Competing in Innovation-Intensive Environments: The Role of Soft Power, Learning, and CEO Heuristics

Abstract

We start by exploring how the interplay of soft power and learning levers helps firms address competitive uncertainty in innovation-intensive environments (IIEs). We then theorize that firms’ motivation to pursue a specific combination of soft power and learning tactics in IIEs is shaped by CEO regulatory focus. The analysis of a panel of IIE firms supports our theorizing and reveals that accounting for CEO regulatory focus is elemental to the understanding of firms’ performance heterogeneity in such environments. We conclude that a perspective focused on a combination of soft power and learning tactics is better fitted to explain firms’ performance in environments plagued by extreme uncertainty compared to traditional theoretical lenses. Our main contribution is to the study of performance in innovation-intensive environments.