Stretch Goals, Factual/Counterfactual Reflection Strategies, and Firm Performance

Abstract

Popular business press and academic publications have advocated for stretch goals, particularly to enhance firm performance. The general assumption is that stretch goals can create a more challenging task environment that upsets complacency, inspires motivation, encourages outside-the-box thinking, stimulates search and innovation, and guides efforts and persistence. Surprisingly few systematic empirical studies have been conducted to support stretch goal deployment, such as when and how to use them. This study introduces two reflection strategies – counterfactual reflection (managers confront performance feedback and create possible alternatives) and factual reflection (managers analyse their own decisions and explain performance feedback) – and uses two experimental laboratory studies to test how different reflection strategies contribute to the stretch goal-performance relationship. The results indicated that using stretch goals does not affect firm performance, although theoretically, using stretch goals can create a more challenging task environment and enhance performance. Rather, it is the combination of the type of goal and reflection strategy that affects performance. I suspect that under stretch goals, managers may be unable to implement new ideas as expected, leading to growing performance gaps and perceived continuous failures over time. Consequently, their motivation to search for alternative solutions declines, and they may fall into a spiral of self-constrained thinking. The results demonstrate that under stretch goals, managers use factual reflection strategies to deliberately reflect on performance feedback to achieve higher performance. In contrast, managers who are assigned moderate goals perform better if they use a counterfactual reflection strategy. I suggest that by using a different reflection strategy, managers can further improve performance by encouraging directed search behaviour and avoiding self-constrained thinking spirals. My study provides a richer theoretical and empirical appreciation of the effect of reflection strategy depending on the task environment and goal-setting.

Investigation of the Effects of Knowledge Management on Organizational Performance Through Human Resource Management as Mediator

Business Perspectives and Research, Ahead of Print.
This research seeks to examine and distinguish the factors influencing empowerment and exertion of knowledge management along with the effect of knowledge management on organizational performance. In addition, this paper investigates human capital as mediator between the relationship of knowledge management and organizational performance. The conceptual model was extended based on the literature review. The primary data were gathered using a questionnaire comprising 48 questions distributed to the personnel of all branches of one of the largest private banks in Iran. Three hundred sixty-one questionnaires were randomly distributed among the personnel, and 334 questionnaires were answered. The gathered data were examined through SPSS and SMART PLS. The results demonstrated the positive impacts of variables including structure, organizational technology, strategy, culture, and trust on organizational knowledge management under study. Moreover, knowledge management directly affects the performance of the organization and through human resource management as mediator. This study motivates the managers and personnel to exploit the accessible organizational assets for enhancing knowledge management practices as well as human resources as the most exquisite organizational capitals.

The gap between entrepreneurial behaviour and entrepreneurial identity: A case for ethnographic and autoethnographic methods

The International Journal of Entrepreneurship and Innovation, Ahead of Print.
I argue that increased use of ethnographic methods and autoethnographic methods can help bridge the gap between entrepreneurial identity (EI) and entrepreneurial behaviour (EB) in entrepreneurship research and give theoretical weight to the concepts. The disconnection between EI and EB is caused by the inability to answer questions about how EI impacts EB. Using ethnographic methods allows for a fuller depiction of the social context in which entrepreneurs operate, demonstrating the relationship between EI and EB. However, EB remains practically defined and theory about EI is borrowed from other various other literatures, such as sociology, importing the problems as well as the benefits. I argue that the use of autoethnographic methods, researching EI–EB from the entrepreneur's perspective, produces data that can be used to build theory that maintains the practical tilt of entrepreneurship research and addresses its theoretical shallowness.