Description
Despite the importance of target setting for firms, prior research offers mixed evidence
regarding performance consequences of target difficulty levels. While experimental
research suggests that setting difficult targets can increase performance, empirical evidence
in field studies is mixed and ambiguous. To explain this ambiguity, we introduce
and analyze firms’ target flexibility with regard to adjusting targets intra-year. We argue
that target flexibility is associated with both target difficulty and firm performance in
the field and therefore can significantly contribute to an understanding of their relationship.
doc_115648347.pdf
Despite the importance of target setting for firms, prior research offers mixed evidence
regarding performance consequences of target difficulty levels. While experimental
research suggests that setting difficult targets can increase performance, empirical evidence
in field studies is mixed and ambiguous. To explain this ambiguity, we introduce
and analyze firms’ target flexibility with regard to adjusting targets intra-year. We argue
that target flexibility is associated with both target difficulty and firm performance in
the field and therefore can significantly contribute to an understanding of their relationship.
doc_115648347.pdf