Business Model Innovation Intensity: the Interplay of Emotional Ambivalence and Future Focus

How do decision makers’ mixed feelings about the firm’s situation influence the propensity of firms to innovate their business model? We integrate theoretical logics from the social psychology literature on ambivalence and temporal focus to examine how emotional ambivalence affects business model innovation and how organizational future focus affects this relationship. We hypothesize the main effect of emotional ambivalence, and the moderating effect of temporal focus on business model innovation intensity. We test our hypotheses using a novel computer-aided text analysis of letters to shareholders and earnings call transcripts of S&P 500 firms between the years 2004 and 2020. We find a direct negative association of emotional ambivalence with business model innovation intensity and a moderating effect of organizational future focus which flips this negative relationship to positive. Our findings highlight the interplay between emotions and cognition in business model innovation. We discuss the implications of our findings for the literature on business model innovation and emotions in strategy.