The effects of management succession in retail service banking

It is a fundamental tenet of modern management theory and practice that managers matter, and that a management change involving a transfer of authority will improve performance. In fact, there are two other possibilities, the management change may have no or even a negative effect. The purpose of this study is to examine the effects of a management change (succession) in the retail service branch banking context. The study is based on historical operational data and is longitudinal in nature. Specifically, the inter-relationships between pre-succession performance, predecessor tenure, reason for succession, origin of successor and organisational change were evaluated in 38 branches of a bank during a two-year period. The results indicated a strong association between pre- and post-succession performance, and that pre-succession performance is a predictor of successor origin, as is predecessor tenure which in turn influence post-succession performance.