Purpose: The question of how the firm responds to performance feedback forms the backbone of the behavioral theory of the firm. Although the literature works with goals aspirations and additional determinants of a firm’s search activity – proximity to bankruptcy and slack resources – the...

Purpose: A firm will respond to performance feedback, i.e. a comparison of its current performance with the goals to which it aspires, by means of changes in its search activity. There is an emerging body of literature that studies how such behavioral responses are...