posits the model is exactly as fitted by Lant.^39 There is a significant constant that is
greater than zero, a significant, positive coefficient on past aspiration, and a signif-
icant, positive coefficient on past performance. Once again, the control variable for
the conversion of units indicates that this population should have a higher intercept.
To examine profitability goals, we used 89 observations on goals for the profitabil-
ity of individual units (Exhibit 26.4). Once again, a logarithmic transformation was
done for distributional reasons. In this estimation as with that for revenues, the
model is as estimated in previous work: The results indicate a significant, positive
constant, a significant, positive effect from past aspiration, and a significant, posi-
tive effect from past performance.
We believe that this evidence that adaptive aspirations characterize all sides of the
balance sheet indicates how pervasive a phenomenon the process represents. Fur-
thermore, given that a large number of different measures at sites in different loca-
tions around the world have displayed outcomes consistent with an adaptive process,
we feel confident in concluding that the phenomenon is quite pervasive, at least in
this one organization.
(d) Adaptive Aspirations at the Boundary and in the Technical Core. The last of the
preliminary analyses reported here concern different locations in the organization in
terms of whether they are in the organization’s technical core or in the boundary span-
ning unit.^40 Specifically, we are interested in how these different locations might af-
fect whether aspiration levels would follow the adaptive process we have discussed.
Proposition 2.1 of Thompson^41 summarizes the basic argument: Organizations seek
to seal off their technical cores from environmental influences. They do this by sur-
rounding the technical core with input and output components, smoothing input and
output transactions by buffering and leveling, adapting proactively to anticipated en-
vironmental fluctuations, and rationing to handle unanticipated environmental fluctu-
ations. Quite simply, the technical core is the part of the organization where uncer-
tainty is purposely minimized and the contingencies that adaptive aspirations are
designed to handle are intentionally moved away by design of task and structure. The
26 • 10 DYNAMIC PERFORMANCE MEASUREMENT SYSTEMS FOR A GLOBAL WORLDMeasure:Quarterly goals for profitability stated in local currency.
Data:89 usable observations were obtained.
Predictor Variable Coefficient
Constant .251
Log of Previous Aspiration Level .725
Log of Previous Performance Level .198*
p < 0.05 **p < 0.01
Restated Model:
LogGoalt= .251 + .923 LogGoalt–1+ .198 (LogPerft–1– LogGoalt–1)
Exhibit 26.4. Goals for Profits.
(^39) Lant, 1992.
(^40) Thompson, 1967.
(^41) Id., p. 19.