The Influence of Leader Regulatory Focus on Problem Recognition: The Mediating Effect of Employee Regulatory Focus and The Moderating Effect of Prospective

The Influence of Leader Regulatory Focus on Problem Recognition: The Mediating Effect of Employee Regulatory Focus and The Moderating Effect of Prospective

Thinking

Master Thesis, MSc Human Resource Management University of Groningen, Faculty of Economics & Business

August 1, 2019

ILEKTRA BITSORI Student number: S3743993

Van Brakelplein 49A 9726 HH Groningen tel.: (+30)6980202968) Email: i.bitsori@student.rug.nl

Supervisor:

Dr. T. Vriend

Email: t.vriend@rug.nl

University of Groningen

ABSTRACT

Research on how employees develop solutions is essential for our organization environment which is full of ill-structured problems that need to solve. However, problem recognition, the first and probably the most important stages of problem-solving, have been neglected. At the same time, research continues to argue in favor of leaders to influence employees’ behavior. The aim of this study is to explore how the regulatory focus of leaders can influence the perception of employees towards problem recognition either as an opportunity or as a threat. We propose that this relation will be mediated by employee regulatory strategies (eagerness vs. vigilance). Furthermore, this research explores the moderating role of prospective thinking in the relationship between employee regulatory strategies and problem recognition (opportunities vs. threats). Our hypothesis for the mediation effect has been fully supported for both paths of the conceptual model. However, we didn’t find support for the moderation effect of prospective thinking.

Keywords: Leadership, regulatory focus theory, problem recognition, prospective thinking,

opportunities vs. threats,

The Influence of Leader Regulatory Focus on Problem Recognition: The Mediating Effect of Employee Regulatory Focus and The Moderating Effect of Prospective Thinking

1. INTRODUCTION

The interest in problem-solving has grown tremendously in the last decades. It has been long argued that the ability to solve complex problems (e.g., develop business strategies, or restructure of the work design) is an essential characteristic in the contemporary business environment that constantly changes (Baer, Dirks, & Nickerson, 2013; E. Shalley, 2009). Find the best solution and do it faster than the competitor can sometimes even determine the viability of a company. Employees are, more and more, confronted with increasingly complex problems that are often ambiguous, and ill-defined (Dunkle, Schraw, & Bendixen, 1995). As ill-defined are characterized the problems that are not clearly stated. That means, that they contain ambiguous information and it is not obvious if they exist or not. It is therefore important for employees to be able to recognize them in a given context in order to later solve them (Baer et al., 2013). In an organizational context, it is leaders’ responsibility to provide direction and motivate employees on how to overcome and solve problems (Parker & Wu, 2014).

However, despite the fact that the process of how employees generate ideas and how leaders might influence this process has attracted researcher’s attention, unfortunately, the issue of how a problem can be recognized and if and how leaders might influence this process, has been neglected (Pretz, Naples, & Sternberg, 2003). The process by which a problem is recognized constitutes the first step of the problem-solving process (Brophy, 1998). Problem recognition has been defined as the series of actions by which an individual identifies a complex problem, structures it and defines the parameters that characterize it (Reiter-Palmon & Robinson, 2009).

Problem recognition is of immense importance, especially in ill-defined problems

Individuals differ in the ways they recognize a problem (Reiter-Palmon & Robinson, 2009).

That means, that some employees can perceive a problem as an opportunity and approach it as a challenging chance for improvement, while others may perceive the same problem as a threat and try to avoid it. That is especially the case for ill-defined problems where two-side information is given. Hence it is not surprising that several researchers have mentioned the lack of research that has been conducted on problem recognition and stressed the need for further research in this direction (Pretz, et al, 2003, Reiter-Palmon et al., 1997).

The absence of knowledge and understanding regarding problem recognition causes several issues. Among them, the fact that we do not know how and whether leadership affects this process. In other words, little is known about how and whether leaders can influence employees’ engagement in problem recognition. Therefore, in this research drawing upon the regulatory theory that Higgins (1997) first conceptualized, we investigate the cognitive and motivational processes of leaders influence in the recognition of problem in terms of opportunities or threats.

The motivation mechanisms that leaders use to influence employees, differ based on their regulatory focus (Kark & Van Dijk, 2007). Previous research in motivation mechanism argues that leaders' self-regulatory focus has a strong effect on their “feelings, thoughts, and actions”

and therefore, to the motivation mechanisms they will use (Higgins, 1998). More specifically, leaders with a promotion focus are concerned with accomplishments, hopes, and aspirations, whereas leaders with prevention focus are preoccupied with security, obligations, and responsibilities as their focus is the (non) existence, of a negative outcome (Higgins, 1997).

Therefore, we expect that leader’s regulatory focus (LRF) has an impact on employee’s

motivation to recognize a problem through the type of regulatory focus they possess and,

consequently, the regulatory strategies and goals they communicate. Consequently, maximal

goals will create a tendency of eagerness to employees to put effort towards the goal, whereas

minimal goals will create a state of vigilance. Furthermore, we propose that the two motivation strategies (eagerness vs. vigilance) of the employees will influence the way they perceive an ill-defined problem situation in terms of opportunities or threats.

Moreover, in addition to the influence of employees’ regulatory motivation strategies (eagerness vs. vigilance) on how employees perceive and recognize problems, future-oriented cognitive process also influences employee’s ability to recognize future successes and future losses (Zheng, Luo, & Yu, 2014). More specifically, prospective thinking, individuals’ ability to “pre-experience” possible futures by mental generating simulation of it in our minds”

(Gilbert & Wilson, 2007; Osman, 2015; Zheng et al., 2014), can increase the information perceived of a future situation and in that way prepare employees for the future. Unfortunately, the effectiveness of cognitive processes, like prospective thinking has been neglected (Fredericks et al., 2019), with only the association of perspective taking to the recognition of opportunities (Prandelli, Pasquini, & Verona, 2016) being investigated. Therefore, in this study we examine the moderation effect of prospective thinking in the relation between employees’

motivation strategies (eagerness vs. vigilance) and problem recognition (opportunities vs.

threats). We propose that prospective thinking will strengthen both relations.

Based on the theory of regulatory theory and especially multilevel model, the theory problem recognition and the theory of prospective thinking we argue for a mediation effect of employees’ regulatory motivation strategies in the relationship of leaders’ regulatory focus and problem recognition in terms of opportunities or threats. More specifically, we argue that leaders’ promotion focus will lead to employees’ eagerness strategies and the recognition of opportunities whereas, leaders’ prevention focus will lead to the motivation of employees’

vigilance strategies and the recognition of threats. Furthermore, we explore the moderation

effect of employees’ prospective thinking in the relationship between employees’ regulatory

strategies and problem recognition. More specifically, we expect prospective thinking to

strengthen both employees’ motivational strategies, eagerness and vigilance, towards problem recognition. We will test this hypothesis with the conduction of an experimental study. To conceptual model of the study it is presented in Figure 1.

This study contributes to the field of problem recognition by providing knowledge on how employees approach and identify ill-structured based on their regulatory focus and the motivation strategies they might adopt. Moreover, it will have an impact on the literature on leader regulatory focus theory (LRF) by providing empirical evidence on the effect of leaders’

regulatory focus on employees’ motivation strategies and behaviors. More specifically, this research will provide valuable insights on how leaders regulatory focus influences employees’

perception of upcoming problems. Finally, with this research we are among the first that investigate the effects of cognitive processes in the relation of employees’ motivation strategies and problem recognition. Therefore, we will contribute to the literature of prospective thinking by exploring its effects on employee’s problem recognition.

In addition to the above theoretical contributions, this research will have several practical implications. The results will provide insightful implications to leaders and organizations on how to improve the problem-solving process by exploring whether and how employee’s motivation mechanisms affect the way they perceive and recognize upcoming problems.

Moreover, further understanding regarding problem recognition process of employees can lead

to a more efficient and profitable idea generation and solution to future problems. Furthermore,

this research will provide valuable insights on how leaders’ regulatory focus and goals

communication influences employees attitudes towards ill-structured problems. The results

may also provide interesting information for organizations on how to select the appropriate

type of leader for a position, based on his regulatory focus. By examining the effect of

employees prospective thinking, we also provide valuable insights on whether employees’

high, or low score of prospective thinking influences their eagerness to perceive future opportunities or their vigilance to perceive threats.

2. THEORY

2.1 Regulatory Focus Theory and Multilevel Approach

Regulatory focus theory was firstly conceptualized by Higgins (1997,1998). It was the result of the extension of the pleasure (or hedonic) principle which states that “people approach pleasure and avoid pain” (Higgins, 1997: 1280). The theory proposes that individuals differ in the way they approach different desired-end states. That is, the way by which individuals approach pleasure and avoid pain is regulated through underlying motivational mechanisms.

Two self-regulatory motivational mechanisms have been distinguished; promotion focus and prevention focus. Promotion regulatory focus refers to one’s motive to come closer to a desired end-state. Prevention regulatory focus refers to one’s motive to distance from an undesired end-state. Individuals differ in their approach of situations in their lives based on their regulatory focus. For example, promotion focus regulates the achievement of gains, while prevention focus regulates the avoidance of losses. According to Higgins (1998:2), individuals’

self-regulatory focus has “a major impact on people’s feelings, thoughts, and actions”.

Promotion focused individuals strive to come closer to their ideal self (i.e. maximal

goals) (Kark & Van Dijk, 2007) and therefore strive for “advancement, growth and

accomplishment” (Higgins, 1997: 1282). They are more prone to experience positive emotions

like excitement towards gains and focus on rewards and innovation. On the other hand,

prevention focused individuals strive to be matched with their “ought selves” (i.e. minimal

goals) and they are more concerned about “insuring safety, being responsible and meeting

obligations” (Higgins, 1997: 1282). The avoidance of negative results and the fulfillment of

obligations is the primary goal of the prevention focused individuals.

Furthermore, individuals’ regulatory focus does not only influence the goals they strive for, but also the approaches and strategies they adopt while they strive to achieve them (Ciuchta, Letwin, Stevenson, & McMahon, 2016; Parker, Bindl, & Strauss, 2010). Promotion focused individuals strive to reach their desired end-state by adopting eagerness strategies and are sensitive to positive information. Prevention focused individuals adopt vigilance strategies and they tend to be attuned to negative information in order to achieve their goals (Ciuchta et al., 2016; Crowe & Higgins, 1997). It is important to mention that although a promotion or prevention focus is generally triggered by someone’s chronic tendency to experience one of the two foci, it is also stimulated from salient situational factors (Wu, McMullen, Neubert, &

Yi, 2008). Therefore, an individual is possible to experience only one or both foci in different levels. Moreover, individuals may experience different levels of foci either as states or as traits.

That is, regulatory focus operates in different levels (Johnson, Smith, Wallace, Hill, & Baron, 2015). Finally, it is also possible for individuals to not experience any particular focus (Lanaj, Chang, & Johnson, 2012; Wu et al., 2008).

In order to have a better understanding of the regulatory focus theory and its application

to individuals, teams and organizations, a multilevel model has been conceptualized (Johnson

et al., 2015). According to Higgins (1997), regulatory focus motivation mechanisms operate

across different levels. The multilevel theory of the regulatory focus theory creates a hierarchy

between the different levels of the regulated motivation approaches and behaviors of

individuals. Within this hierarchy the different levels are independent (Scholer & Higgins,

2008). Thus, the regulatory focus at one level is independent and might differ from the

regulatory focus at another level. Furthermore, the multilevel perspective explains the

existence of an influential effect between the different levels under specific circumstances like

the relationship between a leader and an employee (Johnson et al., 2017). The analysis of

individual’s regulatory focus in different levels offers an in-depth understanding of how

regulatory focus operates and help us with the development of our argumentation regarding a trickle-down effect of regulatory focus that will be presented. The three levels that have been distinguished are the system, strategic, and tactical level (Higgins, 1997)

Firstly, the system level operationalizes the preferred end-state of individuals and as a result the orientation of their goals (e.g. promotion vs. prevention). More specifically, it refers to individual’s general perception of life and of the world which tends to be consistent thought different situations. Johnson et al. (2015), explained that two individuals may have the same end goal for different reasons. An example is career success. A promotion-oriented individual will expect to experience the pleasure of achieving and the pain of not achieving career success as a consequence of a need for growth and advancement. A prevention-oriented individual is expecting to experience the pleasure of not failing and the pain of failing as a consequence of a need of safety and responsibility (Johnson et al., 2015:1504). The desirable end-state and goal of both individuals is regulated from their focus, promotion or prevention.

Secondly, the strategic level of the multilevel conceptualization of regulatory focus refers to the preference of strategies (e.g. eagerness vs. vigilance) adopted towards the achievement of a goal from individuals (Higgins, 1997). That is, the means and the strategies in which individuals engage to achieve their desired end-state independently of which this might be (Johnson et al., 2015). For example, promotion-focused individuals as more interested to successes are more likely to demonstrate willingness and to prefer eager strategies, as a low threshold for projects approval and a lack of due diligence (Johnson et al., 2015:1504). On the other hand, prevention-focused individuals are more concerned to avoid risks and failures and therefore are more likely to prefer vigilant strategies and approve projects that do not fail.

The third and last level is the tactical level which refers to the specific behaviors

(tactics) adopted from individuals while perusing a goal. The tactical level differs from the

strategic level because it is the actual and instant manifestation of an individual’s strategy in a

situational context (Johnson et al., 2015). That means that tactics simulates strategies which can be influenced and adjusted from situational factors. In accordance with the previous examples, an individual might change his/her behavior towards the approval of a project following the guidance of his/her supervisor. That is, an individual prone to develop eager strategies might increase his/her risky behavior and increase the level of threshold project approval if his/her supervisor indicates that the organization needs higher profitability from new projects. Similarly, in the same situation an individual prone to vigilant strategies (prevention focused) might change his/her behavior to a high threshold of projects approval.

Furthermore, Johnson et al. (2017) argued for an influence between the different levels of the multilevel regulatory theory. The regulatory focus at one level may influence the regulatory focus of another level. Specifically, they showed that the system level of the regulatory focus model can influence the strategic level of the same model. That is, the goals the individuals are striving for, promotion or prevention, can influence the motivation strategies, eagerness or vigilant of others. This relationship is mediated by the behaviors and the salient cues by which individuals’ goals are expressed. That influence is also visible in the suggested hierarchy of the multilevel regulatory model (Higgins, 1997; Johnson, et al. 2015) with the addition of the tactical level of the model. Thus, the system level of regulatory focus leads and influence the strategic level which further influence the tactic level of the regulatory focus. Individuals goals regulated from ones’ regulatory focus, influence others’ regulatory motivation strategies which consequently might influence the behaviors and the actual manifestation of the strategies. Overall, the theory described above is the basis of this research.

2.2 Leaders’ regulatory focus

In the organizational context, the application of the multilevel regulatory focus model

can be encountered through leadership. Regulatory focus theory explains the existence of two

different underlying motivation systems through which individuals can achieve different desired end-states (Crowe & Higgins, 1997). As firstly Kark & Van (2007) asserted, since leadership’s primary focus is to achieve different desired end-states, drawing into regulatory focus theory to explain the possible outcomes of leadership’s influence is more than appropriate. Leaders’ behavior differs according to their regulatory focus (Kark & Van Dijk, (2007). Promotion-focused leaders are prone to take risks and be more positive towards innovative ideas. Prevention-focused leaders are more concerned on how to preserve current methods, maintain security, and fulfil their duties and obligations (Higgins 1997).

The regulatory focus of a leader is manifested through the goals he or she attains (Crowe

& Higgins, 1997). Therefore, in our study, we conceptualize leaders’ regulatory focus as the goals they set. A promotion-focused leader strives for advancement and gains, while a prevention-focused leader is preoccupied with the fulfillment of obligations and responsibilities. Therefore, promotion-focused leaders strive for maximal goals (i.e. gains, ideals, and advancements), while prevention-focused leaders strive for minimal goals (i.e., non- losses, responsibilities and security). Based on the multilevel theory of regulatory focus, the orientation of leaders’ goals, prevention or promotion, refers to the system level.

Moreover, the regulatory focus of a leader has various consequences in their behaviors

and the language they use (Brockner, Higgins, & Low, 2004). For example, a promotion-

focused leader focusses on ideals and will repeatedly remind to his or her employees the

organizational vision they strive for. On the other hand, a prevention-focused leader will focus

more on responsibilities and obligations and will continuously remind his or her employees the

mutual responsibilities that they have to each other.

2.3 Employees’ motivation strategies

As mentioned before, regulatory focus theory argues that individuals can have the same goals but can differ in the approaches and strategies they adopt while they strive to achieve them (Higgins, 1997). According the multilevel perspective of the theory, these strategies refer to the means individuals use to achieve their goal and therefore operate on the strategic level.

Two cognitive motivation strategies have been distinguished: eagerness and vigilance.

Promotion-focused employees tend to adopt eagerness means to pursue their goals as they want to ensure positive outcomes (Brockner & Higgins, 2001). Eagerness strategies focus on advancement and to gains. Prevention-focused employees tend to adopt vigilant means to pursue their goals as they want to ensure the absence of negative outcomes. Vigilant strategies focus on ensuring safety and non-losses.

Those regulatory motivation strategies lead in different consequences in employees’

conceptual thinking, their emotions and behaviors (Kark & Van Dijk, 2007). Those antecedents attracted the interest of researchers who in turn conducted a number of empirical studies. In respect of task behaviors, the outcomes of Crowe and Higgins (1997) research showed that employees’ motivation strategies, eagerness and vigilance, lead to risk taking or risk averse behaviors respectively. That means that employees motivated by eagerness are more likely to take risks, experiment and try different directions. On the other hand, employees engaged in vigilant strategies are more likely to avoid risks, choose the safest paths and follow the rules.

Furthermore, studies argue that regulatory motivation strategies lead to more creative or non-

creative behaviors (Kark, Van Dijk, & Vashdi, 2018). Employees’ eagerness strategies enhance

their creativity and abstract thinking as they make them more tuned to creative cues, whereas

vigilant motivated employees are more careful and tend to follow the rules that their supervisor

or organizations state.

Moreover, the two regulatory motivation strategies lead to different cognitive strategies. For example, studies showed that according to the motivation strategies that employees are engaged to, they might be more or less open to changes. That is, employees motivated to be eager tend to be open to changes whereas vigilant employees tend to prefer stability. They select positions that are characterized by repetitive tasks and are not willing to separate themselves from items they process. Furthermore, one more cognitive consequence of engaging to eagerness or vigilant motivation strategies is the sensitivity to positive or negative outcomes. That means that employees with promotion focus are eager to approach the cues they receive in a positive way whereas prevention focus employees are vigilant and approach the cues they receive negatively. For example, the study of Kark, R., & Van Dijk, D. (2007) showed that promotion focused employees are more tuned to positive feedback while prevention focused employees are more tuned to negative feedback. Therefore, we can argue that the motivation strategies employees adopt are associated with various cognitive processes like risk taking, decision making and problem solving.

2.4 Relationship between leaders’ regulatory focus and employees’ regulatory strategies Higgins argued that there is an influence between the regulatory focus of a person and the regulatory focus of a significant other (Higgins, 1997: 1282). More specifically, in a later research, Brockner and Higgins (2001:60), suggested that people in authority are capable of shaping the regulatory focus of their followers. In a working environment, leaders are the ones with authority over the employees (Naidoo, 2016). Therefore, through their behaviors and motivational approaches, leaders can shape employees’ behaviors (R. E. Johnson et al., 2017;

Naidoo, 2016; Wu, McMullen, Neubert, & Yi, 2008). That is, supervisors’ regulatory focus

can influence the regulatory focus of an employee for certain amount of time (Wu et al., 2008).

The effects of this relation recently attracted the interest of researchers who stated its importance (Brockner and Higgins, 2001; Kark &Van Dijk, 2007; Wu et al., 2008) and researched its implications. Brockner and Higgins (2001), stated that the role modeling position of leaders is what gives them the power to influence followers’ regulatory foci and their emotional reactions. He gave as example the role modeling relationship of a mother and a child.

The result of the experiment that was conducted showed that the more a mother was experiencing prevention focused feelings the more the child did too. And similarly, the more the mother was experiencing prevention focused feelings the more the child did as well.

Therefore, the regulatory focus of a leader can influence the regulatory orientation of an employee, based on the role modeling position of the first one to the second one.

Furthermore, research showed that leaders, through their behavior and the language they use, they send salient cues that influence followers’ motivation (Kark & Van Dijk, 2007;

Johnson et al., 2017). The behaviors and the language leaders use as well as the goals they set create a context. This context define how employees should behave and the tactics they need to adopt. Thus, promotion-focused leaders, by setting maximal goals (i.e., gains, ideals, and advancements) and with the use of promotion language, motivate employees to be eager and to seize the opportunities they face. Whereas, prevention-focused leaders, by setting minimal goals (i.e., non-losses, responsibilities and security) and the use of prevention language, prompt their employees to be more vigilant and concerned about detecting potential threats in the environment (Ciuchta, et al., 2016; Wu et al., 2008). Therefore, employees will adopt the motivation strategies that leaders’ behaviors, language and the goals indicate.

To conclude, we argue for an influence relationship of leaders’ regulatory focus in employee’s motivation strategies drawing upon the multilevel model. That is system level (i.e.

leader’s regulatory focus) influences the strategy level (i.e. employees’ motivation strategies).

Johnson et al. (2017), point out the existence of a trickle-down effect of regulatory focus.

Leaders’ regulatory focus influence the ways they enact towards their employees (i.e. language, behavior, goals) and that consequently influence employees’ regulatory strategies. As mentioned before, the context that leaders’ regulatory focus creates, indicate the means that employees might adopt. Leaders with promotion focus will set maximal goals and might influence employees to adopt eagerness motivation strategies and behaviors like being more sensitive to positive problem cures. Leaders with prevention focus will set minimal goals and might influence employees to adopt vigilant motivation strategies and behaviors like being more sensitive to negative problem cues. With that said, the first hypothesis we are making is that leaders’ regulatory focus expressed in goals, (i.e. system level), influences employees’

eager strategies (i.e. strategic level), while, prevention-focused leaders’ goals influence employees’ vigilant strategies.

Hypothesis 1Α: Leader promotion focus will result in more employee eagerness strategy than leader prevention focus.

Hypothesis 1B: Leader prevention focus will result in more employee vigilance strategy than leader promotion focus.

2.5 Problem recognition

As problem is defined a gap between the current and a desired (or undesired) end-state

(Basadur, Ellspermann, & Evans, 1994). Most of the problems seeking solution are not known

or cannot simply be stated. More specifically, in an organizational environment, the problems

which employees face are ill-defined and complex (Pretz, Naples, Sternberg, 2003). Therefore,

before proceeding to the determination of a solution of a problem, it is necessary to first

recognize it in a given context (Basadur, Ellspermann, & Evans, 1994). Thus, the very first

stage of creative problem-solving process is the problem recognition (or identification) followed by the definition and the mental representation of the problem (Pretz, Naples, Sternberg, 2003). Problem recognition is described by Cowan (1986) as “a variety of ongoing activities (…) depending on both situational and individual factors”. The duration of it can last from seconds to years (Cowan, 1986:764). Sometimes this (cognitive) process can be automatic but sometimes conscious effort is needed in order for a problem to be recognized (Cowan, 1986).

Given the ambiguity of ill-defined problems and the complexity of problem recognition process, the results of it can vary. Mumford (2000) mentioned that ill-defined problems require to firstly be recognized in order to be solved. Problem recognition as part of the creative problem-solving process (Pretz, et al., 2003) is a thorough and effortful cognitive process (Reiter-Palmon & Illies, 2004). However, not all individuals have the same cognitive abilities to recognize problems in the same way. That means that problems can be perceived and recognized in different ways (Reiter-palmon, Mumford, Boes, & Runco, 1997). According to Getzels (1979), the engagement of individuals to problem recognition can be perceived as a way to receive pleasure and serve their well-being or as an undesired situation that individuals want to avoid. Therefore, how a problem will be recognized depends on the approaches adopted from the individuals (Pretz, Naples, Sternberg, 2003). The same problem can be both recognized from an employee as opportunity or as a threat. The recognition of a problem as an opportunity may lead employees to reach successes as far as it is connected with advancement and growth. On the other hand, the recognition of a problem as a threat might lead to the preoccupation of the employee to avoid mistakes and failure (Ciuchta et al. ,2016).

Thus, we argue that especially in cases of ill-defined problems when there are different

possible ways to recognize them, employees will differ in the way they recognize them, either

as opportunities or threats.

Lockwood, et al., (2002) argued that, based on the goals’ individuals strive for and their motivations, they tend to focus only to relevant information to their goals. That is, individuals striving for success and advancement (promotion focused goals) tend to focus more in information signaling opportunities to achieve their goals, whereas individuals striving to avoid failure (prevention focused goals) are more prompt to focus on threats they need to avoid (Lockwood, Jordan, & Kunda, 2002). Additionally, in his model of problem recognition, Cowan (1986) argued that if and how individuals recognize and categorize (i.e. opportunity or threat) a problem depends on their motivation to do it in the first place. The way individuals will recognize and categorize a problem depends on their motivation to do so. Eager employees are more sensitive to positive information and therefore are more eager to recognize an opportunity. Vigilant employees are more sensitive to negative information and try to avoid mistakes and therefore they perceive more threats (Ciuchta et al., 2016).

Drawing upon the multilevel regulatory focus theory, we argue that the differential effects on problem recognition as opportunities or threats can be explained by one’s eagerness or vigilance tendencies (Johnson et al., 2017, Johnson et al. 2015). Employees recognize problems (tactic level) differently based on the motivation strategies (strategic level) they have adopted. Therefore, in this study we propose that the two motivation strategies (eagerness vs.

vigilance) of the employees will influence the way they perceive an ill-structured problem situation. That is, we expect, employees’ eagerness to lead to recognition of opportunities while, vigilance to lead to recognition of threats:

Hypothesis 2A: Employees’ eagerness strategies result in the recognition of problems in terms

of opportunities.

Hypothesis 2B: Employees’ vigilance strategies result in the recognition of problems in terms of threats.

As argued before, leaders’ regulatory focus, expressed by the goals they set, influence the motivation strategies of employees (Kark & Van Dijk, 2016). We also argued that employees’ motivation strategies lead to problem recognition in terms of opportunities or threats (Ciuchta et al., 2016; Lockwood et al., 2002). Since leaders influence the employee’s motivation strategies and these strategies influence the way employees recognize problems, we argue for a mediation effect. Thus, we state the following hypotheses:

Hypothesis 3A: Leaders’ promotion focus, mediated by employees’ eagerness strategies result in the recognition of problems in terms of opportunities more than leaders’ prevention focus.

Hypothesis 3B: Leaders’ prevention focus, mediated by employees’ vigilant strategies result in the recognition of problem in terms of threats more than leaders’ promotion focus.

2.6 Prospective thinking

Besides the argument that the ability to recognize problems as opportunities or threats

is influenced by motivational strategies one must also take into account the fact that individuals

have different cognitive abilities that also play a role in this process. The ability to recognize a

problem is strongly connected with the ability of employees to imagine the future. The brain

has the ability to build mental representations of future events by combining incoming

information with memories (information) stored from the past (Gilbert & Wilson, 2007; Silk,

2002; Zheng, Luo, & Yu, 2014). That is, brain creates simulations of possible future events

resulted from hedonic reactions which allow individuals to predict the hedonic reactions they

will experience when the future that have simulated occurs in reality. The existence of this

future-oriented cognitive process is important in order to prepare individuals for the future (Bulley, Henry, & Suddendorf, 2016) and it is named prospective thinking. Prospective thinking is defined as the “ability to pre-experience the future by simulating it in our minds”

(Gilbert and Wilson, 2007:1352). Prospective thinking allows individuals to plan and think about possible futures and set goals (Zheng, Luo, & Yu, 2014). By planning and simulating possible futures, prospective thinking allows individuals to ensure possible future successes and prevent possible future losses before they occur (Zheng et al., 2014). Thus, through prospective thinking employees have the ability to pre-experience possible futures and obtain important information of what is coming (Osman, 2015). Research reveals a connection between entrepreneurial cognitive processes (i.e. ideas generation) and future-oriented processes, like prospective thinking (Baron, 2006; Fredericks et al., 2019). More specifically, the research of Frederick et al. (2019) showed that individuals with a high level of prospective thinking generate higher quality of new venture ideas (NVIs). Prospective thinking is a combination of creative thinking with insights of reality (Brauers, 2004).

We already mentioned that the motivation strategies of an employee alone are not enough to recognize a problem. Other cognitive processes are involved in the problem recognition process and can influence the relationship we argued in the Hypothesis 3. More specifically, we propose that cognitive abilities like future oriented cognitive process can strengthen the relationship between employees’ motivation strategies and problem recognition.

Based on previous research, employees by simulating possible futures are able to gather valuable information concerning possible futures. The information employees gather through prospective thinking help them generate ideas (Fredericks et al., 2019). Since problem recognition is the first step of idea generation process, it is logical to expect that employees’

prospective thinking will also facilitate that step. We expect that the employees’ degree of

prospective thinking will moderate the relationship between employee motivation strategies and problem recognition.

We argued that employees’ motivation strategies lead to the recognition of problems in terms of opportunities or threats. Recognizing a problem as an opportunity or a threat is a way for individuals to receive pleasure or avoid an undesired situation of the future (Higgins, 1997).

Prospective thinking is also used to prepare individuals for the future (Gilbert & Wilson, 2007).

Employees through the generation of simulations can ensure possible future successes and prevent possible future losses before they occur (Zheng et al., 2014). Consequently, we can expect that the future orientation of prospective thinking enables employees that have the motivation to recognize problems to do it more successfully. That is, when employees are eager to recognize opportunities and score high in prospective thinking, the relationship between employees’ eagerness and the recognition of opportunities will be strengthened as prospective thinking increases their cognitive ability. Conversely, when employees are eager to recognize opportunities, but they are scoring low in prospective thinking the relationship will be weakened. Furthermore, we expect that when employees are vigilant to recognize threats and score high in prospective thinking the cognitive process will be strengthened. On the other hand, when employees are vigilant to recognize threats and score low in prospective thinking the relationship will be weakened. Therefore, the two considered hypotheses are:

Hypotheses 4A: Prospective thinking will strengthen the relation between employee eagerness strategies and employee recognition of opportunities.

Hypothesis 4B: Prospective thinking will strengthen the relation between employee vigilant

strategies and employee recognition of threats.

3. METHOD

3. 1. Design

In order to test the hypotheses, a lab experiment was conducted. By conducting a lab experiment, we ensure that all the hypotheses are tested at the same environmental context and the results are consistent. The study took place in the Research Lab of the Faculty of the Business and Economics of the University of Groningen and the total number of participants was three hundred nineteen (319) students of the Faculty. The experiment was conducted in English in order for all the students to be able to participate whether they are Dutch or of other national origins. All the participants were compensated with course credits or a small amount of money. The experiment was conducted with the use of Qualtrics software system which created a business context for the participants. During the experiments the participants played the role of the employees. With the start of the experiment half of the participants were assigned in the first condition (promotion-focused leader) and the rest/the other half in the second condition (prevention-focus leader).

3.2. Participants

From a total of three hundred nineteen participants (319), eighty-nine (89) were

excluded from the data analysis. The first sixty-two (62) participants were excluded from the

study due to a technical issue diagnosed in the end of the second day of the study, which caused

inconsistency in the data. The exclusion of the rest twenty-seven (27) participants was due to

reasons as “false submission of attention checks” or “experience technical issues” which made

their answers invalid. Therefore, valid participants were two hundred thirty (230) students (98

male, 132 Female). From them, one hundred thirteen (113) participants were assigned in the

first condition (promotion-focused leader) and the rest one hundred seventeen (117) were

assigned in the second condition (prevention-focused leader). The age of the participants ranged from 17 to 35, with a mean of 21,14 (SD = 2.7).

3.3. Procedures

The goal of the experiment conducted was to investigate the effect of leaders’

regulatory focus on employees’ problem recognition. In the conduction of the experiments one more student was involved beside me. The overlapping of our master thesis topics made it convenient and feasible to create the experiment. We informed the participants that the study consisted of three parts and that we were interested in the study of their response in challenges.

In the first part of the study, participants were asked to fill in three questionnaires. The Employees Regulatory Strategies measure and the Employee Prospective Thinking measure.

In the next part of the study, we welcomed the participants in the interactive business task in which we influenced them to play the role of the employee. They were introduced to a hypothetical company called “StanEl” (in the Appendix B one can find the description of the company) and we informed them that they were part of a multifunctional consisted of three members and a leader. Afterwards, participants were told that the company recently decided to introduce a new internal communication system. They received an introductory email of the new communication system and they were influenced to check the profile of their supervisor

“Robert Jones”. Participants read a brief profile of their leader which stated promotion or

prevention goals for the company with the use of promotion or prevention (see Appendix C for

the leader profiles). Participants were assigned randomly in one of the two profiles and

conditions (promotion vs. prevention focus leader profile). Next, participants received an email

from their leader, informing them about the goals which their team was striving for (see

Appendix D for the team’s goals). A manipulation of leader’s promotion or prevention focus

took place with the use of promotion or prevention language in the email’s that participants

received. Thereafter, participants received a second email from their leader, that is important to always stay informed about the trends that influence the market of the company (external trends) and the company itself (internal trends) (see Appendix E for the trends). In that email, the supervisor asks the participants to provide their insights regarding those trends. Participants were next asked to rate each one of the trends as a threat or opportunity in a 7-point Likert scale, ranging from 1. “Extremely unlikely” to 7. “Extremely likely”. They were also asked to rate each trend in 7-point Likert scale, ranging from 1. “Opportunity” to 7. “Threat”. The trends were presented to the participants in a random order. After grading the trends, participants moved to the third and last part of the study. In the last part they were asked to fill in again the Employees Regulatory Strategies measure, the Prospective Thinking measure and their demographics (gender, age, etc.).

3.4. Manipulation

Leader regulatory focus. The Regulatory Focus of the Leader (LRF) in this experiment

was manipulated both through the leader profile the participants received which inhere

promotion or prevention language (see Appendix C leaders profile) and through the email

which was sent from the leader to the participants explaining the goals for which the team was

striving for (see Appendix D for the team’s goals). In the promotion focused email (N = 113),

the leader mentioned that in StanEl they had to make sure that they lived up to the ideals, hopes

and aspiration of their shareholders and therefore to maximize the profits and to realize

progress and growth. Moreover, Robert advised the participants to be as eager as possible and

to embrace the opportunities enthusiastically. On the other hand, in the promotion focused

email (N = 117), Robert informed the participants that in StanEl they had to make sure that

they do not neglect to fulfill their responsibilities, duties, and obligations. That is, minimize

the loses and avoid insecurity and uncertainty. Additionally, Robert advised the participants to

be as vigilant as possible by being concerned of avoiding mistakes. The prevention and promotion goals were also mentioned in the profiles of the leader.

In addition, a manipulation check was used. The participants were asked to indicate the extent to which Robert’s motivation was promotion focused or prevention focused.

Specifically, it was used a measurement with eight items, four for promotion regulatory focus and four for prevention regulatory focus, rated on a 7-point Likert-scale, ranging from 1.

“strongly disagree” to 7. “strongly agree”. Each item started with the sentence “During the StanEl tasks, my manager Robert Jones motivated me to primarily focus on…”. For promotion focus manipulation check the four statements used were “achieving positive outcomes”,

“achieving success”, “my aspirations and ideals”, “fulfilling my tasks as successful as possible”

(α = .78). For the prevention focus manipulation check the four statements used were “avoiding negative outcomes”, “avoiding failure”, “my duties and responsibilities”, and “fulfilling my task as correct as possible” (α = .85). All the manipulation messages can be found in Appendix C and D.

3.5. Measures

The measures of this experiment were employee’s regulatory strategies, employee’s prospective thinking, and problem recognition as opportunities or as threats.

Employee regulatory strategies. Employee’s regulatory eagerness and vigilance were measured with the use of the scale developed by Vriend, et al. (2018). The items of the questionnaire were rated on a 7-point Likert-scale, ranging from 1. “strongly disagree” to 7.

“strongly agree”. The questionnaire consisted of 6 questions, three for each strategy. To

measure eagerness strategies the items are: “To attain my goals I enthusiastically embraced all

opportunities”, “I was eager to use all possible ways or means”, “I was eager to take all

necessary action” (α = .79). To measure vigilance the items are: “To attain my goals I was

concerned with making mistakes”, “I was cautious about going down the wrong road”, “I was vigilant and played it safe” (α = .85).

Problem Recognition: In order to measure how participants tend to recognize problems as a threat or as an opportunity, they were asked to indicate the extent to which they think different trends (internal and external) might be opportunities or threats. Participants had to rate the extend of each trend’s as opportunity or as threat, in a 7-point Likert scale ranging from 1. “Opportunity” to 7. “Threat”. Additionally, they were asked to rate each trend (internal and external) in a 7-point Likert scale ranging from 1. “Opportunity” to 7. “Threat”. The external trends selected were “Access to international markets”, “Customer needs”, “Price wars and net profit margins on products” and “Rapid product developments in the market”. The internal trends presented to the participants were “Innovation of own products”, “Location of the company / accessibility for customers”, “Responding to developments in the IT sector”, and

“Retaining current customers”. The trends are stated in the Appendix E.

Prospective thinking. To measure the prospective thinking of the participants we used

the items created from the Fredericks, et al., (2019). The questionnaire consisted of eleven

items rated in a 7-point Likert scale ranged from 1. “Never” to 7. “Very often”. The

questionnaire was measuring prospective thinking, counterfactual thinking, and perspective

thinking. The items of the questionnaire were “…I thought about how much better I could have

performed”, “…it was important to take the perspective of someone else”, “…I thought about

the future even though I did not intend to do so”, “…I tried to understand the perspective of

someone else”, “…I believed my thoughts about the future would definitely happen”, “…I

thought about how much worse I could have performed”, “…I tried to take the perspective of

someone else”, “…I was instructed to take the perspective of someone else”, and “I found

myself daydreaming about the future”. The items no. 3, 5, 8, and 11 were measuring

prospective thinking (α = .86), while the items no. 1,6, and 10 were measuring Counterfactual

thinking (α = .87). Lastly the items no. 2, 4, 7, and 9 are measuring Perspective taking (α = .81).

Control Variables. As control variables we used age and gender. Prior research on leaders’ regulatory focus has showed that gender can influence the result due to familiarity effect (Van Vianen, Shen, & Chuang, 2011). Moreover, demographic characteristics like age and gender reveal an influence in the results of cognitive ability studies. In addition, Promotion focus and Prevention focus participants traits were also used as control variables. To measure participants’ regulatory focus, the scale developed by Vriend, et al. (2018) was used. The measurement consisted of twenty-four items, rated on a 7-point Likert-scale, ranging from 1.

“Fully disagree” to 7. “Fully agree”. Twelve of items measuring promotion focus (α = .89), and twelve items measuring prevention focus (α = .87). The items of the measurement are shown in Appendix F.

4. RESULTS

4.1 Manipulation Check

In order to examine whether the manipulation of the leaders’ regulatory focus was

successful, we performed two independent samples t-tests. First, an independent-sample t-test

was conducted to compare the promotion focused statements of the manipulation (DV) in the

promotion-focused leader and in the prevention-focuses leader condition (IV). The test

revealed that there was a significant difference in the scores for the promotion-focused leader

condition (M =5.50, SD = .82) and the prevention-focused leader condition (M = 4.16, SD =

1.30); t (228) = -9.37, p = .000. These results suggest that in the condition of the promotion-

focused leader, participants indicated a greater extent of promotion statements than of

prevention statements. Secondly, an independent-sample t-test was conducted to compare the

prevention focus statements of the manipulation (DV) in the promotion-focused leader and in

the prevention-focuses leader condition (IV). The second test also revealed, that there was a significant difference in the scores for the promotion-focused leader (M = 4.50, SD = 1.28) and the prevention-focused leader (M =6.20, SD = .85) conditions; t (228) = 11.81, p = .000. These results suggest that, in the prevention-focused leader condition, participants indicated a greater extend of prevention statements than of promotion statements. Therefore, the manipulation was considered “successful”.

4.2 Descriptive Analyses

The results of the descriptive analysis of all the variables used in the study are presented in the Table 1. The Table 1 includes the means, standard deviations, and the correlations of gender, age, LRF manipulation, employee strategies; eagerness and vigilance, recognition of opportunities, recognition of threats, and the cognitive processes; prospective thinking, counterfactual thinking, and perspective taking. As expected, leaders’ regulatory focus (Leader prevention focus was coded as 0, and Leader promotion focus as 1) experienced a positive and significant correlation with the opportunity recognition (r = .23, p < .01, M = .51, (SD = .50)), whereas with the threat recognition experience a negative and significant correlation (r = -.24, p < .01, M = .51, (SD = .50)). Moreover, leaders’ regulatory focus was significantly and positively correlated with eagerness (r = .31, p < .01, M = 5.07, (SD = 1.12)), while it was significantly and negatively correlated with vigilance (r = -.31, p < .01, M = 4.47, (SD = 1.43)).

Furthermore, as also expected, eagerness was significantly and positively correlated with the

recognition of opportunities (r = .31, p < .01, M = 5.40, (SD = .75)), whereas vigilance was

significantly and positively correlated with the recognition of threats (r = .22, p < .01, M =

4.21, (SD = .82)). Furthermore, regarding the three cognitive process we tested, prospective

thinking was significantly and positively correlated with eagerness (r = .14, p < .05, M = 4.82,

(SD = .93)) and significant and positively correlated with the recognition of opportunities (r =

.14, p < .05). No significant correlation was revealed with the recognition of threats.

Counterfactual thinking variables have not experienced any significant correlation. Lastly, perspective taking experienced a significant and positive correlation with the recognition of threats (r = .15, p < .01, M = 4.88, (SD = .86)). Finally, it is also important to mention that gender (male was coded as 1 and female was coded as 2) was significantly and positively correlated with the prevention focus trait (r = .22, p < .01, M = 1.57, (SD = .50)).

--- Insert Table 1 --- 4.3 Hypothesis testing

For the hypothesis testing we used PROCESS macro by Hayes (2013). To examine the mediation effect of employees’ regulatory strategies (eagerness vs. vigilance) in the relationship of leaders’ regulatory focus (promotion focus vs. prevention focus) and problem recognition (opportunities vs. threats), we created two models and we conducted a regression analysis with the use of Model 4 in PROCESS macro by Hayes. In the first model, we regressed recognition of opportunities on leaders’ regulatory focus (leader promotion focus vs. leader prevention focus) and on employees’ eagerness strategies. In the second model, we regressed recognition of threats on leaders’ regulatory focus (leader promotion focus vs. leader prevention focus) and on employees’ vigilance strategies. To examine the moderation effect of prospective thinking in the relationship between employees’ regulatory strategies and the recognition of opportunities or threats we performed a regression analysis with the use of model 14 of PROCESS macro by Hayes. The results of the independent variables were standardized for the analysis. The results of the regression analysis are shown in Table 2.

Leader Regulatory Focus, Employees strategies and problem recognition. Hypothesis

1A stated that leaders’ promotion focus will result to more employees’ eagerness strategies that

leaders’ prevention focus. As expected, leaders’ promotion focus was significantly and positively related with employees’ eagerness strategies (B = .63), t (224) = 4.64, p <.001).

Therefore, the hypothesis 1A was supported. Moreover, the hypothesis 1B, stated that leaders’

prevention focus will result to more employee vigilant strategies than leader’s promotion focus.

The results of the analysis showed that leaders’ prevention focus were negatively and statistically significant related with employees’ vigilant strategies, as hypothesis 1B suggested (B = -.84), t(224) = - 4.99, p < .001). Furthermore, hypothesis 2A stated that employees’

eagerness strategies will result to problem recognition in terms of opportunities. The results of the analysis supported hypothesis 2A. Employees’ eagerness strategies were positively and statistically significant with the recognition of opportunities (B = .15), t(223) = 3.28, p < .001).

Similarly, the hypothesis 2B stated that employees’ vigilance strategies will result to problem recognition in terms of threats. Hypothesis 2B was also supported with employees’ vigilant strategies to experience a statistically significant relation with the recognition of threats (B = .09), t(223) = 2.13, p < .005).

Furthermore, hypothesis 3A suggested that leaders’ promotion focus will be mediated from employees’ eagerness to result in the recognition of opportunities more than leaders’

prevention focus. The results suggested a positive and statistically significant direct effect

between leaders’ promotion focus and the recognition of opportunities (B = .24), t(223) = 2.42,

p < .02). The support of Hypothesis 1A and 2A reveal a significant indirect effect in the

relationship. Therefore, the mediation effect of employees’ eagerness strategies in the

relationship between leaders’ promotion focus and the recognition of opportunities was fully

supported (effect eagerness = .10, SE = .04, 95%, CI = (.03, .18)). Therefore, hypothesis 3A

was fully supported. We also examined whether leaders’ prevention focus, mediated by

employees’ vigilant strategies, result in the recognition of threats more than leaders’ promotion

focus, as stated in the hypothesis 3B. The analysis resulted to statistically significant direct

effect. Thus, leaders’ prevention focus is significant related to the recognition of threats (B = - .32), t(223) = -2.85, p < .005). With the support of hypothesis 1B and 2B, the results suggest a significant indirect effect. Therefore, the hypothesis of employees’ vigilance strategies mediation effect to the relationship between leaders’ prevention and the recognition of threats is also supported (effect vigilance = -.07, SE = 0.5, 95%, CI = (-.17, .00)).

Prospective thinking as moderator. Finally, we tested the moderation effect of prospective thinking in the relationship of employees’ motivation strategies (eagerness or vigilance) and problem recognition (opportunities or threats). Hypothesis 4A stated that prospective thinking will strengthen the relationship of employees’ vigilant strategies and recognition of opportunities. However, the results of the effect were not significant (B = -.00), t(221) = -.01, p > .10). Therefore, the Hypothesis 4A was not supported. Furthermore, we examined hypothesis 4B which stated that prospective thinking will strengthen the relationship employees’ vigilance strategies and the recognition of threats. However, neither this moderation was significant (B = .03), t(221) = .84, p > .10). Thus, moderation hypothesis 4B was not supported.

5. DISCUSSION

The aim of this research has been the improvement of our understanding of how

leadership can influence the ways employees recognize and approach ill-defined problems. We

proposed that leaders’ regulatory focus and the way it is expressed to employees through their

behavior and the language they use, influences the motivation strategies that employees adopt

(eagerness vs. vigilance). That is, promotion-focused leaders through the maximal goal (i.e.,

gains, ideals, and advancements) they set, motivate employees to be eager. Whereas,

prevention-focused leaders by the minimal goals (i.e., non-losses, responsibilities and security)

they set, influence employees to be vigilant and concerned about avoiding mistakes.

Furthermore, we expected that when employees are engaged in either eagerness or vigilant motivation strategies, they will be more tuned in positive and negative problem cues, respectively. Consequently, we argued that, in situation in which two-sided information are given, namely ill-defined problems, employees will recognize them either as opportunities or threats. Thus, we proposed that employees’ eagerness strategies will lead to the recognition of opportunities, whereas employees’ vigilant strategies will lead to the recognition of threats.

Finally, we argued for the moderation role of employees’ motivation strategies (eagerness vs.

vigilance) to the relationship of leaders’ regulatory focus and employees’ problem recognition (opportunities vs. threats). The hypotheses were tested in an experimental study.

As expected, leaders’ promotion focus was positively and statistically significant associated with employees’ eagerness strategies. Therefore, the hypothesis 1A was supported.

Moreover, employees’ eagerness strategies were also significant and positively associated with the recognition of opportunities. Thus, the hypothesis 2A was also supported. The effect of leaders’ regulatory focus in problem recognition in terms of opportunities was also significant.

Finally, the mediation analysis confirmed the existence of a mediation effect of employees’

eagerness strategies in the relation of leaders’ regulatory focus and the recognition of opportunities. Therefore, hypothesis 3A was also confirmed as expected and as argued from the literature in this research.

Furthermore, leaders’ prevention focus was negatively and statistically significant

related to employees’ vigilant motivation strategies, as expected. Thus, the second part of the

first hypothesis 1B, was also supported. The analysis results also showed a significant effect

between employees’ vigilant strategies and the recognition problems in terms of threats, as

hypothesis 2B stated. Moreover, leaders’ prevention regulatory focus was significant related

with the recognition of threats. Finally, a mediation effect of employees’ vigilant strategies in

the relationship between leaders’ prevention focus and the recognition of threats was detected in contrast with leaders’ promotion focus. Thus, Hypothesis 3B was also supported.

In this research, we have also examined the moderation role of prospective thinking in the relation between employees’ regulatory motivation strategies and the recognition of problems in terms of threats or opportunities. We argued for a strengthening effect of prospective thinking in the relation of employees’ eagerness strategies and the recognition of opportunities, as stated in hypothesis 4A. Additionally, we proposed a strengthening effect of prospective thinking in the relation of employees’ vigilance strategies with the recognition of threats, stated in Hypothesis 4B. However, neither hypothesis 4A nor hypothesis 4B were supported. This may be due to the fact that the scale used to measure prospective thinking (Fredericks et al., 2019) was not adjusted to our study and that might lead to false interpretation from the participants. Furthermore, the literature of prospective thinking refers on it as an ability that “rests to a great extent on our retrospective ability” (Knieps, Granhag, & Vrij, 2014). That is, individuals prospective thinking relies on their episodic memory of situation which have already experience in the past. In such a case, since in our study most of our participants were students, they might not have the chance to experience problems as the ones stated in our experimental tasks. Therefore, their prospective thinking ability might not be able to affect the relation of employee regulatory strategies and the recognition of opportunities.

5.1 Theoretical implications

The aim of this study was to improve our understanding on how leaders approaches and

specifically leaders’ regulatory focus can influence employee’s motivation strategies to

recognize opportunities or threats. Moreover, we are among the first who investigated the

moderation effect of prospective thinking and other cognitive abilities in the relationship

between employees’ motivation strategies and problem recognition in terms of opportunities

or threats. By this study, we believe we contributed to the literature of leaders’ regulatory focus, of creative problem solving and specifically to the not broadly investigated problem recognition and the literature on prospective thinking.

Previous research on leaders’ regulatory focus mentioned that there is a need for further research on the effect of leaders’ regulatory focus to followers’ motivation (Kark & Van Dijk, 2007, & Wu et al., 2008). By this research, we contribute with empirical evidence of the effect of leaders’ regulatory focus in the motivation strategies that employees will adopt. We provide evidence of the effect of both regulatory foci (promotion and prevention) to the influence of employees’ eagerness and vigilant motivation strategies, respectively. We showed that promotion-focused leaders, by setting maximal goals and with the use of promotion language and signals, motivate employees to adopt eagerness strategies to pursue those goals. On the other hand, we also showed, that prevention-focused leaders, by setting minimal goals and by using prevention language, motivate their followers to adopt vigilant strategies. Furthermore, we answered to the call of Wu et al. (2008) for further research concerning the effects of leaders’ regulatory focus on their employees. We did that by investigating the effect of leaders’

regulatory focus to employees’ recognition of problems in terms of opportunities or threats.

Our results showed that promotion-focused leaders influence employees’ recognition of opportunities through the motivation of employees to be eager. Moreover, we provide empirical evidence of prevention-focused leaders influence on employees’ recognition of threat, by motivating them to be vigilant. Therefore, we provide evidence on the influence of leaders’ regulatory focus on employees’ recognition of ill-defined problems in terms of opportunities or threats.

Furthermore, this study contributes to the literature of problem recognition in respect

of regulatory motivation strategies. Despite the fact that previous research have investigated

the effects of individuals’ regulatory strategies on idea generation, problem construction,