Past, Present, and Future: The Temporal Dimensions of CEOs’ Ideology in Strategic Decision-Making

We examine how alignment between a CEO’s temporal focus and the temporal orientation associated with the CEO’s political ideology shapes firms’ responses to underperformance. We propose that when temporal focus matches ideological orientation—past-oriented for conservatives and future-oriented for liberals—negative performance feedback is more likely to elicit strategic change. When temporal focus and ideology are misaligned, CEOs are more likely to engage in self-enhancement and motivated interpretation of feedback, which dampens their inclination to initiate change despite continued firm underperformance. Analyses of S&P 500 firms from 2005 to 2014 provide evidence consistent with our prediction. Overall, our findings identify temporal-focus alignment as a key boundary condition in the performance feedback–strategic change relationship and refine our understanding of when and how CEO ideology influences strategic adaptation.