What Determines Demographic Similarity Between Incumbent CEOs and Their Successors? A CEO Informal Power Perspective

Thomas Hutzschenreuter; Ingo Kleindienst; Claas Greger

doi:10.1002/mde.2679

What Determines Demographic Similarity Between Incumbent CEOs and Their Successors? A CEO Informal Power Perspective

Thomas Hutzschenreuter, Ingo Kleindienst, Claas Greger

Research output: Contribution to journal › Article › peer-review

8 Scopus citations

Abstract

As CEOs reach the end of their tenure, they attempt to influence the decision about who will replace them in order to safeguard what they have put in place. This prompts them to favor candidates who share similar demographic profiles whom they believe will carry on where they leave off. We suggest that as CEOs are not usually given the authority to name a successor, they make use of informal power to exert their influence. We test our hypotheses on a sample of 137 CEO successions in 67 German diversified companies between 1985 and 2007 and find strong support for our theoretical reasoning that the more informal power incumbent CEOs have, the greater the demographic similarity between them and their successors.

Original language	English
Pages (from-to)	421-438
Number of pages	18
Journal	Managerial and Decision Economics
Volume	36
Issue number	7
DOIs	https://doi.org/10.1002/mde.2679
State	Published - 1 Oct 2015
Externally published	Yes

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abstract = "As CEOs reach the end of their tenure, they attempt to influence the decision about who will replace them in order to safeguard what they have put in place. This prompts them to favor candidates who share similar demographic profiles whom they believe will carry on where they leave off. We suggest that as CEOs are not usually given the authority to name a successor, they make use of informal power to exert their influence. We test our hypotheses on a sample of 137 CEO successions in 67 German diversified companies between 1985 and 2007 and find strong support for our theoretical reasoning that the more informal power incumbent CEOs have, the greater the demographic similarity between them and their successors.",

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AB - As CEOs reach the end of their tenure, they attempt to influence the decision about who will replace them in order to safeguard what they have put in place. This prompts them to favor candidates who share similar demographic profiles whom they believe will carry on where they leave off. We suggest that as CEOs are not usually given the authority to name a successor, they make use of informal power to exert their influence. We test our hypotheses on a sample of 137 CEO successions in 67 German diversified companies between 1985 and 2007 and find strong support for our theoretical reasoning that the more informal power incumbent CEOs have, the greater the demographic similarity between them and their successors.

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What Determines Demographic Similarity Between Incumbent CEOs and Their Successors? A CEO Informal Power Perspective

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