STRATEGIC REFERENCE POINT THEORY - FIEGENBAUM - 1996 - SMS - Wiley
sms.onlinelibrary.wiley.com
Fiegenbaum's 1996 Strategic Reference Point Theory reveals how firms don't just compete against rivals — they benchmark against internal and external anchors that silently dictate their risk appetite and strategic choices.
Strategic Reference Point TheoryProspect TheoryBehavioral StrategyRisk Preference Theory
Theory Briefing
- Fiegenbaum's 1996 SMS paper proposes that firms orient strategy around Strategic Reference Points, not just competitor moves or market signals.
- An optimal SRP structure balances internal capabilities, external benchmarks, and time horizons — misalignment drives poor strategic risk decisions.
- The theory predicts that firms above their SRP become risk-averse, while those below it take on greater risk — echoing Prospect Theory at the organizational level.