The role of executive social comparison orientation in the behavioral theory of the firm

Abstract

The Behavioral Theory of the Firm (BTOF) explains the processes with which firms set aspirations, evaluate firm performance relative to those aspirations, and change their strategies in response to attainment discrepancies. While foundational work acknowledged the important role of firms’ executives, few papers have theorized and studied when and how they matter. This is remarkable, considering that the BTOF’s processes require cognitive efforts, including retrieving external information and interpreting feedback, in which executives will likely differ. At the same time, scholars have raised their concerns on contrasting findings reported by prior research. Extending and testing theory on the role of executives through consideration of their individual attributes and biases may help bring reconciliation. This symposium showcases four studies, aiming to facilitate knowledge sharing and discussions on the role of executives in the BTOF. This symposium aspires to appeal to behavioral strategy researchers and other scholars interested in understanding how cognition shapes strategic decision-making.