The Influence of Managerial Mindfulness on Innovation: Evidence from China

Yuanyuan Hu,Yang Chen,Xiaoping Zhao

doi:10.3390/su11102914

Yuanyuan Hu, Yang Chen + Show 1 more

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https://doi.org/10.3390/su11102914

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Abstract

This study attempts to investigate the influence of managerial mindfulness on firm innovation. Managerial mindfulness is defined as a collective psychological state shared by top management team (TMT) members and represents their collective attention to present-moment events and experiences. Drawing from two psychological mechanisms of mindfulness, we argue that managerial mindfulness can positively affect R&D intensity—a proxy for firm innovation. The first psychological mechanism is that mindfulness facilitates self-regulation. By facilitating self-regulation, managerial mindfulness enables TMT members to behave less opportunistically and act in a less self-serving manner. Therefore, TMT members are concerned about the shareholders’ interests in long-term value creation and hence are willing to take more risk such as investing more in R&D. The second psychological mechanism is that mindfulness facilitates goal-pursuit, especially for intrinsic goals. Mindful TMT members are autonomously motivated to pursue goals that are more satisfying, persist for longer durations, and show greater success than goals that are extrinsically motivated; mindful TMT members are likely to view R&D as an intrinsic goal to pursue. In addition to the main effect, this study also examines several moderators and suggests that the positive relationship between managerial mindfulness and R&D intensity is moderated by firm age, slack resources, and past financial performance. Specifically, this relationship becomes weaker when a firm grows older and the firm has better past financial performance, while it is stronger when a firm has greater slack resources. To empirically test our hypotheses, we rely on a sample of Chinese listed companies and collect data from the China Stock Market and Accounting Research (CSMAR). Feasible generalized least squares (FGLS) regression is adopted due to the presence of significant autocorrelations and heteroskedasticity. The empirical analyses provide full support for our hypotheses. Therefore, this study contributes to literature of mindfulness, as well as studies on TMT’s influence on firm strategy and decision-making.

Highlights

Innovation, as a major strategy for enterprises to build and maintain their sustainable competitive advantages, has been a hot issue in management and economic studies [1,2,3]
We conceptualize managerial mindfulness as a collective psychological state shared by top management team (TMT) members
We emphasize that managerial mindfulness represents TMT members’ collective attention to present-moment events and experiences, which differs from Weick et al.’s (1999) conceptualization of mindful organizing [31]

Summary

Introduction

Innovation, as a major strategy for enterprises to build and maintain their sustainable competitive advantages, has been a hot issue in management and economic studies [1,2,3]. Many researchers pay more attention to the research on the influencing factors of enterprise R&D investment intensity [2]. There are two main types of research on antecedents of R&D investment: one is from the perspective of external environment of enterprises, such as macro-environment, institutional environment, cultural environment, etc. [5,6], the other is from the internal micro-environment of enterprises, such as board structure, ownership structure, and advertising investment [7,8,9]. Most of them study the influencing factors of R&D investment from the perspective of objective factors.

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