If aspirations adapt quickly to the level of past performance, or even exceed this
level due to optimism, then decision makers will be in a failure decision context
most of the time. This suggests a high level of risk taking but also actions influ-
enced by psychological forces such as escalation of commitment and external at-
tribution. If aspirations adapt slowly to performance feedback, however, a success
decision context results. This suggests a low level of risk taking and psychological
forces such as internal attributions and complacency in the belief that success will
continue.
We suspect that the role of aspirations as a framing mechanism for organizational
decisions is quite broad. We see the impact of this variable on both decision-maker
cognition and the behavior of organizational systems. In terms of cognition, the use
of aspirations to code performance outcomes as positive or negative serves a cogni-
tive simplification function.
By allowing decision makers to code performance as satisfactory or not satisfac-
tory, aspiration levels simplify the decision-making process. Not only does this sim-
ple categorization of performance outcomes provide frames of reference, but these
frames of reference may cue certain schemas in the minds of decision makers that can
influence their choices in a wide variety of ways.^32 Cognitive schemas and associated
responses are cued through a process of categorizing situations. Certain schemas are
linked with certain types of situations. Given the prevalence of categorizing situa-
tions as successes or failures, decision makers are likely to have developed schemas
for responding to success situations and failure situations. Thus, performance relative
to aspiration serves to elicit an array of responses associated with either success or
failure.
In terms of the impact of aspirations on organizational systems, we suspect that as-
pirations serve to both absorb actual variations in performance and to motivate orga-
nizational participants. Because aspirations adapt to actual performance, large aspi-
ration–performance discrepancies will be tempered by the fact that target levels of
performance move toward actual performance outcomes. Furthermore, to the extent
that aspiration formation is optimistic, organizations will frequently find themselves
with negative performance gaps that motivate continued effort. As a result of these
two systemic effects, we would expect to observe patterns of organizational action
that are relatively consistent over long periods of time.^33 Lant and Mezias^34 have
demonstated this effect in simulation studies. They also show how large changes in
organizational action can occur in organizations characterized by adaptive aspirations
when significant environmental changes occur.
26.3 A FIELD STUDY OF ADAPTIVE ASPIRATIONS. As our review of the literature
on behavioral theories of organizational learning has indicated, there are many inter-
esting questions of importance that remain open. In particular, we believe there has
been a real shortage of field work to examine the processes by which organizations
exhibit the behaviors that have been the focus of models of organizations as experi-
ential learning systems.
In the next section, we illustrate some of the complex dynamics that may emerge
26 • 6 DYNAMIC PERFORMANCE MEASUREMENT SYSTEMS FOR A GLOBAL WORLD(^32) Lant, 1992; Milliken and Lant, 1991.
(^33) Tushman and Romanelli, 1985.
(^34) Lant and Mezias, 1992.