The use of variance decomposition in the investigation of CEO effects: How large must the CEO effect be to rule out chance?

Variance decomposition analysis is often used to examine the degree to which CEOs influence their companies' performance (the so‐called CEO effect). Such studies play an important role in a body of literature that investigates the effect of leadership on organizations. In this paper, I argue that these previous studies have an important underlying flaw. Empirically, these studies wrongly attribute the performance effect of randomness—of chance—to the CEO. I demonstrate how randomness can affect the measured effects in a variance decomposition analysis, and I show that this is especially problematic for the measurement of CEO effects. I demonstrate how this results in a greatly inflated CEO effect and develop an approach to correct for it. Copyright © 2013 John Wiley & Sons, Ltd.     

Chief executive officers' dispositional optimism,host country's rule of law,and foreign market equity mode choice of Ghanaian small and medium‐sized enterprises

Despite a growing interest in the influence of managerial characteristics on firms' strategic decision‐making process, scholarly knowledge is limited with regard to how and when psychological attributes of executives affect firms' foreign entry mode decision. Building on behavioral decision‐making theory, we address this gap by investigating the effect of chief executive officers' (CEOs') optimism on firms' foreign market equity mode choice. In addition, we examine the moderating influence of the host country's rule of law on this relationship. Using primary data from 227 small and medium‐sized enterprises (SMEs) in Ghana, we found that increases in the levels of CEOs' optimism are related to the increases in preference for equity entry mode. This relationship is amplified when CEOs perceive the host country to have stronger rule of law. The findings have theoretical, managerial, and policy implications for SMEs' foreign market entry mode strategy.     

家长式领导风格与高管团队行为整合的关系

家长式领导是一种具有较强的纪律性和权威性,并伴有慈父般的仁爱以及崇高的道德品行的领导方式,它包含权威、仁慈、德行三个维度,且各个维度对高层管理团队行为整合的效用有所不同.权威领导强调的是严厉的控制和教诲,仁慈领导强调的是对员工工作和生活需要的关注,德行领导强调的是领导者个人的品行和美德.首席执行官权威领导风格对企业高层管理团队行为整合具有显著的负向影响,仁慈领导风格和德行领导风格则具有显著的正向影响.     

Co-opted directors and powerful CEOs: evidence from the CEO pay slice (CPS)

We explore the effect of co-opted directors on chief executive officer (CEO) power. Co-opted directors are those appointed after the incumbent CEO assumes office and are found by prior research to represent a weakened governance mechanism. Our evidence reveals that co-opted directors lead to less powerful CEOs, consistent with the substitution effect. Because co-opted directors impose less stringent oversight, the CEO is able to exercise a great deal of latitude in running the firm. Therefore, it is less necessary for the CEO to command so much power where more directors are co-opted, hence leading to less powerful CEOs. In other words, co-opted directors substitute for strong CEO power. Crucially, we find that board co-option exhibits much more explanatory power than does board independence, which has been the primary measure of board effectiveness in the literature.     

核心高管特征与公司成长性关系研究——基于中国沪深两市上市公司数据的经验研究

本文以我国沪深两市2004—2006年的上市公司为样本,从核心高级管理人员的人力资本特征视角,对高管特征与上市公司成长性的关系进行了经验检验。本文发现,在其他条件不变的情况下,上市公司成长性与核心高管的平均年龄、平均任职时间显著相关,而与核心高管平均学历的相关性不显著。进一步的研究还表明,在国有控股公司和非国有控股公司中,核心高管特征与公司成长性的关系具有显著差异。本文的研究有助于深化认知人力资本特征在公司发展过程中的重要地位,对强化核心高管遴选、完善人力资源管理具有积极的借鉴意义。     

Toward more accurate contextualization of the CEO effect on firm performance

We introduce multiple refinements to the standard method for assessing CEO effects on performance, variance partitioning methodology, more accurately contextualizing CEOs' contributions. Based on a large 20‐year sample, our new ‘CEO in Context’ technique points to a much larger aggregate CEO effect than is obtained from typical approaches. As a validation test, we show that our technique yields estimates of CEO effects more in line with what would be expected from accepted theory about CEO influence on performance. We do this by examining the CEO effects in subsamples of low‐, medium‐, and high‐discretion industries. Finally, we show that our technique generates substantially different—and we argue more logical—estimates of the effects of many individual CEOs than are obtained through customary analyses. Copyright © 2013 John Wiley & Sons, Ltd.     

Pilot CEOs and corporate innovation

We find evidence that chief executive officers’ (CEOs’) hobby of flying airplanes is associated with significantly better innovation outcomes, measured by patents and citations, greater innovation effectiveness, and more diverse and original patents. We rule out alternative explanations, leading us to conclude that CEO pilot credentials capture the personality trait of sensation seeking. Sensation seeking combines risk taking with a desire to pursue novel experiences and has been associated with creativity. Our evidence highlights sensation seeking as a valuable personality trait that can be used to identify CEOs who are likely to drive innovation success.     

Earthquake or glacier? How CEO charisma manifests in firm strategy over time

Numerous studies have focused on CEO charisma as an antecedent to firm performance, but this literature has largely overlooked the possibility that charisma manifests in more proximal strategic initiatives that (unlike performance) are largely under the CEO's control. In this study, we integrate perspectives from the upper echelons and charismatic leadership literatures to argue that CEO charisma influences year‐over‐year strategic change, the degree to which strategies deviate from industry central tendencies, and the degree of emphasis on corporate social responsibility. We also theorize that, depending on the outcome in question, the effects of charisma can become both amplified and diminished as CEO tenure advances. Employing a novel data collection approach for a sample of 113 S&P 500 CEOs, we find broad support for our theory. Copyright © 2014 John Wiley & Sons, Ltd.     

Factors influencing the choice between founder versus non-founder CEOs for IPO firms

Despite the innate advantage founder CEOs have by virtue of their founding vision, organizational influence, positive image, and ownership stakes to lead their firms at their initial public offering (IPO), extant empirical evidence indicates that between a third to half of IPO firms go public with non-founder CEOs at the helm. Relatively little however, is known regarding factors that influence the choice of founder versus non-founder CEO for firms issuing IPOs. This study examines the impact of factors such as founder characteristics, size of founding team, governance structure, ownership structure, top management team independence, venture capitalist influence, and the demand for equity financing on the probability of founder CEO at IPO.