CONSUMERS AND SOCIAL MEDIA

THE FOG OF FEEDBACK: HOW GRAY ZONES MAKE SOME FIRMS SEE RED

By Connie Clark

Over the past several quarters, your firm’s financial results have been a mixed bag. At one point, profits were up while sales had leveled off. In a prior quarter, profits sank, yet you gained important ground on your competitors. Now the latest results are in, and it’s a similar up-while-down story. In this type of gray-zone environment, where overall results are open to many interpretations, your next move is crucial. So what do you do?

Almost anyone can identify ambiguous performance within a to these uncertain environments is a key question examined in a new report by John Joseph, PhD, assistant professor of Strategy at the UC Irvine Paul Merage School of Business.

“The Fog of Feedback: Ambiguity and Firm-Responses to Multiple Aspiration Levels,” published in Strategic Management Journal, industry during the rapid growth and innovation of the last decade, when manufacturers relied on performance feedback to determine new product and competitive strategies.

According to Joseph, ambiguity is characterized by results that are open to interpretation. “Ambiguity is realized when a challenging to establish the relationship between them,” he says. “In the presence of ambiguity, no single interpretation of the

Joseph notes three initial results of this ambiguity. First, he