The influence of the CEO’s confidence on the distinctiveness of the strategy
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2022-07-04
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en
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Although many studies investigated the influence of CEO confidence on strategic decision-making, less is known about the influence of CEO confidence on strategic distinctiveness. Building upon prior literature and the upper echelons theory, this research proposes that confident CEOs are more inclined to pursue a distinctive strategy than CEOs with lower confidence. Based on a panel data sample from 2009 to 2018 with firms of all European stock indexes, this study concluded that the level of CEO confidence does not affect the strategic distinctiveness of a firm. In addition, I theorized how the positive relation between CEO confidence and strategic distinctiveness is strengthened by the CEO’s power, yet mitigated by the institutional investor dedication. This study found support for the moderation effect of CEO power, indicating that CEOs with low and high confidence with much power create more distinctive strategies, but both in a different manner. Further, no support is found for the moderation effect of institutional investor dedication, meaning that dedicated institutional investors do not intervene when confident CEOs pursue a distinctive strategy. The findings of this study contribute to the strategic leadership literature, the upper echelons theory and strategic distinctiveness.
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Faculteit der Managementwetenschappen