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CEO career horizon influence strategic novelty of a firm: A study under the boundary condition of CEO's temporal focus

Published online by Cambridge University Press:  05 September 2022

Arpita Agnihotri Open the ORCID record for Arpita Agnihotri [Opens in a new window] ,
Saurabh Bhattacharya  and
V.K. Satya Prasad
Arpita Agnihotri*
Affiliation:
Penn State Harrisburg, E356D Olmsted Bldg, Middletown, PA 17057, USA
Saurabh Bhattacharya
Affiliation:
Newcastle University Business School, 5, Barrack Road, Newcastle Upon Tyne, NE1 4SE, UK
V.K. Satya Prasad
Affiliation:
Symbiosis Institute of Business Management, Hyderabad, India
*
*Correspondence to author: Arpita Agnihotri, E-mail: axa671@psu.edu
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Abstract

The paper examines the relationship between CEO career horizon and strategic novelty under boundary conditions of CEOs' temporal focus for firms in one of the emerging markets. Upper echelons theory predicts that CEOs' risk aggressiveness decreases with diminishing career horizons. Therefore, CEOs nearing retirement are less likely to make novel strategic investments. We assert that CEOs' career horizon influences strategic outcomes, especially risk aggressive strategic novelty outcomes contingent on the CEOs' temporal perspective, i.e., past and future temporal focus. We test the hypotheses using archival data from 285 listed firms in India. The findings support the hypotheses by showing that CEOs' carrier horizon positively influences strategic dynamism and distinctiveness, the two dimensions of strategic novelty. The results also suggest that past temporal focus enhances the negative influence of decreasing CEOs' career horizons on strategic dynamism and distinctiveness. Future temporal focus, on the contrary, diminishes the negative influence of decreasing CEOs' career horizons on strategic dynamism and distinctiveness. The findings contribute to understanding the joint role of the time static trait of CEOs, i.e., temporal focus, and time-varying trait, i.e., career horizon on strategic novelty.

Keywords

CEO career horizonpast and future temporal focusstrategic distinctivenessstrategic dynamismstrategic novelty
Type
Research Article
Information
Journal of Management & Organization , First View , pp. 1 - 21
Copyright
Copyright © The Author(s), 2022. Published by Cambridge University Press in association with the Australian and New Zealand Academy of Management

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