Session 435

What Happens After the CEO Has (Been) Gone?

Track O

Date: Sunday, September 21, 2014

 

Time: 15:45 – 17:00

Paper

Room: Monaco


Session Chair:

  • Craig Crossland, University of Notre Dame

Title: Analyst Pressure, CEO Informal Hierarchy, and CEO Dismissal – A Contingency Model of Country-level CEO Distance

Authors

  • Jean McGuire, Louisiana State University
  • Jana Oehmichen, University of Goettingen
  • Michael Wolff, University of Goettingen

Abstract: We examine the role of external and internal pressure on the board regarding CEO dismissal decisions as well as the moderating role of country-level CEO distance. Coverage and quality of recommendations of investment analysts exert external pressure on boards of directors to dismiss the CEO whereas the informal hierarchy of the CEO insulates the CEO and thus help to prevent her dismissal. Our results suggest that institutional patterns that shape the distance of the CEO to the organization such as national level power distance positively moderate these relationships. This indicates that countries’ CEO distance reinforces the attribution of weak external evaluations of the firm to the CEO, but also strengthens power effects of informal hierarchy structures.

Title: Riding Off into the Sunset: Shareholder Reactions to CEO Retirements

Authors

  • Hansin Bilgili, University of Arkansas
  • Joanna Tochman Campbell, University of Cincinnati
  • Alan Ellstrand, University of Arkansas
  • Jonathan Johnson, University of Arkansas

Abstract: In this CEO succession event study, we empirically analyze the relationship between CEO retirement and shareholder reactions using a comprehensive dataset that compiles CEO retirement events that occurred in S&P 1500 firms during the 2002–2012 period. Our theory and accompanying empirical analysis challenge the assumption that CEO retirements have negligible effects on organizational viability, as measured by investor reactions to these events. Relying on signaling theory and structural inertia theory, we identify the factors that influence the direction and magnitude of shareholder reactions to retirement announcements. Our study highlights CEO retirement as an important form of CEO turnover, and provides novel insights to strategic management theory and practice.

Title: Status Incongruence and CEO Dismissal: The Role of Past Firm Performance and Power Distance

Authors

  • Weiwen Li, Sun Yat-sen University

Abstract: Status incongruence exists in a top management group when there is an inconsistency of social status (relative respected social standing with reference to a particular social grouping or hierarchy) and hierarchical status (internal formal organizational status conferred by organizational hierarchical arrangements) among group members. We propose that status incongruence will affect the relationship dynamics among the top management team, which in turn will have an impact on CEO dismissal. More importantly, the relationship between status incongruence and CEO dismissal will be contingent on contextual factors, including past firm performance and national power distance.

Title: That Could Have Been Me: The Impact of CEO Peer Deaths on Firm-Level Innovative Output

Authors

  • Guoli Chen, INSEAD
  • Craig Crossland, University of Notre Dame
  • Sterling Huang, INSEAD

Abstract: Individuals often respond to the death of a peer by re-evaluating their approach to, and priorities in, their life and their career. In this study, we examine the implications of this general tendency within the context of senior executives. We argue that CEOs who experience the death of a director at the same firm will be subsequently more likely to pursue a “quiet life.” Because innovation requires significant efforts and keen attention, we hypothesize that firms led by these CEOs will subsequently produce significantly less innovative outputs. We examine several boundary conditions, including director characteristics and the suddenness of the death. To test our hypotheses, we use a sample of director deaths in U.S. public firms between 1990 and 2005, and a difference-in-difference econometric analysis.

All Sessions in Track O...

Sun: 08:00 – 09:15
Session 311: The Power of Power: The Role of Power and Politics in Strategy Processes
Session 386: Entrepreneurial Corporate Governance
Sun: 11:15 – 12:30
Session 476: The Dark Side of Strategic Leadership and Governance
Sun: 15:45 – 17:00
Session 435: What Happens After the CEO Has (Been) Gone?
Sun: 17:15 – 18:30
Session 611: Strategic Leadership and Governance IG Business Meeting
Mon: 08:00 – 09:15
Session 335: Internationalization and Strategic Decisions
Session 458: Those at the Top Matter!
Mon: 11:00 – 12:15
Session 336: CEO Roles, Frames, and Traits
Mon: 14:45 – 16:00
Session 331: CEO Compensation: What we Know, What we Need to Study
Mon: 16:30 – 17:45
Session 337: Power at the Top - The Influence of Directors
Session 411: Ownership and Governance
Tue: 08:00 – 09:15
Session 428: Managing External Dependencies
Session 467: Putting Pressure on the CEO
Tue: 11:00 – 12:15
Session 465: The Importance of Corporate Governance
Tue: 15:30 – 16:45
Session 429: Director Selection and Influence
Tue: 17:15 – 18:30
Session 431: Agents, Principals, and Owners
Session 432: Upper Echelons Revisited


Strategic Management Society

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