CEO Promotion Focus, Prevention Focus and Firm Strategic Change

Drawing on upper echelons theory, this study focuses on the chief executive officers (CEOs) regulatory focus and delineates how CEO promotion and prevention focus differentially affect the magnitude of strategic change undertaken by a firm. From the person-situation interaction perspective, this study also theorizes how these relationships are moderated by the firm's prior performance and environmental dynamism. These hypothesized relationships are then empirically tested using a sample of 1,318 observations with respect to 183 publicly held U.S. firms, covering a 19-year time period. The analytical results support the predictions. The study concludes with a discussion of some of the important theoretical and practical implications.