CEO succession: When does the firm’s new leader generate more strategic change?
Intrigued by solving the puzzle in which situations a CEO succession results in a higher level of strategic change. I proposed that a forced CEO turnover and the level of dissimilarity in demographic characteristics between the prior and the new CEO could potentially explain why one CEO succession results in more strategic change, while the other CEO successions do not. Based on a panel data analysis of the firms ranked on the Standard & Poor's 500 Index, this study confirms the expectation that dissimilarity in specific demographic characteristics can explain why some CEO successions result in a higher level of strategic change. However, I did not find a significant influence of a forced CEO turnover on the level of strategic change. Furthermore, a more sophisticated way to measure a CEO succession implied that prior research might have overestimated the effect of CEO succession on strategic change. I discuss the implications of my findings for research regarding the upper echelons theory, CEO succession and strategic change.
Faculteit der Managementwetenschappen