Time for future is now - CEO temporal focus and firms' strategic responses to water challenges

Abstract

This study examines how CEO temporal focus – the extent to which CEOs devotes their attention to the past, present, and future – shapes strategic responses to global grand challenges such as natural resource scarcity. Analyzing water scarcity as one of the global risks of highest concern, we propose that CEO attention to the present and future are critical in addressing the inherent time conflict of managing natural resource scarcity. Using an 11- year panel data set of large- and medium-sized German firms, we find support for our three hypotheses: CEOs who are high in present focus tend to integrate water scarcity in their firm’s strategy only as a pure threat. However, to tackle the grand challenge of water scarcity – in terms of recognizing and implementing valuable water-related business opportunities – they need to be future-oriented. Additionally, we find evidence that future-oriented CEOs shy away from identifying water scarcity as a pure threat without initiating specific mitigating and value-creating strategic actions. These findings contribute to the literature on strategic implications of CEOs’ subjective view of time.