CEOs' origin has been viewed by many scholars and researchers as important succession characteristic (Shen & Cannella, 2002), yet there is limited unified research findings on the topic. This research effort resulted from the quest toward further understanding of the relationship between new CEO successor origins and subsequent organizational outcomes. Many organizational researchers in recent years have devised various paradigms to help understand the relationship between new CEO successor origins and subsequent organizational performance. However, prior studies have yielded mostly inconsistencies and confusions with limited theoretical advancement, which partly resulted from inappropriate sample sources and technological constraints in collecting the required financial data (Bommer & Ellstrand, 1996; Murphy, 1999). This study benefited from current advancements in informational technology, which has made better collection of relevant financial data across many firms possible. This study specifically focused on the implications of new CEO successors’ origins and subsequent organizational financial outcomes of Fortune 500 companies. The main population for this study comprised of U.S. firms listed in the calendar year 2003 Fortune 500 companies. The study sample consisted of Fortune 500 companies, which have experienced a CEO succession event during the period from 2003 to 2005 as evidenced by changes in the identity of CEOs listed during same period. The researcher employed current and relevant financial data reported by the Fortune 500 companies over the period from 2003 through 2007. The financial data used in the study analysis represented two relevant periods: the year prior to a CEO succession event (Yr-1) and the consecutive two-years following a CEO succession event (Yr+1 & Yr+2). The study employed Accounting-Based variables to measure post-succession organizational financial performance. Findings from this study suggest that outsider new CEO successors are as capable as insider new CEO successors in moving the organization forward with limited or no interruptions. In addition, the theory and evidence from this study suggest that new CEO successor origins do not significantly influence post-succession financial outcomes of Fortune 500 companies.
|Adviser||April Boyington Wall|
|Subjects||Management; Organization theory|
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