https://doi.org/10.1177/01492063211016029 Journal of Management Vol. XX No. X, Month XXXX 1–29 DOI: 10.1177/01492063211016029 © The Author(s) 2021 Article reuse guidelines: sagepub.com/journals-permissions 1 CEOs’ Regulatory Focus and Risk-Taking When Firms Perform Below and Above the Bar Matthew P. Mount Deakin University Markus Baer Washington University in St. Louis Both upper echelons theory and the behavioral theory of the firm (BTOF) have made important contributions to our understanding of the drivers of managerial risk-taking. Yet, how the indi- vidual- and organizational-level mechanisms espoused by these theories act in concert to deter- mine risk-taking is not well understood. In this paper, we draw on regulatory focus theory as a fulcrum to bridge these two levels of analyses and integrate insights from both theoretical tradi- tions. Consistent with the BTOF, we argue that promotion-focused CEOs engage in increased (decreased) risk-taking under conditions of performance below (above) aspirations. In contrast to the predictions of the BTOF, however, we predict that prevention-focused CEOs engage in increased (decreased) risk-taking under conditions of performance above (below) aspirations. We find support for these arguments in a large sample of CEOs from publicly listed U.S. firms and discuss the implications of our findings for both theory and practice. Keywords: upper echelons; behavioral theory of the firm; regulatory focus theory; CEO; strategic risk-taking One of the primary goals of management and strategy research is to understand the drivers of managerial risk-taking (Hoskisson, Chirico, Zyung, & Gambeta, 2017). At the individual level, upper echelons theory argues that the psychological properties of CEOs determine Acknowledgments: We would like to thank our editor Brian Connelly and the two anonymous reviewers for their guidance and support throughout the review process. Supplemental material for this article is available with the manuscript on the JOM website. Corresponding author: Matthew P. Mount, Department of Management, Deakin Business School, Deakin University, Elgar Road, Melbourne, VIC 3125, Australia. E-mail: matt.mount@deakin.edu.au 1016029JOM XX X 10.1177/01492063211016029Journal of ManagementMount and Baer / CEO Regulatory Focus and Risk-Taking research-article 2021