Striving toward the Future: Aspiration-performance Discrepancies and Planned Organizational Change

Interest has been growing in understanding how organizations’ aspiration levels affect their planning for future organizational change. Previous research did not specify whether organizations were using direct competitors or other comparable organizations as referents for forming their aspirations. In this study, we argue that organizations form their social aspirations based on two types of interorganizational comparisons: competitive and striving. In competitive comparisons, an organization compares its current performance against that of its current direct competitors. When relative performance is poor, these organizations plan more extensive and more radical change. However, we show that organizations that are performing well relative to competitors do not necessarily become inertial, as theory suggests. Rather, organizations engage in striving comparisons by comparing their current performance against the performance of organizations to which they strive to be like in the future. Our analyses show that organizations with large striving discrepancies are driven to more extensive and more radical change, even if they are performing well compared to current competitors. We examined this interplay between competitive and striving discrepancy in explaining organizational change on a sample of 131 AACSB accredited business schools.