Cultivating Innovative Employees: The Influence of Regulatory Focus and Institutional Empowerment

The relationship between regulatory focus, a pivotal trait, and innovative behavior has been long recognized, with previous scholars often emphasizing the reluctance of individuals possessing a prevention focus to engage in innovation due to their risk-averse tendencies. This study introduces a research model proposing that the relationship between promotion focus, prevention focus, and innovation behavior, is positively mediated by knowledge sharing. Additionally, institutional empowerment is posited as a moderating variable that enhances the positive relationship between regulatory focus and knowledge sharing. Empirical investigation of a moderated-mediation model reveals that the impact of regulatory focus on innovation behaviors is mediated by knowledge sharing, with this mediation being more pronounced under conditions of elevated perceptions of institutional empowerment. This research significantly advances the understanding of regulatory focus and its implications for innovation behavior. In addition, it highlights the significance of institutional empowerment as a boundary condition that encourages individuals with diverse regulatory focus to expand their behavioral boundaries. It specifically emphasizes the managerial capacity to leverage the needs and motivations of individuals with a pronounced prevention focus through institutional empowerment, resulting in transformative outcomes even in unfavorable situations.