Encompassing forward-looking determinants in the attention-based view of aspiration formulation

Abstract

We investigate the relative attention between forward-looking factors and backward-looking factors in organizational aspiration formulation. Our arguments are based on the three principles of the attention-based view (ABV) and the idea that organizational attention is shaped by decision-maker concerns about sustaining legitimacy vis-à-vis stakeholders. By analyzing data from a multicountry, multi-industry survey of 541 firms, we find that forward-looking factors generally garner more attention than backward-looking factors in formulating aspirations. We also find that competitive turbulence is negatively associated and strategic aggressiveness positively associated with relative attention to forward-looking over backward-looking factors. Overall, we contribute novel theory to the emerging ABV of aspiration formulation by developing a theory of relative attention—explaining why and when decision-makers allocate more attention to forward-looking over backward-looking factors, and how this balance shifts across contextual contingencies.

JEL Classification: L21

Keywords

aspiration formulation organizational goal setting attention-based view legitimacy forward-looking logic behavioral theory

1. Introduction

Organizational aspirations, defined as the desired performance levels (e.g. 10%) for specific goal dimensions (e.g. return on assets or sales growth rate), exhibit important influence on a broad range of organizational behavior and have been widely investigated (e.g. Aguilera et al., 2024; Bromiley, 1991; Ouakouak, 2018; Shinkle, 2012). Yet, numerous scholars have lamented that despite the prevalence of aspirations in organizations, the process of aspiration formulation is not well understood (Berchicci and Tarakci, 2022; Shinkle, 2012; Short and Palmer, 2003). Prior studies on aspirations predominantly rely on the propositions in the behavioral theory of the firm (BTOF) (Cyert and March, 1963). Grounded in the assumption of bounded rationality of organizational decision-makers, BTOF suggests that aspiration formulation is experience-based; thus the determinants of aspirations are backward-looking—for example, the organization’s prior year performance (e.g. Washburn and Bromiley, 2012). However, some limited research in the broad aspiration literature has begun to question the backward-looking assumption by indicating that not only backward-looking but also forward-looking factors such as expectations may receive decision-maker attention in some, albeit limited, situations (e.g. Chen, 2008)—yet, little is known about why and when this will happen in the aspiration formulation process (for an exception, see Shinkle et al., 2021).

The traditional behavioral aspiration model assumes adaptive behavior in relatively stable and slowly changing environments (Cyert and March, 1963). Yet, the contemporary business context—with high market dynamics, stakeholder pressure, technology change (e.g. artificial intelligence), and grand societal challenges—may logically prompt managers to anticipate rather than merely anchor on the past. Such anticipatory logic calls into question whether backward-looking attention alone adequately explains organizational aspiration formulation. We contend that forward-looking attention is not only conceptually distinct from backward-looking attention but practically vital: it reflects the use of anticipatory logics based on forecasted expectations, perceived threats, and potential opportunities. Ignoring this forward-looking attention therefore likely leads to mis-specified models that fail to capture key drivers of aspirations. Given that aspirations motivate salient organizational outcomes such as, financial performance, innovation, risk taking, and even unwanted outcomes like corruption (e.g. Greve, 1998; Iyer and Miller, 2008; Shinkle, 2012)—it is thus imperative to expand theory on organizational aspiration formulation to better reflect the influence of forward-looking as well as backward-looking attention.

To build theory on why forward-looking and backward-looking factors receive more or less attention in aspiration formulation, we draw upon the attention-based view (ABV)—the ABV of the firm (e.g. Joseph et al., 2024; Ocasio, 1997, 2011) and legitimacy perspectives it encompasses (e.g. Luo and Tang, 2022; Suchman, 1995; Suddaby et al., 2017). The ABV is salient in three primary ways. First, the emerging ABV of aspiration formulation (see related work in Berchicci and Tarakci, 2022) extends behavioral work to examine the attention allocated to various aspiration determinant factors (e.g. Blettner et al., 2015; Hu et al., 2017). Second, the ABV provides foundational theorizing for the cognition of organizational decision-makers that is requisite for forward-looking attention (Hoffman and Ocasio, 2001; Levinthal and Rerup, 2006). Third, the ABV acknowledges that decision-makers’ legitimacy concerns vis-à-vis stakeholders shape organizational attention (Hoffman and Ocasio, 2001; Ocasio, 1997, 2011). Recently, the idea that legitimacy concerns influence aspiration formulation has emerged in the literature but remains understudied (e.g. Shinkle et al., 2019). We therefore establish our hypotheses utilizing the insight that decision-makers take into account the expectations of stakeholders (e.g. Freeman, 1984; Mitchell et al., 1997), such as regarding legitimate organizational behavior, and that the frame of reference for legitimacy judgments is conditional on the social context (Bitektine and Haack, 2015; Deephouse et al., 2017; Suchman, 1995; Suddaby et al., 2017).

As a next step in knowledge building, we investigate the relative attention between forward-looking (anticipatory) and backward-looking (experience-based) factors as an aspiration determinant. We define this relative attention as the attention difference between forward-looking and backward-looking factors, which we abbreviate as relative attention to forward-looking factors. To provide comprehensive theorizing, our investigation adopts all three principles of the ABV (Ocasio, 1997)—focus of attention, situated attention, and structural distribution of attention—as an analytical framework. First, following the principle focus of attention, we hypothesize that organizational decision-makers direct relatively more attention to forward-looking factors than backward-looking factors when formulating aspirations. Our argument is that the contemporary business environment, which includes high social scrutiny and pressure for public disclosure (Greve and Teh, 2018; Linder and Foss, 2018), shapes the frame of reference for legitimacy judgments, such that forward-looking factors will be viewed as more legitimate. This hypothesis builds the baseline logic for our subsequent hypothesizing. Second, following the principles of situated attention and structural distribution of attention (organizational “structures” broadly include rules, resources, and strategic agendas), we chose two contextual factors for our investigation, namely environmental turbulence and strategic aggressiveness, respectively. This choice is based on their prominence in the strategic management literature, their fit with the ABV principles, and their sharp external and internal contrast that encompasses both environmental and organizational heterogeneity. Specifically, we hypothesize that competitive turbulence reduces, while strategic aggressiveness increases, the relative attention to forward-looking factors. To test our hypotheses, we utilize a multicountry, multi-industry survey of top executives at 541 firms. We find support for our hypotheses.

This research contributes by advancing novel theory on the relative attention between forward-looking and backward-looking factors into the emerging ABV of aspiration formulation (e.g. Berchicci and Tarakci, 2022; Luo and Shinkle, 2025). First, we develop novel theorizing on aspiration formulation that incorporates the three core principles of ABV. Our theorizing integrates the ABV idea that decision-makers’ legitimacy concerns vis-à-vis stakeholders shape organizational attention (Hoffman and Ocasio, 2001; Ocasio, 1997, 2011). Our novel legitimacy arguments—with the idea that social judgments (e.g. Bitektine and Haack, 2015; Suchman, 1995; Suddaby et al., 2017) matter in aspiration formulation—support the idea that decision-makers exhibit substantial levels of attention and cognitive effort in aspiration formulation and resonates with scholars who have questioned the strong cognitive constraints assumed in the traditional BTOF (e.g. Maitland and Sammartino, 2015). Our investigation responds to multiple calls for research to better understand the factors and the processes involved in aspiration formulation (e.g. Labianca et al., 2009; Shinkle et al., 2021; Washburn and Bromiley, 2012).

Second, in contrast to the predominate view of a backward-looking focus in prior work on behavioral aspirations (e.g. Greve, 1998; Iyer and Miller, 2008), we provide new insights that integrate forward- and backward-looking factors. We theorize and empirically demonstrate that decision-makers in contemporary practice focus relatively more attention on forward-looking than backward-looking factors when formulating organizational aspirations. More specifically, we argue that decision-makers view forward-looking factors as more legitimate to stakeholders. By theorizing and investigating the relative attention between forward-looking and backward-looking factors, our work advances the limited literature that acknowledges both factors in aspiration formulation (e.g. Chen, 2008; Lim, 2025; Shinkle et al., 2021). Our findings are important as they may explain a portion of the variation of results in prior studies that rely solely on backward-looking foci, and their use in future analyses may reduce error.

Third, our arguments and evidence add to the small but growing work that strives to enhance aspiration models by incorporating the influence of contexts (e.g. Berchicci and Tarakci, 2022; Blettner et al., 2015; Hu et al., 2017; Luo and Shinkle, 2025). Interestingly, we find that competitive turbulence and strategic aggressiveness play prominent but opposing roles in shaping the relative attention to forward-looking factors as they provide different frames of reference for legitimacy judgments. In making this contribution, our work responds to the neo-Carnegie call of Gavetti et al. (2007: 525) to develop “behaviorally plausible, decision-centered” perspectives on organizations including understanding of how cognitive, environmental, and intra-organizational forces influence organizational behavior.

2. Theoretical background

2.1. Backward-looking and forward-looking factors as determinants

The behavioral tradition indicates that organizational aspirations are formulated based on backward-looking factors such as past performance, past performance of comparable organizations, and past aspirations (Cyert and March, 1963). This backward-looking perspective originates from Cyert and March’s depiction of managers in the 1960s as boundedly rational, cognitively limited, satisficing, and inclined to use routines to ease decision-making. Yet, a small set of studies of aspiration-driven performance and aspiration formulation support the notion that there may be both backward-looking and forward-looking factors in play (for a review see Shinkle, 2012). For example, Washburn and Bromiley (2012: 915) theorized that managers “incorporate some form of forecasting or other predictive process when formulating aspirations.” We present exemplary aspiration studies in Table 1 which examine both backward- and forward-looking determinants (see a more detailed table in the online supplemental materials, Section A). Table 1 highlights that aspiration-driven behavior dominates the studies; importantly, we found no empirical studies on formulating aspirations using forward-looking factors, or the relative attention between forward-looking and backward-looking factors, as in our study.

Table 1.

Exemplary behavioral aspiration studies with both forward‑looking and backward‑looking considerations.

Study	Focus	Considerations	Context	Findings	Relevance
Bromiley (1991)	Determinants of organizational risk taking and future performance.	Backward: discrepancy with past firm and industry performance. Forward: analysts’ forecasts as expectations.	US manufacturing firms.	Risk taking decreases above aspiration; increases below. Aspirations increase performance, while expectations decrease performance.	Provides a foundational logic for backward-looking aspiration logic that uses analysts’ forecasts.
Gavetti and Levinthal (2000)	Cognitive and experiential processes on subsequent search.	Backward: routines (experiential learning). Forward: cognitive (beliefs of consequences).	Computer simulation.	Cognitive representations affect experiential search. Forward- and backward-looking logics should be considered jointly.	Defines dual modes of search; provides core theoretical base.
Chen (2008)	Performance feedback and performance prospect on R&D search intensity.	Backward: past performance–aspiration gap. Forward: expected performance–aspiration gap.	US manufacturing firms.	R&D shaped by both feedback and future expectations.	Demonstrates coexistence of backward and forward reference points.
Lant and Shapira (2008)	Managerial reasoning about forecasting and aspirations.	Backward: aspirations. Forward: expectations.	Conceptual/ semantic text analysis.	Managers form “performance prospects” before feedback.	Establishes anticipatory attention foundation.
Shinkle et al. (2021)	Government policy change and organizational goal setting.	Backward: past goal, past performance, and past performance of comparable organizations. Forward: anticipation of policy impact.	Conceptual with case illustration.	Extends BTOF with policy anticipation factor.	Introduces anticipatory term to aspiration models.
Lim (2025)	Multiple-goal balancing: performance versus forecasts.	Forward: performance below earnings forecasts. Backward: performance below prior ROA.	Multiunit firms in ICT sector.	Performance below prior ROA or earnings forecasts promotes new market entry; this relationship is weakened by BU performance	Provides empirical evidence for relative weighting logic.
Our present study (2025)	Attention-based theory of aspiration formulation—all three ABV principles.	Uniquely examine relative attention to forward versus backward factors. Establish novel legitimacy arguments.	Multicountry survey.	Forward attention dominates; moderated by competitive turbulence (-) and strategic aggressiveness (+).	Examines relative attention as adaptive, legitimacy-driven system within the ABV framework.

2.2. ABV and legitimacy concerns

Three principles constitute the core ideas of the ABV. The first principle, focus of attention, is that organizational decision-makers selectively focus on certain issues and answers at any given point, while also stressing that what decision-makers do depends on the issues and answers on which they focus (Ocasio, 1997). The second principle, situated attention, emphasizes that what decision-makers focus on and do depends on the situational context (Ocasio, 1997). This principle states that specific environmental aspects regulate the focus of attention and action of decision-makers. The third principle, structural distribution of attention, relates to organizational rules and resources, as well as social positions—that is, economic and social structures—that direct attention to issues and answers (Ocasio, 1997). This principle emphasizes that organizational attention is regulated by the process of complex interactions, coordination of activities, and allocation of resources within the organization. Importantly, this definition uses the term “structure” in a broad sense—for example, rules and strategic agendas structure the distribution of attention in organizations. The critical assumption underpinning these principles is that when organizational attention is focused, it “. . . allows for enhanced accuracy, speed, and maintenance of information-processing activities, facilitating perception and action . . .” (Ocasio, 1997: 204).

The ABV places legitimacy in a critical position by arguing that it shapes organizational attention (Ocasio, 1997). Ocasio’s arguments build upon a substantial literature in organization theory and sociology indicating that decision-makers strive to have their organizations, themselves, and/or their actions perceived as legitimate by relevant audiences (e.g. DiMaggio and Powell, 1983; Dutton and Dukerich, 1991). Being perceived as legitimate has long been viewed as critical to organizational survival, access to resources, stabilization of business operations, and social license to operate (e.g. Bitektine and Haack, 2015; Suchman, 1995). Legitimacy harmonizes with the well-accepted behavioral notion of the logic of appropriateness (March, 1997; March and Olsen, 2006), wherein organizational decisions are made to coincide with what social norms would view as “right” rather than following an exclusively rational calculus of consequences. More specifically explained in the ABV, decision-makers’ concerns about legitimacy vis-à-vis stakeholders, as well as consequences for lack of legitimacy, directly shape attention (Ocasio, 2011).

In our investigation, we use the term legitimate in the manner of Suchman (1995: 574): “Legitimacy is a generalized perception or assumption that the actions of an entity are desirable, proper, or appropriate within some socially constructed system of norms, values, beliefs, and definitions.” We note that the ABV perspective generally aligns with pragmatic legitimacy, with some potential overlap with moral legitimacy, as described by Suchman (1995). Importantly, the social system provides the frame of reference for legitimacy judgments—and the social system is defined by the socially constructed set of norms and values (Bitektine, 2011; Bitektine and Haack, 2015; Deephouse et al., 2017; Luo and Tang, 2022; Suchman, 1995; Suddaby et al., 2017). This perspective is what Suddaby et al. (2017) referred to as the contingency view of legitimacy, wherein each organization strives to maintain fit with their environment to sustain legitimacy with stakeholders.

3. Hypothesis development

Our analysis takes the view that the three ABV principles provide the scaffolding for a generalizable, multifactored framework as shown in Figure 1. We build our arguments on the idea that concerns about establishing and sustaining legitimacy with the organization’s stakeholders influence the focus of decision-maker attention (Ocasio, 1997, 2011). We also build on the perspective that the frame of reference for legitimacy judgments is conditional on the organization’s social context (Bitektine, 2011; Suchman, 1995; Suddaby et al., 2017).

Figure 1.

Our conceptual model of aspiration formulation.

As a theoretical foundation, we adopt three key premises regarding attention allocation that provide underpinning logic for our hypotheses. First, since aspirations (i.e. goals) are important to contemporary organizations (Meyer, 2002; Shinkle, 2012), decision-makers are expected to have a credible and socially justifiable—legitimate—rationale for aspiration decisions. While the prior literature identifies that the legitimacy of aspirations vis-à-vis stakeholders is salient (Linder and Foss, 2018; Shinkle et al., 2019), we extend this view and propose that establishing and sustaining the legitimacy of aspiration determinants is likewise salient. This premise finds support in the high social scrutiny and pressure for public disclosure of contemporary practice, wherein decision-makers are frequently required to provide an explanatory account of their aspiration decisions to analysts, shareholders, policy makers, and employees (e.g. Greve and Teh, 2018; Linder and Foss, 2018).

Second, decision-makers will allocate attention to aspiration determinants in a manner to avoid aspiration failure—thereby striving to sustain legitimacy. In aspiration formulation, failure can occur both ex ante—failing to explain the appropriateness of the aspiration level, and ex post—failing to achieve the aspiration level performance. Organizational decision-makers have long been observed to strive to reduce uncertainty, unpredictability, and failure in order to sustain legitimacy (e.g. Meyer and Rowan, 1977; Suchman, 1995). Furthermore, decision-makers typically avoid aspiration failure (Cyert and March, 1963; Joseph and Gaba, 2015). The idea of avoiding aspiration failure also has direct support in the ABV from Hoffman and Ocasio (2001) who note that decision-makers’ attention is shaped by potential attributions of accountability from external stakeholders and by concerns regarding organizational image or identity from internal stakeholders.

Third, decision-makers will make legitimacy judgments considering the general audience of organizational stakeholders when making aspiration decisions. This approach aligns with the generally expected management practice of striving to satisfy salient stakeholders (Freeman, 1984; Mitchell et al., 1997) and the more macro level of legitimacy (Bitektine and Haack, 2015). This premise enables us to develop parsimonious arguments for aspiration levels pertaining to generic goal dimensions (see future research for ideas on how to extend this premise to specific stakeholder audiences).

3.1. Focus of attention: Forward- versus backward-looking determinant factors

To establish a baseline, our first hypothesis examines the general business environment. Importantly, the contemporary business environment provides a social context that frequently, but varyingly, contains a consequential level of action by competitors as well as general environmental (e.g. consumer, regulatory) change (e.g. D’Aveni et al., 2010; Teece et al., 2016). As such, our arguments are based on a perspective that the contemporary environment is action filled and vibrant, yet with some degree of predictability (note that Hypothesis 2 is about competitive turbulence).

While accepting that decision-makers allocate attention to both backward- and forward-looking factors, we contend that more attention is directed to forward-looking factors than backward-looking factors when formulating aspirations in the contemporary environment. This is because the contemporary environment provides the frame of reference for decision-makers so that they will view forward-looking factors as more legitimate to stakeholders. Our core argument is that forward-looking factors align with what seems appropriate for the future (Nadkarni and Chen, 2014; Suchman, 1995) and with likely future developments and actions of the organization (Levinthal and Rerup, 2006; Shepherd et al., 2017). This argument finds support in the ubiquity and public discourse of performance forecasting in contemporary managerial practice (e.g. Durand, 2003; Schoemaker and Tetlock, 2016; Suddaby et al., 2017). Performance forecasting is customarily based on an understanding of history, in addition to an understanding of anticipated external stimuli, anticipated actions of external actors, and self-determined (i.e. planned) actions that are relevant to future performance (Levinthal and Rerup, 2006; Wu et al., 2014). Even though such forecasts are partially founded on prior cause–effect learning (Durand, 2003) and backward-looking factors, forecasts are based on rigorous forward-looking causal logics (Fergnani, 2022; Schoemaker and Tetlock, 2016). Accordingly, the normative practices and social expectations of performance forecasting in an action filled contemporary environment increase the legitimacy of forward-looking relative to backward-looking factors.

In addition to the arguments above, the ABV directly buttresses the idea that forward-looking factors may gain higher attention than backward-looking factors in decision-making. As Ocasio stated: “Attentional perspectives may be backward-looking, based on prior organizational experience, or forward-looking, based on cognitive knowledge of the environment” (Ocasio, 2011: 1288, emphasis added). Further, top managers “. . . have a distinct focus and perspective on action . . . driven by attentional perspectives that are, at least potentially, more forward-looking than experienced-based” (Ocasio, 2011: 1292, emphasis added). The salience of forward-looking attention has also been reinforced in subsequent ABV work, for example in examinations of opportunity and threat perceptions (e.g. Dutt and Joseph, 2019).

In summary, we argue that decision-makers view forward-looking factors as more legitimate to stakeholders and thus allocate more attention to forward-looking than backward-looking factors. This is because forward-looking factors better align with likely future developments and actions of the organization (Levinthal and Rerup, 2006; Shepherd et al., 2017) and have higher procedural conformity with the normative practice of performance forecasting (e.g. Durand, 2003; Schoemaker and Tetlock, 2016). Importantly, decision-makers will surmise that these aspects provide an explanation for aspiration formulation that is more credible and socially justifiable to stakeholders—that is, forward-looking factors are more appropriate than backward-looking factors in the action filled and vibrant, contemporary business context (cf. March, 1997). Hence, as a baseline expectation we propose:

Hypothesis 1 (baseline): Forward-looking factors garner higher attention than backward-looking factors in aspiration formulation.

3.2. Situated attention: Competitive turbulence

We examine one of the most prominent contexts that scholars have associated with the principle of situated attention—the external environment (e.g. Nadkarni and Barr, 2008). Specifically, we examine competitive turbulence wherein higher competition-driven change results in higher unpredictability (D’Aveni, 1994; Nadkarni and Barr, 2008). Competitive turbulence is well-established as salient in decision-making (e.g. Bogner and Barr, 2000; Cui et al., 2023; Danneels and Sethi, 2011) and as relevant in aspiration formulation (Berchicci and Tarakci, 2022; Luo and Shinkle, 2025).

We argue that decision-makers, when formulating organizational aspirations, ceteris paribus, reduce their relative attention to forward-looking factors as competitive turbulence increases because decision-makers will view forward-looking factors as decreasing in legitimacy to stakeholders. We contend that the unpredictability of competitive turbulence influences the norms and values of the social system that provide the frame of reference for legitimacy judgments (Bitektine, 2011; Suchman, 1995). As environments increase in competitive turbulence, the future (including opportunities and threats) becomes increasingly difficult to predict and thus forward-looking factors for aspiration formulation become increasingly error prone (Bergh, 1998; Durand, 2003)—leading them to be perceived as less legitimate. Backward-looking factors also lose fidelity as predictors of the future (Kim et al., 2015) as they increase in error with increasing competitive turbulence. However, we argue that the error will be perceived more strongly in cognitively constructed aspects such as forward-looking factors than in the readily quantified past performance outcomes of backward-looking factors, which remain evidence-based (i.e. known and reliable). This perspective aligns with Audia and Greve (2006: 88) who observed that: “decision-makers believe that their industry is highly dynamic, so that only recent performance data are valid indicators of future prospects.”

The highly error prone nature of forward-looking factors in highly turbulent environments is identified in a variety of literatures, including scenario planning (Fergnani, 2022; McKiernan, 2017), cognitive bias (Kahneman et al., 1982; Kaplan, 2011), and bounded rationality (Shin et al., 2016; Simon, 1947). As readily available alternatives to error prone forward-looking factors, backward-looking factors incorporate more reliable experiences about what has been shown to be achievable in recent times, and thus may be possible in the future (cf. Kim et al., 2015). In addition, with high competitive turbulence, it is difficult to understand and learn from the environment (Berchicci and Tarakci, 2022), making forward-looking factors that are based on the predictions of the environment more likely to be contested and viewed as less legitimate to stakeholders. Consequently, we argue that high competitive turbulence provides a frame of reference that reduces the legitimacy of forward-looking factors in comparison to backward-looking factors in aspiration formulation.

Overall, we argue that the relative attention to forward-looking factors in aspiration formulation decreases as competitive turbulence increases. This is because the frame of reference for legitimacy judgments (Bitektine, 2011) shifts as environments increase in unpredictability due to intensifying competition—such that forward-looking factors are viewed as less legitimate due to their increasing susceptibility to error in predicting future performance (Kim et al., 2015). Consequently, decision-makers will surmise that evidence-based backward-looking factors, even though imperfect, are more credible and socially justifiable to stakeholders as appropriate for the context of higher competitive turbulence than forward-looking factors (March, 1997; March and Olsen, 2006; Suchman, 1995). Hence, we propose:

Hypothesis 2: Competitive turbulence is negatively associated with relative attention to forward-looking factors in aspiration formulation.

3.3. Structural distribution of attention: Strategic aggressiveness

The ABV principle of structural distribution of attention suggests that organizations’ economic and social structures shape the pattern of decision-makers’ attention. Ocasio’s conceptualization of “attention structures” is wide-ranging as it includes rules, strategic agendas, resources, and hierarchies. More specifically, Ocasio (1997: 195) stated: “Attention structures regulate the valuation and legitimization of issues and answers, the creation and distribution of procedural and communication channels, and the interest and identities that guide decision-maker’s actions and interpretations.” Building on these ideas, we posit that strategic aggressiveness, as an organizational orientation, serves as an attention structure that regulates attention focus. This is because strategic aggressiveness is the degree to which a focal organization strives for industry leading performance (Ansoff and Sullivan, 1993; Labianca et al., 2009) and therefore provides an organizational orientation that structures the strategic agenda. Strategic aggressiveness is also mentioned as relevant to aspiration formulation (e.g. Ansoff, 1979; Keum and Eggers, 2018). Consonant with Hypothesis 2, we expect that the level of organizational strategic aggressiveness provides a frame of reference for legitimacy judgments of aspiration determinant factors.

We contend that organizational decision-makers increase their relative attention to forward-looking factors as strategic aggressiveness increases because forward-looking factors will be viewed as increasing in legitimacy to stakeholders. The more strategically aggressive organizations are, the more strongly they value performance possibilities, and the information associated with very high performance achievement (Keum and Eggers, 2018; Labianca et al., 2009; Shepherd et al., 2017). This contrasts with organizations with low strategic aggressiveness wherein continuing to maintain the current performance level is satisfactory (Ansoff, 1979). Strategically aggressive organizations desire to achieve high levels of performance relative to what is possible, as opposed to only considering what they or others have previously achieved (Labianca et al., 2009). Performance possibilities are necessarily embedded in a conceptualization of the future (Shepherd et al., 2017). We argue that these attention structuring characteristics define the norms and values of the social system that provide the frame of reference for legitimacy judgments (Bitektine, 2011; Suchman, 1995)—a frame of reference that heightens the legitimacy of forward-looking factors as strategic aggressiveness increases. Forward-looking factors gain legitimacy because they encompass the anticipated performance-enhancing actions of the organization and therefore support projections of performance, whereas the backward-looking factors lack the capacity to do so (cf. Chen, 2008). As a result, we argue that decision-makers of more strategically aggressive firms will view forward-looking factors as more legitimate to stakeholders—and these factors will thus receive more attention in aspiration formulation. This view resonates with the findings of Simons (1987) who observed that Prospector firms, in the Miles and Snow (1978) typology, direct higher attention to future forecasts than Defender firms.

Overall, we argue that the relative attention to forward-looking factors in aspiration formulation increases as strategic aggressiveness increases. Specifically, increasing strategic aggressiveness influences the frame of reference for making legitimacy judgments such that forward-looking factors are viewed as more legitimate than backward-looking factors. This is due to the organization’s orientation toward possibilities to achieve high performance and its ability to encompass the anticipated performance-enhancing actions of the organization. In other words, decision-makers will surmise that forward-looking factors are more credible and socially justifiable to stakeholders as appropriate for the context of higher strategic aggressiveness (March, 1997; March and Olsen, 2006; Suchman, 1995). Hence, we propose:

Hypothesis 3: Strategic aggressiveness is positively associated with relative attention to forward-looking factors in aspiration formulation.

4. Methods

To acquire data to test our hypotheses, we surveyed top executives responsible for strategic decision-making and goal setting in firms with more than 50 employees or over $10 million revenue (p.a.) in Australia, the United States, China, and Israel across various industries in 2015. By focusing on the key organizational decision-makers (e.g. CEOs, Managing Directors, and Strategy Directors), our study adopts a widely-held perspective that top executives, due to their responsibility, play a critical role in organizational attention (Cho and Hambrick, 2006; Eggers and Kaplan, 2009; Kaplan, 2008). Prior research has also indicated that data from top executives—who are the most likely to possess the relevant organization level knowledge—are as reliable and valid as data from multiple informants or data from objective sources (Li and Zhang, 2007; Miller et al., 1997).

Before survey administration, we conducted a series of exploratory interviews with senior executives to inform the design of the survey instrument. These interviews served a formative purpose: they clarified the conceptual boundaries of key constructs, refined the phrasing and sequencing of survey items, and ensured the content validity and managerial relevance of the measures. The interviews confirmed that executives distinguish between backward- and forward-looking considerations in aspiration formulation, thereby guiding the operationalization of these constructs in the quantitative instrument. We provide illustrative quotations and details about this process in the supplemental materials to enhance transparency regarding survey design and construct validation.

A multicountry, multi-industry sample has distinct advantages regarding generalizability. The countries in our sample exhibit divergent levels of sociopolitical dynamism (Israel vs. Australia) and economic development (China vs. the United States). In addition, our sample firms are diverse in other ways; for example, 34% of the organizations in our sample are listed on a stock exchange, 26% have some degree of foreign ownership, and 16% are fully government owned. Measures of the variables in the survey were generally based on the established scales, except as noted below, and a pilot test of the survey was administered to 27 Executive MBA students with minor modifications being made based on their feedback. To further confirm that respondents understood our items, we undertook two cognitive interviews wherein respondents talked through their thinking while responding to the survey (Willis, 2004). Informed by the qualitative interview study, the pilot test, and the cognitive interviews, we used common managerial terms in our survey rather than their academic equivalents (e.g. aspirations = performance targets or metrics). Respondents were incentivized with a managerial report of the survey results.

The samples in Australia and the United States were collected by a third-party panel of research subjects through a survey administration company; in this, we followed the approach in Long et al. (2011). The survey company did rigorous screening on job position, and then the expertise of the informants was further verified by asking respondents to indicate their knowledge with respect to setting top-level (strategic) goals, determining strategy, and the strategy implementation process on a 7-point Likert-type scale, ranging from strongly disagree (1) to strongly agree (7) (Conant et al., 1990). Respondents that rated below (4) in any one of the three areas were omitted from the analysis, and the average level of knowledge on these three areas reported in the sample is greater than (5.5). The Australian third-party sample was supplemented with responses from top executives of 38 organizations in the university alumni network. We collected the responses in Israel with the support of a bilateral international Chamber of Commerce, and the contacts in China were made through collaboration with local government agents. Translation and back-translation were implemented in the Chinese version of the survey. The Chinese sample was collected in four cities and 80% of the investigation was conducted face-to-face by a member of our research team. This approach was a means of collecting reliable and valid data in emerging economies such as China (Hoskisson et al., 2000), while in the other countries we used an online survey. Statistical differences between sampling approaches were checked with no issues identified (i.e. including dummy variables for sampling type did not influence findings, and the dummy variables were not significant at p < 0.05). Our resulting respondents self-identified and were confirmed (via business card title or third-party validation) as top managers (45%), senior managers (17%), middle managers (35%), or others (3%). To check for non-response bias, we compared the characteristics (e.g. industry and ownership) of early and late respondents (first vs. fourth quartile of 363 respondents) receiving the survey at the same time (Armstrong and Overton, 1977). The results of t-tests indicated no significant difference, reducing the non-response bias concern.

Our dataset includes 555 firms, with 528 providing full responses on all relevant variables. Following standard practice, we mean-replaced missing control variables allowing inclusion of 13 additional firms. This resulted in 201 American, 198 Australian, 98 Chinese, and 44 Israeli firms in our final sample—overall 541 firms were in our final analysis.

4.1. Measures

4.1.1 Dependent variable: Relative attention to forward-looking factors

Our organization-level investigation focuses on the relative attention to forward-looking factors. This variable (Relative forward factors) is measured as the difference in organizational attention between forward- and backward-looking factors in formulating aspirations. It is important to clarify that our interest is in the determinants of aspirations rather than the aspirations themselves. Organizational aspirations are highly idiosyncratic to specific organizations (Ansoff, 1979; Cyert and March, 1963); therefore, our analysis examines the perceived importance of reported determinants of unobserved, general aspiration decisions.

Desiring a parsimonious set of items, we measured the importance of three items categorized as backward- and forward-looking respectively—overall six items that the literature identifies as generalizable across organizations (see Appendix 1). We selected these six items based on their prevalence in the literature, their corroboration in our pre-survey interview study of top managers in Australia, and their alignment with backward- or forward-looking concepts (see the review of Shinkle, 2012). Our backward-looking items align with the key factors in Cyert and March’s (1963) behavioral theory: past performance, past performance of a specific competitor, and industry average past performance where “past” is typically viewed as the previous performance period (e.g. Blettner et al., 2023; Greve, 1998; Iyer and Miller, 2008). Our forward-looking items are: future performance expectations, problems or threats, and opportunities (e.g. Ansoff, 1979; Chen, 2008; Fiegenbaum et al., 1996). These items align with the key factors in Ansoff’s (1979) Theory of Environment Serving Organizations (notably expectations and problems) and Fiegenbaum et al.’s (1996) Strategic Reference Point Theory (notably threats and opportunities).

The measurement of managerial cognitions, such as attention, is a well-recognized research challenge (Cho and Hambrick, 2006) and the literature rarely offers scales (Gebauer, 2009). While most studies rely on letters to shareholders using frequency counts as a proxy for attention (Eggers and Kaplan, 2009; Ocasio, 2011), we directly measured the perceived importance of, as the proxy of attention on, each of the six items in our survey. This approach aligns with the conceptualization of attention in prior studies on aspirations (e.g. Berchicci and Tarakci, 2022; Blettner et al., 2015). Consequently, we take the view that the more important a factor is, the more attention it will receive—and vice versa.

Our survey question asked: How important are the following inputs to the choice of goal metrics (targets)? We also provided guidance by stating; Hint: Think about why your organization has its specific goal metrics (targets). The rating was based on a 7-point Likert-type scale ranging from not at all important (1) to extremely important (7). The questions were located together in one bank to elicit a more comparative response across the items: your past performance, performance of a specific competitor, industry average performance, future performance expectations, problems or threats, and opportunities. In this survey question, we directly asked about the importance of each item. This approach could cause concern about social desirability bias where managers tend to report responses they view as desired by social norms (e.g. strategic foresightedness) rather than what they actually think (Podsakoff et al., 2003). To reduce this potential bias, we emphasized the confidentiality and anonymity of their responses (Chung and Monroe, 2003). We further explore this potential bias in the discussion section.

We obtained the importance of backward- and forward-looking factors by averaging the scores of the three items for each backward and forward factor. Factor analysis revealed the unidimensionality of both backward- and forward-looking factors. Cronbach’s alphas were 0.66 and 0.73, average variance extracted (AVE) 0.60 and 0.65, and composite reliability (CR) 0.81 and 0.85, respectively. The Cronbach’s alpha values are not high but are in a range (above 0.60) considered adequate to conclude internal consistency, especially for newly developed scales (Nunnally, 1967, 1978). The AVE and CR exceed respective guidelines of 0.5 and 0.7 (Fornell and Larcker, 1981). For our hypothesis testing of the relative attention to forward-looking factors, we use the difference between the two factors to create the variable that we label relative forward factors.

4.1.2 Competitive turbulence

We measure competitive turbulence using a five-item perception scale, generally following the descriptions of D’Aveni (1994). The five items, each measured on a 7-point scale (with different end-point anchors) and taken from a bank of questions regarding the broad environment in the previous 3 years (2012–2014), include; competition as a cause of turbulence, competition creating a large amount of change in the environment, competition creating a radical nature of change, competition caused unpredictable change in the environment, and competition caused our organization to respond. We use the mean score of the five items. Factor analysis revealed the unidimensionality of this factor and the Cronbach’s alpha was 0.79, AVE was 0.53, and CR was 0.84.

4.1.3 Strategic aggressiveness

Following the literature (Ansoff and Sullivan, 1993; Brouthers et al., 2000), we measure strategic aggressiveness using a four-item scale, including; we strive for industry leading performance, we rarely lower goal targets, our strategic intent (or vision) is very bold rather than easily accomplished, and we invest forcefully in our courses of action. Our question was, “The following statements are about your organization’s typical position or response during the past 3 years (2012–2014). Please indicate your level of agreement,” and responses were considered on a 7-point Likert-type scale (from strongly disagree to strongly agree). From this, we use the mean score of the four items as the measure. Factor analysis indicated the unidimensionality of this factor and the Cronbach’s alpha was 0.74, AVE was 0.45, and CR was 0.77.

4.1.4 Control variables

We control for variables previously theorized in the literature as alternative explanations regarding aspirations (see supplemental materials for additional survey item details). First, we control for Aspiration Attainment Discrepancy (the difference between performance and aspiration), as this is a regularly studied factor in goal setting (Washburn and Bromiley, 2012). We follow the norm of splitting the variable into positive and negative as firm behavior may be different when performing above versus below aspirations. Second, Resources uses a five-item measure capturing the innovation and adaptability (i.e. resource efficacy) of the organization (Cronbach’s alpha was 0.86). Third, goal setting is influenced by the degree to which organizations undertake Strategic Initiatives. Our indicator, adapted from Lechner et al. (2010), aggregates nine items (e.g. improving deficient performance, satisfying customers, and enhancing creativity and innovation) rated on a 7-point Likert-type scale (Cronbach’s alpha was 0.89). Fourth, Cost Strategy and Differentiation Strategy influence aspirations, in our analysis they are measured using three items for each (Cronbach’s alphas were 0.73 and 0.81, respectively).

Fifth, we control for Firm Size (eight categories for the number of employees) and Firm Age (nine categories). Sixth, we control for ownership (State Ownership and Foreign Ownership) and organization type (Corporation, Business Unit, or Single Business Corporation, Listed Company, and Formerly State Owned). Seventh, since the responses to the survey were made by individuals, we also control for individual demographics of the respondents, including their time in the focal organization, time in the current position, time in the industry, level of education, and level of knowledge in setting top-level goals—each of which was indicated within categories. Finally, we include Industry and Country fixed effects.

4.2. Data analysis and results

Our empirical analysis uses distinct techniques as required for testing the hypotheses, and we employ numerous robustness and sensitivity tests. The Pearson correlations and descriptive statistics are shown in Table 2. We first test Hypothesis 1, which predicted higher attention to forward-looking than backward-looking factors when formulating aspirations. This hypothesis requires a comparative statistical test. The three backward-looking items aggregate to a mean of 4.91, standard deviation (SD) of 0.94, and the three forward-looking items aggregate to a mean of 5.57, SD of 0.82, resulting in a mean difference of +0.66 and SD difference of +0.85. Figure 2 graphically presents the data as well as a table of test results from an upper-tailed t-test (H₀ > 0) using a Cochran approximation process to address differences in the variances of the two factors (Snedecor and Cochran, 1977). We find forward-looking factors are significantly higher in importance (p = 0.000) and we find a Cohen’s d value of 0.78 (where 0.8 is a large effect size) (Cohen, 1992)—strongly supporting Hypothesis 1. Our results also indicate that decision-makers attend to both forward-looking and backward-looking factors in aspiration formulation since the average of both factors are above the scale midpoint of 4.

Table 2.

Descriptive statistics and correlations.

	1	2	3	4	5	6	7	8	9	10	11	12	13	14	15	16	17	18	19	20	21	22	23	24	25	26
1. Backward-looking factors	1
2. Forward-looking factors	0.54	1
3. Relative forward factors	-0.58	0.37	1
4. Competitive turbulence	0.29	0.28	-0.05	1
5. Strategic aggressiveness	0.27	0.44	0.13	0.13	1
6. Negative attainment–social	0.16	0.24	0.05	-0.01	0.33	1
7. Positive attainment–social	0.08	0.17	0.08	-0.02	0.29	0.49	1
8. Negative attainment–historical	0.20	0.18	-0.05	0.01	0.25	0.63	0.40	1
9. Positive attainment–historical	0.15	0.17	0.00	0.01	0.16	0.38	0.54	0.48	1
10. Resource	0.25	0.39	0.10	0.16	0.52	0.40	0.37	0.33	0.27	1
11. Strategic initiatives	0.33	0.45	0.07	0.23	0.38	0.27	0.20	0.28	0.19	0.48	1
12. Strategy–cost	0.29	0.41	0.08	0.21	0.42	0.22	0.13	0.23	0.07	0.42	0.37	1
13. Strategy–differentiation	0.23	0.43	0.16	0.21	0.50	0.36	0.28	0.31	0.19	0.59	0.46	0.57	1
14. Firm size	0.16	0.07	-0.11	-0.06	0.15	0.01	-0.02	0.02	0.03	0.00	-0.02	0.10	-0.04	1
15. Firm age	0.14	0.06	-0.10	-0.09	0.07	0.03	-0.01	0.02	0.00	-0.16	-0.09	0.01	-0.05	0.43	1
16. State ownership	-0.09	-0.05	0.05	-0.19	-0.01	0.01	-0.06	0.02	-0.04	-0.11	0.00	-0.13	-0.10	0.14	0.07	1
17. Foreign ownership	0.04	0.02	-0.03	0.10	0.02	-0.03	0.00	-0.11	-0.03	-0.03	0.00	0.04	0.01	0.16	0.04	-0.18	1
18. Corp. business unit	0.04	-0.04	-0.07	-0.01	0.02	-0.06	-0.09	-0.04	-0.07	-0.13	-0.01	-0.03	-0.09	0.12	0.12	-0.01	0.21	1
19. Single business	-0.04	-0.04	0.01	-0.07	-0.09	0.05	0.03	0.03	0.01	0.01	-0.07	-0.01	0.02	-0.26	-0.13	-0.06	-0.19	-0.61	1
20. Listed company	0.19	0.12	-0.09	0.15	0.17	0.01	0.03	0.07	0.09	0.06	0.09	0.16	0.06	0.34	0.20	-0.15	0.25	0.26	-0.30	1
21. Formerly state owned	-0.08	-0.05	0.03	-0.03	-0.04	-0.01	-0.05	-0.03	-0.05	-0.06	0.05	-0.07	-0.02	0.05	-0.08	0.33	-0.07	-0.03	-0.05	-0.01	1
22. Time in organization	0.04	0.00	-0.05	-0.02	0.09	0.09	0.00	0.08	-0.03	0.04	-0.03	0.09	0.07	0.07	0.29	0.04	-0.08	-0.04	0.09	-0.02	0.01	1
23. Time in position	0.01	0.00	-0.01	-0.06	-0.01	0.06	0.03	0.13	0.01	0.06	-0.07	0.05	0.04	-0.10	0.09	-0.04	-0.21	-0.14	0.15	-0.13	-0.04	0.63	1
24. Time in industry	0.04	-0.03	-0.07	-0.06	0.05	0.01	-0.05	0.02	-0.03	-0.05	-0.01	0.04	-0.01	0.06	0.20	-0.02	-0.04	-0.01	0.08	0.01	-0.06	0.59	0.40	1
25. Level of education	-0.10	0.01	0.13	-0.12	-0.03	-0.01	0.04	-0.02	0.00	-0.11	-0.09	-0.07	-0.06	0.10	0.05	0.06	0.02	-0.05	-0.02	-0.02	-0.05	-0.05	-0.02	-0.03	1
26. Knowledge of strategic goal setting	0.04	0.12	0.07	0.02	0.17	0.11	0.04	0.06	0.04	0.17	0.15	0.08	0.18	-0.12	-0.01	-0.06	0.00	-0.16	0.10	-0.11	-0.11	0.04	0.05	0.05	0.17	1
Mean	4.91	5.57	0.66	4.47	5.26	-0.44	0.44	-0.77	0.75	4.68	5.02	5.59	5.72	5.55	5.09	2.24	2.11	0.31	0.45	0.34	0.13	4.38	3.53	5.39	4.28	5.75
SD	0.94	0.82	0.85	0.98	0.99	0.71	0.57	1.14	1.07	1.16	0.99	0.99	1.00	1.92	2.35	2.27	2.12	0.46	0.50	0.47	0.34	1.68	1.62	1.52	0.81	1.10
Min	1	1	-2.0	1	1	-3.8	0	-6.1	0	1	1	1	1	1	1	1	1	0	0	0	0	1	1	1	2	1
Max	7	7	5.3	7	7	0	2.2	0	3.9	7	7	7	7	8	9	7	7	1	1	1	1	7	7	7	5	7

Note. N = 541; Bold indicates a significant correlation at ⩾95% level.

Figure 2.

Difference between forward-looking and backward-looking factors.

We next present our analysis to test Hypotheses 2 and 3 in Table 3, Model 6. These hypotheses are tested using multiple regression analyses to assess the strength of relationships with appropriate controls to mitigate confounding effects. We present regressions of backward-looking factors (Models 1 and 2), forward-looking factors (Models 3 and 4), and their difference relative forward factors (Models 5 and 6). The results in Model 6 indicate that competitive turbulence (−0.10, p = 0.028) and strategic aggressiveness (0.14, p = 0.009) are significantly associated with relative forward factors, although negatively and positively, respectively. Importantly, our models report standardized coefficients (β) so that when the independent variable changes by one standard deviation the coefficient reports how many standard deviations the dependent variable changes. For example, for relative forward-looking attention (Model 6), a one–SD (0.99) increase in strategic aggressiveness corresponds to an increase of 0.14 points on the 1 to 7 scale, indicating a meaningful positive influence. Our reported values generally fall into the small effect size category as identified by Cohen (1992). Overall, our results support Hypotheses 2 and 3.

Table 3.

Regression analysis on backward-looking, forward-looking, and relative forward (forward minus backward) aspiration determinant factors.

	Backward-looking factors		Forward-looking factors		Relative forward factors
	Model 1	Model 2	Model 3	Model 4	Model 5	Model 6
Competitive turbulence		0.25 (0.04)0.000		0.18 (0.03)0.000		-0.10 (0.04)0.028
Strategic aggressiveness		0.03(0.05)0.510		0.19 (0.04)0.000		0.14 (0.05)0.009
Negative attainment discrepancy–social	0.020.738	0.040.429	0.080.139	0.080.111	0.050.375	0.030.618
Positive attainment discrepancy–social	-0.060.214	-0.050.281	-0.030.479	-0.050.322	0.040.495	0.020.783
Negative attainment discrepancy–historical	0.030.543	0.020.660	-0.110.041	-0.100.037	-0.140.020	-0.130.034
Positive attainment discrepancy–historical	0.060.243	0.060.199	0.090.052	0.100.023	0.020.674	0.030.575
Resource	0.100.068	0.100.072	0.120.020	0.070.151	0.000.946	-0.040.526
Strategic initiatives	0.250.000	0.220.000	0.280.000	0.240.000	-0.010.823	-0.010.788
Strategy–cost	0.150.003	0.120.013	0.190.000	0.150.001	0.020.761	0.010.879
Strategy–differentiation	-0.010.836	-0.050.401	0.160.003	0.100.049	0.170.007	0.150.016
Firm size	0.120.019	0.130.009	0.010.747	0.010.908	-0.110.033	-0.140.011
Firm age	0.050.305	0.050.280	0.020.603	0.030.549	-0.030.538	-0.030.553
State ownership	-0.060.154	-0.030.440	0.010.868	0.020.631	0.080.111	0.060.247
Foreign ownership	-0.030.441	-0.040.365	-0.000.912	-0.000.937	0.030.486	0.040.401
Corp. business unit	-0.020.694	-0.010.874	-0.070.141	-0.070.152	-0.050.412	-0.060.318
Single business	0.030.636	0.050.345	-0.060.258	-0.040.435	-0.080.155	-0.090.117
Listed company	0.060.165	0.040.421	0.030.467	-0.000.999	-0.040.415	-0.040.422
Formerly state owned	0.000.925	0.010.833	0.020.680	0.020.639	0.010.805	0.010.867
Time in organization	0.000.988	-0.020.718	-0.010.861	-0.040.493	-0.010.872	-0.010.847
Time in position	0.050.314	0.070.149	0.040.434	0.070.148	-0.020.705	-0.020.784
Time in industry	-0.020.628	-0.020.740	-0.060.228	-0.050.238	-0.030.613	-0.030.534
Level of education	-0.090.030	-0.070.062	0.030.470	0.040.265	0.130.005	0.120.006
Knowledge of strategic goal setting	-0.040.366	-0.050.277	-0.030.427	-0.050.208	0.010.791	0.000.945
Industry fixed effects^a	Yes	Yes	Yes	Yes	Yes	Yes
Country–Australia	-0.010.870	0.030.735	0.020.759	0.030.692	0.040.673	-0.000.985
Country–USA	-0.090.257	-0.040.589	0.060.426	0.060.366	0.150.069	0.110.205
Country–China	-0.250.000	-0.260.000	-0.170.011	-0.170.009	0.120.118	0.130.085
F value	5.170.000	6.270.000	8.550.000	9.900.000	2.350.000	2.560.000
Adj R²	0.20	0.26	0.32	0.37	0.08	0.09

Note. N = 541; two-tailed tests; bold indicates a strong relationship (at ⩾95% level); regression coefficients are standardized β; SE is standard error in parentheses for hypothesized variables; p-values for all variables.

Industry dummy variables included but suppressed for brevity.

4.3. Sensitivity evaluations

We undertook numerous sensitivity evaluations to increase confidence in the results (see supplemental materials for details). First, to address multicollinearity concerns, we ran the statistical analysis without control variables but retained country fixed effects (Kalnins, 2018). Second, to address concerns regarding common method bias we followed the advice of Podsakoff et al. (2003) in scale development and we undertook two empirical approaches—Harman’s one factor test and the marker variable test. Third, we investigated alternative dependent variable configurations such as the ratio of forward-looking to backward-looking factors. Fourth, to mitigate endogeneity issues, we ran an analysis using instrumental variables in two-stage least squares regression (2SLS). Overall, our sensitivity evaluations are robust; increasing confidence in our results.

5. Discussion

This research adds to knowledge by offering more comprehensive theorizing on attention allocation among forward-looking and backward-looking factors in aspiration formulation—explicitly theorizing legitimacy judgments as a novel explanation of why and under what conditions decision-makers allocate more or less relative attention to forward-looking factors over backward-looking factors. More explicitly, we advance knowledge in the emerging ABV of aspiration formulation (e.g. Berchicci and Tarakci, 2022) by adopting the three core principles of the ABV as an overarching theoretical framework (Ocasio, 1997) and explaining how social contexts provide the frames of reference for legitimacy judgments (e.g. Bitektine, 2011; Bitektine and Haack, 2015; Suddaby et al., 2017). Our empirical data indicate that aspiration formulation is generally guided by relatively higher attention focus on forward-looking than backward-looking factors, and show that this relative forward-looking attention is negatively influenced by heterogeneity in competitive turbulence of the organization’s environment, and positively influenced by heterogeneity in the organization’s strategic aggressiveness. Thus, we extend the growing work on forward-looking, anticipatory decision-making regarding aspirations (Chen, 2008; Lant and Shapira, 2008; Shinkle et al., 2021) and contribute to the debate on aspiration formulation. Overall, we believe that our work opens numerous pathways for future research to explore a broad array of aspiration determinants and contingencies. Furthermore, our work provides enhanced theory for scholars to utilize in studies of aspiration-based (also called, performance feedback driven) organizational behavior and performance.

Our finding for Hypothesis 1, that more relative attention is allocated to forward-looking factors in the contemporary business environment, diverges from BTOF predictions premised on cognitive limitations (Cyert and March, 1963) and organizational theory predictions regarding historical anchoring (e.g. Leonard-Barton, 1992). Yet, this finding aligns with the notions of future planning from strategic management (e.g. Aguilera et al., 2024; Ansoff, 1979; Fiegenbaum et al., 1996) and the literatures encompassing forecasting and foresight (Durand, 2003; Fergnani, 2022; Lim, 2025; Shepherd et al., 2017). In this way, our work highlights the idea of multiple factors, especially forward-looking factors, being involved in aspiration decisions (see additional supporting detail in the supplemental materials—Section D, Table D).

Our finding for Hypothesis 2, regarding the influence of competitive turbulence, is the same as the prediction of the threat-rigidity hypothesis (e.g. Staw et al., 1981). However, our reasoning differs from this prior work as we offer a novel explanation, namely that attention allocation is based on the higher legitimacy of backward-looking factors over forward-looking factors in competitively turbulent environmental conditions (see additional supporting detail in the supplemental materials—Sections C and D). Our finding for Hypothesis 3, regarding the influence of strategic aggressiveness, is consistent with long-held notions of prospecting and analytical planning that incorporate the reasoning power of decision-makers (Ansoff, 1979; Miles and Snow, 1978), yet applied in the context of aspiration formulation (see additional supporting detail in the supplemental materials—Section D).

Importantly, our theorizing is about the difference in attention between forward- and backward-looking factors. A salient observation is that the correlation between forward- and backward-looking factors is positive (0.54) rather than negative—suggesting that these two factors were not in a direct trade-off. This observation is consistent with the idea that aspirations and their determinants receive high attention in contemporary practice (Greve and Teh, 2018; Linder and Foss, 2018). Following ABV and its perspective on finite attention, other factors in the decision-makers’ environments (e.g. politics, procedures, suppliers, labor, or government) may consequently receive lower attention. However, our data do not parse this potential aspect. In contrast to finite attention, we note that some scholars have argued alternatively that attention is plentiful (e.g. Weick and Sutcliffe, 2006). While not hypothesized, it would be reasonable to expect that decision-makers may increase their overall attention on aspiration determinants with increasing competitive turbulence—due to the precarious nature of performance and with increasing strategic aggressiveness—due to the focus on high performance. More explicitly, in Hypotheses 2 and 3, we argued that there is a difference regarding how this increasing overall attention will be allocated between forward- and backward-looking factors. To enhance understanding of these relationships, we created the graphs in Figure 3 based on our regression results. Interestingly, the general upward slopes of these graphs give credence to the idea that overall attention to aspiration determinants increases with increasing competitive turbulence and with increasing strategic aggressiveness. We believe that these results provide further confidence in our data given the alignment of the results with the logical expectations mentioned above.

Figure 3.

Backward-looking and forward-looking attention relationships.

For practice, our findings highlight that aspiration formulation should be treated as an attention-allocation process that requires deliberate governance and stakeholder awareness, rather than a mechanical extrapolation of past performance. Because managers systematically devote greater attention to forward-looking determinants—such as expectations, threats, and opportunities—than to backward-looking ones, aspiration setting practices will benefit by explicitly integrating anticipatory reasoning and communicating the causal logic linking intended actions to expected outcomes. Doing so is expected to enhance legitimacy in the eyes of boards, employees, and external stakeholders, who increasingly demand transparent justification for performance targets (e.g. Greve and Teh, 2018; Linder and Foss, 2018). However, attention weighting should remain context sensitive. In contexts of high competitive turbulence, when forecasts become less reliable, organizations should emphasize evidence-based indicators. Conversely, in strategically aggressive firms, formal attention structures can be used to legitimize forward-looking factors. By governing aspiration setting as an adaptive, legitimacy-seeking attention system, managers can improve the credibility, responsiveness, and strategic coherence of organizational aspirations (i.e. goals).

5.1. Limitations and future opportunities

Several limitations of our investigation may provide additional research opportunities. A limitation of our study is that it involved only six items to measure our forward- and backward-looking aspiration determinants; a choice we made in the interest of parsimony. Future research can expand this possibility set. Our pre-survey interviewees also mentioned a few additional aspiration determinants: market expectations, resources and capabilities, environmental factors (e.g. regulatory changes or the business cycle), and internal forces such as organizational culture. A second limitation is our use of cross-sectional survey data, informed by qualitative interview data. While we believe this approach is consistent with our theorizing regarding attention allocation in decision-making (as well as with existing studies, such as Stevens et al., 2015), future research could use longitudinal data and secondary data sources that may provide additional evaluation of variations in aspiration formulation as well as organizational attention allocation over time. Future research may also take advantage of quasi-experimental approaches by studying aspiration formulation after experiencing exogeneous shocks (e.g. mergers, new CEO, or major regulation changes) to enhance understanding of causality. A third limitation is that our measures on the importance of aspiration factors as a proxy for attention could be improved—even though we follow prior aspiration studies. Specifically, forced ranking, comparative evaluation between paired factors (Krosnick, 1999), or other instruments drawing on psychology, could further reveal priorities and attention differences (see, for example: Stevens et al., 2015; Young and Smith, 2013). Fourth, our data do not allow direct evaluation of our hypothesized mechanisms as is common in aspiration studies. Future research could therefore add to knowledge by more comprehensively exploring the mechanisms we theorized via longitudinal, experimental, or qualitative studies. Finally, we examined stakeholders as a homogeneous audience based on their theorized norm, which we consider an important first step. Future research could extend this work and follow the legitimacy literature to study the importance level of diverse stakeholders with competing claims (Bitektine, 2011; Deephouse et al., 2017).

Importantly, our arguments regarding stakeholder legitimacy concerns and the ABV provide a systematic framework that allows future research to explore a broad array of determinants and contingencies in organizational aspiration formulation. We believe that scholars can extend our legitimacy foundation to explore a variety of questions regarding different goal dimensions and different types of stakeholder pressures. For example, future research can extend theory by exploring how organizations establish their aspirations on social and environmental goal dimensions commensurate with legitimacy concerns of distinct subsets of stakeholders (see considerations in: Hwang and Colyvas, 2020; Keum and Eggers, 2018).

5.2. Conclusion

Overall, our work re-conceptualizes the process of aspiration formulation by following the three principles of the ABV and by bringing in the legitimacy concerns of organizational decision-makers as a core logic. Since this initial work privileges parsimony, future investigations are warranted to advance knowledge. We encourage scholars to pursue such investigations to further build an ABV of aspiration formulation that comprehends the attention capacity and legitimacy considerations of decision-makers vis-à-vis stakeholders when they make aspiration decisions; decisions that significantly shape organizational behavior and performance. Undertaking such efforts could add substantially to our knowledge—beyond aspiration formulation—to the wider arenas of organizational decision-making and aspiration-driven behavior in contemporary practice.

Supplemental Material

sj-docx-1-aum-10.1177_03128962261447145 – Supplemental material for Encompassing forward-looking determinants in the attention-based view of aspiration formulation

Supplemental material, sj-docx-1-aum-10.1177_03128962261447145 for Encompassing forward-looking determinants in the attention-based view of aspiration formulation by George A. Shinkle, Feifei Yang, Mirjam Goudsmit and Lingli Luo in Australian Journal of Management

Footnotes

Appendix 1 Acknowledgements

We gratefully acknowledge the support of the University of New South Wales (Sydney, Australia).

Final transcript accepted on 2 April 2026 by Miles Yang.

ORCID iDs

George A. Shinkle

Feifei Yang

Mirjam Goudsmit

Funding

The authors disclosed receipt of the following financial support for the research, authorship, and/or publication of this article: The first-named author’s contribution to this work and the associated data collection efforts were funded by the Australian Research Council (Award DE130100840). This research effort was also supported by National Natural Science Foundation of China (72202067, 72302213), Australian Government Research Training Program, and Ryoichi Sasakawa Young Leaders Fellowship Fund.

Supplemental material

Supplemental material for this article is available online.

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