From Micro Origins to Macro Outcomes: CEOs' Temporal Focus, Firm Strategic Change, and Performance

Abstract

Building on the theoretical fundaments of the attention-based view and organizational paradoxes, we develop the concept of paradoxical temporal focus, which refers to CEOs’ ability to simultaneously center their attention on past-related and future-related stimuli. We then empirically test the relationship between CEOs’ paradoxical temporal focus and strategic change using longitudinal data (from 2000 to 2016) from manufacturing firms listed in the S&P 1,500 index. Results from polynomial regression analysis show that CEOs who attend to the past and future at the same time are more likely to initiate strategic change. However, in the context of strategic change implementation, firm performance increases when CEOs shift their temporal orientation from a dual mode to an exclusive focus on the past. Thus, our study extends CEO cognition and strategic change literature by highlighting the important role of temporal foci.