions and references for the senior management team and shareholders of enterprises.

Unpacking the effects of performance feedback on strategic change: the moderating role of industry conditions

PurposeThis paper aims to integrate insights from the behavioral theory of the firm and the dynamic capabilities perspective to explain how the historical and social attainment discrepancies motivate firms to change. Specifically, this paper proposes that a negative historical attainment discrepancy encourages the firm to engage in strategic change to solve its performance problems. In contrast, this paper advanced that a positive social attainment discrepancy motivates strategic change as a mechanism to bolster the firm’s position within the industry. Further, this paper integrated the moderating effects of industry dynamism and industry munificence.Design/methodology/approachThis paper tests hypotheses using panel data on 2,435 US public firms over the years from 1996 to 2018. This paper uses a fixed-effects regression model to empirically test these hypotheses.FindingsThis paper finds empirical support for the effects of both the negative historical attainment discrepancy and the positive social attainment discrepancy on the firm’s tendency to engage in strategic change. As for the hypothesized moderating effects, this paper finds that industry munificence accentuated the effects of both attainment discrepancies on the firm’s tendency to engage in strategic change. However, the results do not support the hypothesized moderating effect of industry dynamism on either of these attainment discrepancies.Originality/valueThis paper contributes to the research on the separate effects of historical and social comparisons within the context of strategic change. Further, the paper bolsters our understanding of how performance feedback increases the firm’s tendency to change. Finally, the paper integrates theoretical views from the behavioral theory of the firm and the dynamic capabilities perspective on how socially high-performing firms may build and sustain their competitive advantage through organizational change.

The Impact of Economic Inequality on Social Disparities: A Quantitative Analysis

This quantitative study examines the complex relationship between economic inequality and social inequities, focusing on educational attainment. The study examines how Gini coefficient-measured economic disparity affects educational attainment in hypothetical countries. This study uses a linear regression model to examine how economic inequality affects social outcomes. A statistically substantial positive correlation exists between the Gini coefficient and educational attainment discrepancy. Educational attainment disparity increases by 2.5 years per unit rise in the Gini coefficient, according to the calculated coefficient. This supports the idea that economic inequality increases education gaps, prolonging cycles of disadvantage for vulnerable populations. The study underlines the intricacy of these processes by conceding that regression analysis cannot prove causation. Economic inequality affects educational attainment disparity through policy frameworks, institutional structures, and cultural norms. This highlights the necessity for extensive policy responses to address these issues. The policy ramifications of this study are significant. The findings emphasize the need for fair access to quality education, especially for disadvantaged communities. Targeted actions are needed to reduce economic inequality's impact on education and promote inclusivity. This study examined educational attainment, but its approach and findings are important. The association between economic inequality and social differences is multifaceted, begging for further study. This study adds to the debate between economic inequality and social inequality. This study emphasizes the need for educated and context-sensitive strategies to reduce gaps, enhance social mobility, and create more equitable society as societies face inequality.

Do academic CEOs influence corporate social irresponsibility? The moderating effects of negative attainment discrepancy and slack resources

AbstractAcademic experience has been found to significantly impact on the attitudes and behaviors of managerial decision‐makers, which in turn influences corporate strategic decisions. However, the impact of academic decision‐makers on corporate ethical decisions, particularly corporate social irresponsibility (CSIR), has yet to receive due attention to date. In this study, we integrate the upper echelons theory and managerial discretion literature to examine whether and when academic CEOs (CEOs with academic experience) influence corporate social irresponsibility (CSIR). First, we suggest that academic CEOs discourage CSIR because they have higher moral standards; thus, their companies are less likely to engage in CSIR activities. In addition, we propose that negative attainment discrepancy (slack resources) reduces (enhances) academic CEOs' managerial discretion to incorporate their ethical preferences into their decisions, thereby weakening (enhancing) the above relationship. This study is the first to examine the relationship between academic CEOs and CSIR. Additionally, the empirical findings of this study offer crucial insights for shareholders and policymakers to prevent or mitigate CSIR effectively.

What's inside the Mind of a CEO? The Effects of Discretionary Slack Resources on R&D Investment.

This study investigates the effects of discretionary slack resources on a firm's R&D investment. Specifically, we examine whether and how a CEO's psychological traits play a role in the relationship between discretionary slack and R&D investment. Using a panel sample from U.S. manufacturing firms in 2006-2010, we found that slack resources lead to an increase in R&D intensity. Furthermore, this positive effect is stronger when CEOs have a strong promotion focus and perceive an addressable negative attainment discrepancy. Thus, our findings show how (a) the level of discretionary slack and (b) CEOs' promotion focus and aspiration level jointly shape R&D investment decisions. Considering CEOs' psychological traits contributes to a more comprehensive view of the conditions under which discretionary slack resources matter for a firm's strategic decisions.

Attainment Discrepancy, Financial Slack and R&D Investment

Attainment Discrepancy, Financial Slack and R&D Investment

Innovation for survival: The scope of negative attainment discrepancy and enterprise R&D investment

The question of whether negative attainment discrepancy inhibits or promotes enterprises' investment in R&D remains unresolved. We argue that ignoring the diverse sources of negative attainment discrepancy and the long-term orientation of CEOs are two key reasons for the divergent findings of existing studies. Based on performance feedback theory and upper echelons theory, this study focuses on the effect of negative attainment discrepancy's scope on enterprises' R&D investment and how this effect may vary, depending on the CEO's long-term orientation. Using Chinese listed high-tech manufacturing enterprises (data taken from 2008 to 2020) as research samples, this study proposes and empirically demonstrates that negative attainment discrepancy scope motivates enterprises to actively increase R&D investment, especially when the enterprise is led by a CEO with long-term orientation (e.g., a CEO with a longer tenure or a technology background). Further analysis shows that the above conclusions only hold true for private-owned enterprises. Overall, this research provides evidence that negative attainment discrepancy scope is an important but unexplored antecedent of enterprises' R&D investment, thus providing more nuanced insight into the relationship between negative attainment discrepancy and corporate R&D decisions.

The Two Blades of the Scissors: Performance Feedback and Intrinsic Attributes in Organizational Risk Taking

We draw on the behavioral theory of the firm and prospect theory to examine how performance feedback (decision context) and the characteristics of the alternatives (decision content) that decision makers face jointly determine organizational risk-taking choices. While the behavioral theory of the firm has identified performance feedback’s important role in driving organizational risk-taking decisions, it has not considered the intrinsic attributes of alternatives, specifically the magnitude and likelihood of their outcomes, which have been the focus of prospect theory. We argue that these two attributes play a key role in decision makers’ assessment of alternatives, but because achieving organizational goals is the prime objective in organizations, performance feedback drives how decision makers process information regarding these attributes. Analyzing 23,895 fourth-down decisions from the U.S. National Football League, we find that decision makers weigh attainment discrepancy and the magnitude and likelihood of outcomes in their choices, depending on deadline proximity. Furthermore, the size and valence of attainment discrepancy modify the weight of the magnitude and likelihood of outcomes in risky choices. Our arguments and findings suggest extensions to the behavioral theory of the firm and imply modifications to prospect theory when applied to the organizational context.

Why are newly established Internet loss-making enterprises always willing to expand overseas rapidly: blocking competitors or seeking opportunity

PurposeMany newly established Internet loss-making enterprises (NEILEs) are always willing to expand overseas within a very short time from their establishment. This phenomenon is becoming a hot research area. This paper aims to explore why these enterprises are always willing to expand overseas rapidly even if they are facing severe and persistent losses, and to study the different rapid internationalization modes and the international market entry ways for NEILEs.Design/methodology/approachThis paper constructs a theoretical framework with the dual situation of negative attainment discrepancy and advantageous slack resources to explain the rapid internationalization of NEILEs. Furthermore, cross-case comparative analysis method, based on interviews, questionnaires and secondary data collection, is adopted to reveal the rapid internationalization modes and the international market entry ways of such enterprises.FindingsWhether blocking competitors or seeking opportunities or both, NEILEs' goal of rapid internationalization depends on the severity and persistence of negative attainment discrepancy. When the severity and persistence of negative attainment discrepancy are very significant, moderate and mild, NEILEs choose sniper-type, opportunity-type and dual-type internationalization target mode in turn; it is very important for NEILEs to match advantageous slack resources and international market entry ways to achieve specific internationalization goals.Research limitations/implicationsThis paper enriches the understanding of NEILEs' transnational entrepreneurial behavior in the era of digital economy. The theoretical contribution of this paper is that the authors build a theoretical framework based on the logical starting point, the logical fulcrum and the logic ending point for understanding the rapid internationalization of NEILEs.Practical implicationsThis study demonstrates that NEILEs can also expand into foreign markets according to their own characteristics. Undoubtedly, they need to choose appropriate internationalization target mode and international market entry way in line with the extent and duration of their losses, and their advantageous slack resources.Originality/valueIn this paper, the authors construct the rapid internationalization theory of NEILEs based on the dual situation of negative attainment discrepancy and advantageous slack resources in digital economy era. Moreover, the authors discover the behavioral characteristics and patterns of NEILEs' transnational entrepreneurship.

Enter New Territory at the Last Minute?: Performance Feedback, Deadline Proximity, and VC Investment

We explore how a firm’s performance feedback and deadline proximity jointly affect its risk-taking behaviors. Using the context of venture capital (VC) investments in target ventures in unfamiliar sectors as an indication of risk-taking behavior, we find that VC firms with positive attainment discrepancy to their social aspirations are less likely to invest in targets in an unfamiliar sector, whereas those with negative attainment discrepancy are more likely to invest in such targets. However, the effects of VC firms’ positive/negative attainment discrepancy on new market entry become stronger when VC funds are near maturity. Our empirical study using a population of VC investments in the U.S. between 1990 and 2018 corroborate these findings.

Internationalization speed and firm innovation: the moderating roles of negative attainment discrepancy and state-ownership

PurposeThis paper aims to investigate the moderating roles of negative attainment discrepancy and state ownership in the relationship between internationalization speed and firm innovation.Design/methodology/approachPanel fixed-effects regressions model was applied to test the influence of internationalization speed on firm innovation using data collected from Chinese listed companies between 2003 and 2017.FindingsThe internationalization speed can positively promote firm innovation. Moreover, negative attainment discrepancy enhances the effect of internationalization speed on firm innovation. The effect of negative attainment discrepancy on internationalization speed and firm innovation performance is more positive in state-owned firms than in non-state-owned firms.Research limitations/implicationsA suitable time of internationalization speed to affect firm innovation is obtained.Practical implicationsThis paper suggests that decision-makers should set an appropriate aspiration to internationalize firms and increase firm innovation. Moreover, state-owned enterprises should pay attention to negative attainment discrepancies.Originality/valueThe study revealed the boundary conditions of negative attainment discrepancy and state ownership on the relationship between internationalization speed and firm innovation, contributing to the theoretical advancements in internationalization speed.

The influence of time, contracts, and audience on investment decisions in Major League Baseball

Attainment discrepancy (AD) studies emphasize situations where management believes options exist to raise performance over aspirations, or where low performance makes survival the relevant aspiration level. Sometimes organizations face performance sufficiently below aspirations that achieving aspirations in the time available becomes unreasonable, even though survival is not at risk. We develop hypotheses regarding the influence of negative AD on investment decisions in such situations, and how time pressures and alternative forms of performance pressure may moderate the influence of negative AD on investment. Using Major League Baseball game data from 2007 to 2016 and measuring investment by use of rookies yields the following results. First, negative AD increases investment. Second, the effect of negative AD on investment increases as time remaining to raise performance above aspirations declines. Third, the final year of a manager’s contract (a second indictor of time remaining to improve performance) and home game attendance (an alternative indicator of performance pressure) diminish the influence of negative discrepancy on investment.

Keeping nice in check: When a nice CEO is not so nice for the firm

In this study we argue that agreeableness, a personality trait that describes a set of behavioral patterns associated with getting along with others including compassionate, polite, and nice behaviors, is an important determinant of CEO decision making and subsequent firm performance. We use self-reported CEO agreeableness from 141 CEOs collected in partnership with an internationally recognized personality assessment firm to show that CEO agreeableness positively influences firm performance and that this relationship is weakened/strengthen by external and internal contexts of the organization. Our models show that technologically intensive industries weaken the relationship between agreeableness and firm performance while positive attainment discrepancy strengthens that relationship. Supplemental qualitative interviews from 10 top executives support our findings.

Do attainment discrepancy and slacks moderate the relationship between board characteristics and level of sustainability disclosure?

Disclosure of sustainability practices has become vital for organizations to secure their image as legitimate corporate citizens in society (Panjaitan, 2017). It might be influenced by the board of directors subject to the performance and resource availability. The prime objective of the paper is to investigate the association between board characteristics and a level of sustainability disclosure with the moderating role of performance gap and resources. Secondary data was obtained from 174 non-finance firms representing 16 sectors of the Colombo Stock Exchange (CSE) over 2016–2020. The study used 13 board characteristics and 7 controlling variables. According to the results of ordered logistic regression, board size and audit committee size have a significant impact on the degree of sustainability disclosures. At the same time, female directors displayed a significant adverse effect on such disclosures. It was found that resource availability significantly impacts the relationship between board characteristics and sustainability reporting. The study contributes to the extant literature by filling an empirical gap in the area by encapsulating a more comprehensive sample, using a broader theoretical perspective and a wide measurement to capture sustainability disclosure. The study findings are predicted to have extensive managerial ramifications in strengthening corporate governance mechanisms to elevate sustainability disclosure

Attainment Discrepancy Level, Firm Resources Slack, and Sticky Cost

The aim of this study is to further develop the behavioral theory of the firm into the context of sticky cost research. The company’s actions in managing resources can be explained through the concept of attainment discrepancy level and resource slack in the behavioral theory of the firm explaining the company’s sticky costs. This study also examines the effect of attainment discrepancy levels, both historical and social, on cost behavior between slack dimensions and overall slack. To examine it, this study used 2,416 observations data from 302 companies listed on the Indonesian Stock Exchange during 2009-2017. Using Eviews 10, the estimation results of the regression model based on HAC find that the attainment of discrepancy level and resource slack affects sticky costs. Specifically, this study found that historical attainment discrepancy level causes sticky cost behavior to decrease, whereas social attainment discrepancy level increases cost behavior to become more sticky cost. The effect of resource slack on sticky cost behavior is reduced, both for each slack dimension and for the overall slack. Furthermore, the results show that the existence of certain types of slack, namely unabsorbed slack, increases the company’s sticky cost behavior when it is associated with historical attainment discrepancy levels. To sum up, these results indicate that the firm makes internal business processes as the focus of attention in managing the company’s resources. As a consequence, this situation can be used as an alternative explanation for the company’s asymmetric cost behavior.

Corporate social performance aspiration and its effects

In recent years, amid various social and environmental problems, companies have been urged to engage more extensively in corporate social responsibility activities, particularly in stakeholder-oriented countries. Previous studies have made inconsistent findings about how firms respond to feedback about their social performance. Drawing on insights from the behavioral theory of the firm, we propose that in stakeholder-oriented countries such as Japan, firm executives are likely to set corporate social performance aspirations by comparing their own corporate social performance with that of their industry peers, and these aspirations in turn drive different corporate social responsibility behaviors. Employing a sample of Japanese listed firms, we find a U-shaped relationship between negative attainment discrepancy in corporate philanthropic performance aspiration and corporate philanthropic expenditure, but no relationship between negative attainment discrepancy in corporate environmental performance aspiration and corporate environmental expenditure. We also find a linear relationship between positive attainment discrepancy in corporate philanthropic/environmental performance aspiration and corporate philanthropic/environmental expenditure. Our empirical results further show that the above effects would change depending on whether or not the firm attains its financial performance aspirations. Our study contributes to the literatures of corporate social responsibility and organizational aspiration.

Attainment discrepancy and investment: Effects on firm performance

Although the behavioral theory of the firm posits that performance shortfalls trigger problemistic search, the actual performance consequences of problemistic search remain an open question. We argue that certain cognitive, affective, and behavioral mechanisms triggered by performance shortfalls make managers more aware, attentive, motivated, and disciplined, resulting in adaptation, learning, and enhanced firm value. Furthermore, differences in the extent to which managers feel pressured to adapt, and have the ability to adapt, can shape managerial awareness, motivation, and capability, and hence firm value. Our empirical analysis, using data for a sample of US manufacturing firms (1994–2013), confirms that problemistic search enhances firm value, and this association is strengthened when firms face greater pressure to adapt or have a greater ability to adapt.