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Management International Review

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24.01.2017 | Research Article

Understanding ‘Misfits’: Aspirations and Systematic Deviations from Firm-Specific Optimal Multinationality

verfasst von: K. Skylar Powell

Erschienen in: Management International Review | Ausgabe 4/2017

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Abstract

Transaction cost and internalization theory predicts that there are firm-specific optimal levels of multinationality, and deviations from firm-specific optimal multinationality should decrease performance. However, one important unanswered question is why some firms continuously deviate from their firm-specific optimal levels of multinationality. In this conceptual analysis, I argue that continuous deviations from firm-specific optimal levels of multinationality can be explained by decision-makers’ use of aspirations. Specifically, if a firm deviates from its optimal level of multinationality and performance decreases, but aspirations are still being met, decision makers will not perceive a problem and will not engage in search processes to identify and implement changes that align the firm with its optimal level of multinationality. In addition, decision makers in smaller firms may respond to shortfalls between aspirations and actual performance with greater rigidity. Additionally, narcissistic decision makers, and decision makers who are highly accountable to external audiences, may retrospectively revise aspirations in the face of shortfalls in actual performance.

Vorheriger Artikel Transnationality and Financial Performance in the Era of the Global Factory

Nächster Artikel Relationship with Headquarters and Divestments of Foreign Subsidiaries: The Hysteresis Perspective

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Titel: Understanding ‘Misfits’: Aspirations and Systematic Deviations from Firm-Specific Optimal Multinationality
verfasst von: K. Skylar Powell
Publikationsdatum: 24.01.2017
Verlag: Springer Berlin Heidelberg
Erschienen in: Management International Review / Ausgabe 4/2017
Print ISSN: 0938-8249
Elektronische ISSN: 1861-8901
DOI: https://doi.org/10.1007/s11575-017-0310-6

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