TY - GEN
T1 - Encoding and decoding aspiration information
T2 - 53rd Conference of the Operational Research Society 2011, OR53
AU - Liu, Yan Emma
AU - Sunny Yang, Shu Jung
PY - 2010
Y1 - 2010
N2 - We study the impact of competition on firms' aspiration setting and adjustment. Two related mechanisms in firm cognitive frameworks are considered in this work: making sense of (i.e. decoding) and giving sense of (i.e. encoding) aspiration information. Grounded in competitive dynamics research, a theoretical model is developed to further explore the closed-loop system of the decoding and encoding mechanisms. The simulation experiment results show that the competitive perspective completes the conventional wisdoms. The analysis derives three new managerial insights: 1) the firm with high aspirations may not decode information comprehensively, which is detrimental to its performance in competition; 2) the firm can act aggressively to diminish the dysfunction of high aspirations; and 3) the firm is able to deliberately encode public signals to manipulate rivals' understanding on competitive pressure, seducing them to take inappropriate actions in pursuit of its improved performance.
AB - We study the impact of competition on firms' aspiration setting and adjustment. Two related mechanisms in firm cognitive frameworks are considered in this work: making sense of (i.e. decoding) and giving sense of (i.e. encoding) aspiration information. Grounded in competitive dynamics research, a theoretical model is developed to further explore the closed-loop system of the decoding and encoding mechanisms. The simulation experiment results show that the competitive perspective completes the conventional wisdoms. The analysis derives three new managerial insights: 1) the firm with high aspirations may not decode information comprehensively, which is detrimental to its performance in competition; 2) the firm can act aggressively to diminish the dysfunction of high aspirations; and 3) the firm is able to deliberately encode public signals to manipulate rivals' understanding on competitive pressure, seducing them to take inappropriate actions in pursuit of its improved performance.
KW - Aspiration
KW - Competitive dynamics
KW - System dynamics
UR - http://www.scopus.com/inward/record.url?scp=84887844577&partnerID=8YFLogxK
M3 - Conference contribution
AN - SCOPUS:84887844577
SN - 0903440490
SN - 9780903440493
T3 - OR53 Keynotes and Short Papers - 53rd Conference of the Operational Research Society 2011
SP - 65
EP - 69
BT - OR53 Keynotes and Short Papers - 53rd Conference of the Operational Research Society 2011
Y2 - 6 September 2011 through 8 September 2011
ER -