Session 112

CEO and TMT Turnover: Firm Implications

Track O

Date: Monday, October 8, 2012

Track L

Time: 13:30 – 14:45

Paper

Room: Meeting Hall V


Session Chair:

  • Paul Ferreira, University of Geneva

Title: CEO Career Horizon and Firm Diversification

Authors

  • Chittima Silberzahn, EMLYON Business School
  • Zied Guedri, EMLYON Business School

Abstract: The CEO career horizon is one of important factors influencing their strategic decision making for the firm. Building upon prospect theory and agency theory, we posit that CEOs approaching retirement will be reluctant to engage in increased diversification and more likely to initiate refocusing strategies. Moreover, we suggest that structure of control, displayed by the ratio of independent directors and CEO duality, moderates the impact of CEO career horizon such that the stronger the structure of control the lower the effect of career horizon on diversification and refocusing strategies. We test our hypotheses using a sample of firms belonging to the FTSE 100 during1997-2010. Our findings lend support to our theses.

Title: Firm Performance Consequences of Top Executive Turnover: A Meta-Analysis

Authors

  • Stephanie Mankel, EBS University
  • Stefan Hilger, EBS University

Abstract: Corporate governance literature suggests that the dismissal of top executives may lead to subsequent firm performance improvements. We provide a meta-analytical assessment of the empirical evidence of 14 studies on the firm performance consequences of top executive turnover. Our overall results suggest that top executive dismissal seems to work reasonably well as a means to enhance firm performance. A comparison of mean effect sizes reveals that performance increases more subsequent to dismissal than to ordinary turnover. Additionally, we find that although turnover announcements lead to positive abnormal stock market returns, accounting data reflect the positive effect to a lesser degree. We argue that stakeholders should not be placated by the event of the turnover, but keep their attention level as the new executive assumes office.

Title: Staying Agile In The Saddle: CEO Tenure, TMT Change, and Organizational Ambidexterity

Authors

  • Paul Ferreira, University of Geneva
  • Sebastian Raisch, University of Geneva

Abstract: This study examines how interrelated CEO and TMT changes affect an organization’s ability to simultaneously explore and exploit. Drawing upon the upper echelons perspective, we argue for a curvilinear CEO tenure-ambidexterity relationship. We then propose that the timing of TMT change critically affects this relationship. While TMT change negatively impacts ambidexterity in the early stages of CEO tenure, it has a positive relationship to ambidexterity in the later stages of CEO tenure. We test our arguments based on a longitudinal sample of 91 European finance companies between 2000 and 2010. Our main contribution to the ambidexterity literature is the development of a dynamical model revealing the interrelated effects on CEO and TMT changes on ambidexterity.

Title: Strategic Coherence: The Impact of CEO Succession and Personality

Authors

  • Xena Welch Guerra, University of St. Gallen
  • Rebekka Skubinn, Leibniz University of Hannover

Abstract: Strategic coherence positively impacts firm performance. However, we still lack an understanding of its antecedents. In this paper, we introduce a comprehensive model combining CEO succession events and predecessor retention as well as CEO personality and managerial discretion as determinants of firm strategic coherence. Succession events negatively impact strategic coherence, while this relationship is negatively moderated by predecessor retention. Once appointed, a CEO’s personality impacts the level of a firms’ strategic coherence. More specifically, CEO narcissism decreases and core self evaluation increases strategic coherence. The degree to which these aspects of CEO personality manifest in strategic coherence is positively moderated by CEO discretion. Finally, we suggest a panel regression to test the hypothesized relationships in a sample of the top 31 Swiss acquirers.

All Sessions in Track O...

Sun: 08:00 – 09:15
Session 119: Strategic Leadership
Sun: 09:30 – 10:45
Session 120: Corporate Governance
Sun: 11:15 – 12:30
Session 122: Strategic Leadership and Corporate Governance Complementarities: Why we Are an IG
Sun: 15:15 – 16:30
Session 107: The Benefits of Experience: Vicarious and Otherwise
Mon: 08:00 – 09:15
Session 106: Why do Firms do Bad Things and What Do We Know about It?
Mon: 09:30 – 10:45
Session 103: Reputation: Organizational and Individual Dimensions
Mon: 13:30 – 14:45
Session 112: CEO and TMT Turnover: Firm Implications
Session 214: CEOs and Leadership
Mon: 16:30 – 17:45
Session 113: Large Shareholders are Doing it for Themselves
Tue: 08:00 – 09:15
Session 115: Board Member Characteristics and Board Diversity
Session 137: CEO Human Capital: Take a Little off the Top
Session 254: Capital Markets and Efficiency
Tue: 11:00 – 12:15
Session 111: Why Boards Look the Way They Do: Director Selection
Session 117: Heterogeneous Owner Types and their Influence
Tue: 14:15 – 15:30
Session 108: CEOs Matter, Don\'t They?
Session 116: Discretion and Compensation
Tue: 15:45 – 17:00
Session 114: Adoption of a Practice and its Implications
Tue: 17:30 – 18:45
Session 118: The TMT as a Unit
Session 215: CEO Personality and Characteristics Influencing Decision Making

All Sessions in Track L...

Sun: 08:00 – 09:15
Session 133: Transitioning from Faculty to Administrator: Building Strategic Human Capital
Sun: 09:30 – 10:45
Session 134: Management Practices across Firms and Countries
Sun: 11:15 – 12:30
Session 135: Linked Employer-Employee Data and Strategic Human Capital Research
Mon: 08:00 – 09:15
Session 144: Stars and Human Capital Flows
Mon: 09:30 – 10:45
Session 140: Knowledge Management & Knowledge Structures: Who knows?
Mon: 13:30 – 14:45
Session 112: CEO and TMT Turnover: Firm Implications
Session 138: Value Creation & Appropriation: Take the money and run
Mon: 16:30 – 17:45
Session 139: Impact of Human Capital Loss: Going Mobile
Tue: 08:00 – 09:15
Session 137: CEO Human Capital: Take a Little off the Top
Tue: 11:00 – 12:15
Session 143: The Strategic Human Capital Process: A look inside the sausage factory
Tue: 14:15 – 15:30
Session 141: Impact of the Acquisition & Loss of Human Capital: Putting a new spin on things
Tue: 15:45 – 17:00
Session 145: Individual Differences & Human Capital-based Advantage: Vive la différence
Tue: 17:30 – 18:45
Session 142: Social Networks & Human Capital: Tying things together
Session 215: CEO Personality and Characteristics Influencing Decision Making


Strategic Management Society

Prague