This study investigates whether and how the impact of drivers of aspiration levels changes across the cases of consistent and inconsistent performance feedback within the context of a retailer. Analysis of internal corporate data shows that while past aspiration level and performance–aspiration gap positively influence the current aspiration level in the case of inconsistent feedback, performance feedback consistency changes only the impact of performance relative to peers. This study replicates past research in a different industry and country due to limited empirical evidence, introduces real-world complexity into aspiration theory, pinpoints performance–aspiration gap as the primary performance feedback, introduces a new sign for the impact of performance relative to peers, and reconciles its previously detected mixed impact. The findings suggest that organizational attention has an inward focus in the case of inconsistent feedback. The results also point out that leaders can trigger change through a performance outcome that lags behind the corresponding aspiration level rather than the performance of peers and eventually move their organizations toward high performance targets by starting with feasible rather than stretch goals.

Purpose The purpose of this paper is to explain how a multi-market firm develops the motivation to forbear from competition. Design/methodology/approach A two-way fixed effects model with Driscoll and Kraay standard errors investigates the research question with panel data collected from the US scheduled passenger airline industry. Findings The results demonstrate that although the interaction of multi-market contact with strategic similarity impairs a firm’s forbearance from competition, the same interaction promotes it as firm performance deteriorates, supporting the hypotheses. Research limitations/implications Performance explains not only how forbearance emerges out of coincidental multi-market contact but also reconciles the mixed evidence for the impact of the two-way interaction between multi-market contact and strategic similarity on forbearance. Practical implications Antitrust authorities should pay more attention to low performing firms than to high performing firms in their investigations. Also, managers of multi-market firms should identify multi-market rivals with low performance as targets for the initiation of forbearance. Originality/value This study revises the mutual forbearance theory to align it with the accumulating empirical evidence that otherwise refutes its assumption and thereby improves theory’s descriptive and predictive power.

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