CEO Selection and CEO-firm Fit

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dc.contributor Aalto-yliopisto fi
dc.contributor Aalto University en Maheshwaree, Pardeep 2020-06-10T09:00:05Z 2020-06-10T09:00:05Z 2020
dc.identifier.isbn 978-952-60-3936-7 (electronic)
dc.identifier.isbn 978-952-60-3935-0 (printed)
dc.identifier.issn 1799-4942 (electronic)
dc.identifier.issn 1799-4934 (printed)
dc.identifier.issn 1799-4934 (ISSN-L)
dc.description.abstract The upper-echelon framework posits that a match between CEO characteristics and firm's leadership requirements (CEO-firm fit) is beneficial for firm performance. However, we have limited understanding on three key issues related to CEO-firm fit. First, how does the CEO-firm fit come about? That is, how do boards establish leadership needs of the firm in foreseeable future (CEO search criteria). Second, how boards ascertain whether the potential CEO candidates' skills match the search criteria. Third, how does the CEO-firm fit evolve over time. Specifically, what are the CEO characteristics which differentiate CEOs in their ability to adapt over time. Broadly, the dissertation focuses on how boards through their CEO selection decision achieve, and CEOs, mainly though their skills maintain, CEO-firm fit over time.In the first essay, I draw upon the dynamic managerial capabilities framework which suggests that CEOs differ in their ability to deal with a changing environmental context. In a sample of 3,482 CEOs, I find evidence that CEOs differ in their capacity to respond to changing environment and this adaptive capacity is rooted in their prior experience. Specifically, greater the breadth of CEO's prior work experience higher the CEO's adaptive capacity. It contributes to dynamic managerial capabilities literature by empirically validating its presence at the CEO level. Second essay focuses on how boards ascertain whether the potential CEO candidate(s) match the CEO selection criteria. Specifically, I theorize that boards use their professional networks to obtain information about external CEO candidates to ensure that CEO profile matches the selection criteria. In a sample of 410 external CEO appointments I find that likelihood of selecting candidate with whom board has a connection is very large. It contributes to CEO succession literature by showing that directors can use professional network as a mechanism to address the information asymmetry problem encountered during CEO selection. Third essay argues that the degree of uncertainty about the strategic direction of a company is associated with observable CEO selection choices. When a company faces considerable uncertainty at the time of CEO selection, boards are likely to be ambivalent about which CEO characteristics to look for in a new CEO. Consequently, boards' CEO selection decisions are likely to be driven by the criteria of flexibility, ability to monitor CEO and ease of reversibility. These reflect in selection choices of interim CEO and CEO non-duality and result in shorter CEO tenure. Empirically, I find evidence of increased likelihood of selecting an interim CEO and shorter CEO tenure when selected at the time of higher strategic uncertainty. It contributes to CEO succession literature by highlighting the information availability constraints boards may face while selecting a new CEO which can make the possibility of achieving CEO-firm match during succession difficult. en
dc.format.extent 41 + app. 91
dc.format.mimetype application/pdf en
dc.language.iso en en
dc.publisher Aalto University en
dc.publisher Aalto-yliopisto fi
dc.relation.ispartofseries Aalto University publication series DOCTORAL DISSERTATIONS en
dc.relation.ispartofseries 97/2020
dc.relation.haspart [Publication 2]: Maheshwaree, Pardeep; Schmidt, Jens. 2020. CEO adaptive capacity and performance over time. 33 pages. Working paper
dc.relation.haspart [Publication 3]: Maheshwaree, Pardeep; Schmidt, Jens. 2020. Better the devil you know than the devil you don't: The role of board ties in outsider CEO selection. 28 pages. Working paper
dc.relation.haspart [Publication 4]: Maheshwaree, Pardeep; Schmidt, Jens. 2020. Uncertainty About the Strate- gic Direction of the Company and Boards’ CEO Selection Decisions. 27 pages. Working paper
dc.subject.other Industrial engineering en
dc.title CEO Selection and CEO-firm Fit en
dc.type G5 Artikkeliväitöskirja fi Perustieteiden korkeakoulu fi School of Science en
dc.contributor.department Tuotantotalouden laitos fi
dc.contributor.department Department of Industrial Engineering and Management en
dc.subject.keyword CEO selection en
dc.subject.keyword CEO-firm fit en
dc.subject.keyword CEO succession en
dc.identifier.urn URN:ISBN:978-952-60-3936-7
dc.type.dcmitype text en
dc.type.ontasot Doctoral dissertation (article-based) en
dc.type.ontasot Väitöskirja (artikkeli) fi
dc.contributor.supervisor Schmidt, Jens, Prof., Aalto University, Department of Industrial Engineering and Management, Finland
dc.opn Chen, Guoli, Prof., INSEAD, Singapore
dc.rev Krause, Ryan, Prof., Texas Christian University, USA
dc.rev Quigley, Timothy, Prof., University of Georgia, USA 2020-06-24
local.aalto.formfolder 2020_06_10_klo_09_59
local.aalto.archive yes

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