Pre-submission Final Oral Presentation: Pengcheng Ma

Multiple Performance Aspirations and Problematic Search of Firms by Pengcheng Ma

Pre-Submission Final Oral Presentation by Pengcheng Ma


Date and time: 9:45am-11:45am (Canberra time), Thursday 8th June

Location: RSM Seminar Room 1106, Level 1, Copland Building 24

Chair of the Session: Associate Professor Patrick J.N. L'Espoir Decosta 

*Please note: This presentation will be run hybrid with one external supervisory panel member joining via Zoom.



Behavior theory of the firm (BTOF) is considered one of the most important theories that exerts a wide and deep impact on strategic management and organization theory. BTOF points outs that managers' attempts to improve the organization do not happen continuously; rather, they are raised by the current problem of the organization. Despite a considerable impact and wide applicability, BTOF and aspirations also attract some criticism. One of the main voices of criticism is that the formation of aspiration is considered to be automatic. To be specific, scholars argue organizations could have more than one aspirations given the complexity of their internal of external operations. In addition, the construction processes of aspiration are not the same for different organizations considering their heterogeneous internal structure and external environments. Besides, the role of limited rationality has not been fully realized since previous studies paid little attention to the cognitive process in the performance feedback model. Motivated by mentioned issues, this thesis wants to give a detailed exploration of multiple aspirations formation processes by considering the firm heterogeneity and managers' cognitive bias.

Study 1 argues that managers’ allocation of attention to multiple social reference groups is related to the extent of their identification with these social reference groups. Taking the BG affiliates as the research objects, this study examines the effect of performance feedback on strategic change with a focus on internal social comparison in a business group context. I argue that group affiliates are more responsive to internal social comparison with group peers than to external social comparison with industry peers. However, the salience of internal social comparison is subject to institutional contingencies. I test these arguments using panel data from 1449 group affiliates in China during the period 2005–2012. I find that internal social comparison has a greater effect on a group affiliate’s strategic change than does external social comparison. Moreover, this effect differential is smaller in groups located in regions with more developed market institutions but larger in state-owned groups and groups managed by internally promoted CEOs.

Study 2 presents a multi-layered conceptualization of Liability of Foreignness (LOF) by distinguishing two different types in a nested structure - undifferentiated LOF (uLOF) at the host country level and differentiated LOF (dLOF) at the home-host country dyad level. Typically, I argue that foreign firms engage in performance comparison with nested social reference groups which triggers strategic change, while the salience of these reference groups depends on the sources of the corresponding type of LOF. Specifically, social comparison with an all-foreign-peer reference group is more salient when host country formal and informal institutions heighten undifferentiated LOF, while social comparison with a home-peer-only reference group becomes more salient as home-host formal and informal institutional distances increase differentiated LOF. I tested these ideas using a panel of 11,863 foreign firms operating in China during an eight-year period (1998-2006) of intensifying local competition and significant regulatory change. My analysis results support the hypothesized nested social comparison effects, and the moderating effects of host country formal and informal institutions and home-host informal institutional distance. 

Study 3 predicts that CEOs would possess their leadership aspiration driven by self-interest. Previous BTOF literature generally assumes that CEOs are good problem-solvers for firms while seldom notice the fact that CEOs have the motivation to pay attention to their self-interests. This study wants to advance BTOF literature by exploring whether and how CEOs form their aspirations based on their career concerns in the assessment process. Typically, I argue that CEOs are likely to take the performance of the prior CEO in the same firm as the aspiration and react with R&D search. Performance below leadership aspiration means serious negative consequence for CEOs’ interests which makes the CEOs increases R&D intensity. And the role of leadership anchor is moderated by several factors that influence the information asymmetry such as previous CEO tenure, current CEO interlocks and inconsistent performance feedback.

In sum, the mentioned studies deal with the automatic view of aspiration by emphasizing the role of multiple aspirations. They reveal that the aspirations could be multiple and formation of aspiration is influenced by several factors, such as organizational structure, institutional environment, and cognitive bias. In addition, they also suggest that firms not form the automatic way to constitute the aspirations but use several underlying logics such as organizational identification and anchoring effect.


View Pengcheng Ma's bio here

Event Details

Start Date
End Date
RSM Seminar Room 1106, Level 1, Copland Building 24