How Adaptive are Adaptive Aspirations: Exploring the Ecology of Organizational Learning

The examination of aspiration levels has proven to be one of most fruitful and actively studied elements of the behavioral theory of the firm. However, learning with respect to aspirations is just one facet of a broader learning process. Organizations both encode their interpretation about outcomes and change their beliefs about preferred actions. We explore this fuller ecology of organizational learning and, in particular, consider the contrast between the learning dynamics generated by a setting in which aspirations are adaptive to experience and one in which aspirations are not adaptive. Aspiration-based learning is a form of adaptive intelligence; however, it is also subject to potential pathologies. First, akin to a competence trap, we identify a satisfaction trap. Further, rapidly adaptive aspirations in a world with noisy feedback can lead to a pattern of unending search and continued goal dissatisfaction. Organizations face a problem of not only identifying attractive alternatives, they also face a challenge of persisting in favorable alternatives in the face of ambiguous feedback. Ironically, we find that an apparently less adaptive system, in which the organization’s goal increases in a mechanistic manner over time, leads to a more adaptive organization.