The time for the future is now: CEO temporal focus and firms' identification and interpretation of grand challenges – The example of water scarcity.

This study examines whether Chief Executive Officer (CEO) temporal focus—the extent to which CEOs devote their attention to the past, present, and future—is related to firms' identification and interpretation of grand challenges. Using the exemplary grand challenge of water scarcity, we adapt mechanisms of the temporal focus literature to the particularities of grand challenges and propose that CEO temporal focus is related to whether firms identify water scarcity as an issue and whether they interpret the identified issue as an opportunity. In our empirical analysis of 727 firm-year observations for the years 2002–2012, we find no support for the hypothesis that firms' identification of water scarcity is related to CEO temporal focus. However, we show that having a CEO high in future focus is positively, and a CEO high in past or high in present focus is negatively related to interpreting water scarcity as an opportunity. • We investigate differences in firms' responses to water scarcity. • Managers' temporal focus matters for firms' interpretation of water scarcity. • Industry, time, and firm size matter in identifying water scarcity as an issue. • Results are based on German firms from 2002 to 2012, resulting in 727 observations. [ABSTRACT FROM AUTHOR]