Behavioral theory of the firm suggests that aspirations are largely based on social aspirations and historical aspirations (encompassing past historical aspiration and past performance), and are adaptively adjusted in response to environmental information and organizational practices. However, few studies have considered the attention to and selection of external and novel information by strategic leaders, particularly top management teams (TMT). We synthesize the attention-based view and regulatory focus theory to argue that promotion-focused TMTs pay more attention to social aspirations (representing external information) and historical performance (representing novel information) when setting aspirations, while prevention-focused TMTs pay more attention to their own aspirations (representing internal information) and historical aspirations (representing organizational inertia). We provide support for these inferences by utilizing a longitudinal panel of sale goal-setting data disclosed by listed companies in China from 2007 to 2019.
