We are different and yet the same: the role of CEOs’ regulatory focus and attention in SMEs’ innovation orientation preferences

Abstract

PurposeDrawing upon upper echelon, regulatory focus and attention theories and focusing on SMEs, the purpose of this paper is to answer questions on how the motivational disposition (promotion vs. prevention regulatory focus) of CEOs affects their information search patterns (i.e. search selection and intensity) and consequently organizational level engagement in different types of innovation activities (exploration vs. exploitation).Design/methodology/approachA quantitative study was conducted collecting data from the CEOs of SMEs operating in the dynamic wine and spirits industry in Greece. The data were collected in two independent time streams and the proposed theoretical model was tested by applying OLS regression analysis.FindingsThe current research provides evidence that differences in CEOs’ level of promotion and prevention focus trigger different information search selection and search intensity patterns. Nonetheless, the attention to innovation components act as mediators only in the hypothesized relationships between a CEO's level of prevention and promotion focus and exploration. Paradoxically, filtered through attention to innovation and triggered from the same motive, that is to reduce negative emotions, promotion focus CEOs choose to direct resources to exploitation and avoid investing in exploration, whilst the opposite was supported for prevention focus CEOs.Practical implicationsThe results highlight the important role of a CEO's regulatory focus orientation in promoting diverse attention to innovation patterns and firm-level innovation tendencies towards exploration and/or exploitation.Originality/valueThis study's contributions extend and combine the theories of regulatory focus, UET and attention in the field of managerial/entrepreneurship behavior and innovation. Therefore, they are valuable for understanding the determinants of firm-level innovation choices (exploration vs. exploitation) in SMEs.