Performance Aspiration Gap, Managerial Discretion and Enterprise Competitive Strategy

Abstract

Abstract: Based on the perspective of firm behavior theory, this paper uses Chinese private listed companies during 2007-2018 as research samples, and analyzes the effect of relative performance (that is performance aspiration gap) on enterprise competitive strategy as well as the moderating effect of managerial discretion on the aforementioned relationship. The results show that the performance aspiration deficit has a positive impact on the enterprise differentiation strategy; and the performance aspiration surplus has a positive impact on the enterprise low-cost strategy. Further research shows that with the increase of organizational redundancy, the positive influence of performance aspiration deficit on enterprise differentiation strategy strengthens, while the positive influence of performance aspiration surplus on enterprise low-cost strategy weakens. Simultaneously, the weakened positive influence of both performance aspiration deficit on enterprise differentiation strategy and performance aspiration surplus on enterprise low-cost strategy arise with the increase extent of organizational inertia. According to this paper, it is sufficiently manifested that the enterprise competitive strategy is not only enslaved to the direction and amount of performance aspiration gap but also further controlled by organizational redundancy and inertia.

Key words: performance aspiration deficit, performance aspiration surplus, management discretion, differentiation strategy, low-cost strategy

Li Zhiyuan, Zhong Xi, Chen Weihong. Performance Aspiration Gap, Managerial Discretion and Enterprise Competitive Strategy[J]. Management Review, 2022, 34(9): 285-296.

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