Why do firms engage in forward-looking search?: Performance, slack resource, and environmental determinants

Publication: Research - peer-reviewPaper

  • Tymen Jissink
  • René Rohrbeck
  • Eelko K.R.E. Huizingh
    Eelko K.R.E. HuizinghFaculty of Economics and Business, University of GroningenNetherlands
This study examines to which extent performance feedback and environmental characteristics predict a firm’s engagement in forward-looking search. We refer to forward-looking search as the search for information pertaining to the location of future opportunities or threats. We draw our theoretical frame from recent propositions of the behavioural theory of the firm, prospect theory, and contingency theory. We utilize objective firm performance data from 2010 to 2014 and survey data from 2013/14 on forward-looking search practices and environmental perceptions. We find that firms that have performed below aspirations are less likely to engage in forward-looking search, suggesting that forward-looking search is not a form of problemistic search. In contrast, firms that have abundant uncommitted (slack) resources as well as firms expecting to outperform in the near future are engaging more into forward-looking search. We also find interaction effect between performance feedback and environmental characteristics. Interestingly firms with a high level of slack resources are only surpassing their less rich peers in forward-looking search, if they are in technologically turbulent environments. Also firms with a low level of slack resources engage to a much lower extent into forward-looking search, if they operate in high-competitive-intensity environments. Our findings not only carry important implications for predicting a firm’s engagement in forward-looking search, but also potentially for predicting a firm’s ability to discover superior opportunities.
Original languageEnglish
Publication year12 Jun 2017
Number of pages6
StatePublished - 12 Jun 2017
EventFutures Conference 2017 - Turku, Finland

Conference

ConferenceFutures Conference 2017
CountryFinland
CityTurku
Period12/06/201713/06/2017
Internet address

    Keywords

  • Forward-looking search, behavioural theory of the firm, prospect theory, performance feedback, slack resources, performance expectations, environmental characteristics

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