How CEO and CFO Regulatory Focus Interact to Shape the Firm’s Corporate Strategy

57 Pages Posted: 29 Dec 2016 Last revised: 2 Aug 2018

See all articles by Guoli Chen

Guoli Chen

INSEAD - Singapore

Philipp Meyer-Doyle

INSEAD - Strategy

Wei Shi

University of Miami; University of Miami - Department of Management

Date Written: August 02, 2018


Existing research has documented the role that CEOs, and especially CEO regulatory focus, play in shaping firm strategy. Yet, the impact of CEOs is constrained by that of the other executives in the firm, and the strategic leadership literature has repeatedly called for more research that examines the interaction between the CEO and other executives, most notably the CFO. We respond to this call and examine how the CEO’s and CFO’s regulatory focus interact to shape the firm’s corporate strategy and what happens in cases where they are misaligned. Making use of micro-data on the regulatory focus of CEOs and CFOs and their firms’ corporate strategy actions, we find that both are important drivers of the firms’ growth-oriented initiatives, and that this impact is even amplified if they align. In cases of misalignment, we find that on average CEOs prevail, but this effect depends on CEOs’ power. Interestingly, misalignment between CEO and CFO regulatory focus has positive performance implications, suggesting important complementarities between CEOs and CFOs. Overall, our study contributes to the strategic leadership literature by explicating important interactions and complementarities between the CEO and CFO with regards to their regulatory focus in shaping firm strategic outcomes. We also contribute to the literature on corporate strategy by highlighting important executive-interaction based drivers of corporate strategic decisions. Finally, we also extend the literature on the microfoundations of strategy by showing how important characteristics of executives interact and aggregate to shape the firm’s strategic initiatives and its performance.

Keywords: Strategic Leadership, Corporate Strategy, Regulatory Focus, Micro-foundations of Strategy

JEL Classification: M1, D2

Suggested Citation

Chen, Guoli and Meyer-Doyle, Philipp and Shi, Wei and Shi, Wei, How CEO and CFO Regulatory Focus Interact to Shape the Firm’s Corporate Strategy (August 02, 2018). INSEAD Working Paper No. 2018/31/STR, Available at SSRN: or

Guoli Chen (Contact Author)

INSEAD - Singapore ( email )


Philipp Meyer-Doyle

INSEAD - Strategy ( email )

1 Ayer Rajah Avenue
Singapore, 138676

Wei Shi

University of Miami ( email )

United States

University of Miami - Department of Management ( email )

United States

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