When the former CEO remains board chair: Effects on discretion, organizational change, & performance

Timothy J. Quigley, Donald C. Hambrick

Research output: Contribution to conferencePaperpeer-review

1 Scopus citations

Abstract

Past research has shown mixed results regarding the impact of CEO succession on strategic change, organizational change, and performance. This may be the result of past studies overlooking the reality that succession often results in the predecessor CEO remaining on the scene as chair of the board. Using the concept of managerial discretion, we propose that retention of the predecessor diminishes the impact of succession as an inertia breaking event and reduces the latitude of action available to the successor, leading to reduced strategic and organizational change and reduced performance extremeness. To test these hypotheses we analyzed 139 CEO successions across several high-tech industries between 1994 and 2002. Results provide strong evidence for the discretion reducing impact of predecessor CEO retention as board chair. More specifically, we find that retention of the predecessor as board chair results in reduced organizational and strategic change as well as a reduction in the extremeness of performance outcomes. Further, upon departure of the predecessor as board chair, there is an immediate increase in both change and performance extremeness.

Original languageEnglish (US)
DOIs
StatePublished - 2009
Event69th Annual Meeting of the Academy of Management, AOM 2009 - Chicago, IL, United States
Duration: Aug 7 2009Aug 11 2009

Other

Other69th Annual Meeting of the Academy of Management, AOM 2009
CountryUnited States
CityChicago, IL
Period8/7/098/11/09

All Science Journal Classification (ASJC) codes

  • Management Information Systems
  • Management of Technology and Innovation
  • Industrial relations

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