The Role of Temporal Attitude in Strategic Decision-Making

Following recent calls to better account for subjective perceptions of time in strategy research, we put forward a novel construct that we label as ‘temporal attitude’. Based on the different combinations of temporal focus and affective focus, we identify four temporal attitudes: nostalgia (positive past attitude), regret (negative past attitude), hopefulness (positive future attitude) and fear (negative future attitude). Using this categorization, we argue that top management team’s temporal attitude is associated with subsequent firm performance in an environmental discontinuity. Based on a unique sample of private banks in Switzerland and Liechtenstein, we find that hopefulness enhances, whereas regret reduces firm profitability. Our study contributes to the upper-echelons literature and improves our understanding of the joint effects of temporal and affective focus in strategy research.