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The differing effects of agent and founder CEOs on the firm's market expansion

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  • David Souder
  • Zeki Simsek
  • Scott G. Johnson

Abstract

This paper builds and tests the thesis that CEO influence evolves differently for founders and agents. We theorize that at the beginning of their tenures, founder CEOs can pursue market expansion more aggressively than agent CEOs, because they take office with the combination of motivation, power, and requisite knowledge that agent CEOs build over time. Subsequently, however, founder CEOs have less access to the administrative infrastructure necessary to sustain a growing firm, making them less able than agent CEOs to continue market expansion mid‐tenure and more severely constrained by market complexity. A longitudinal study of cable television operators confirms that the firm's market expansion follows an inverted U‐shape for agents and a downward slope for founders, while market complexity reduces market expansion, especially for founders. Copyright © 2011 John Wiley & Sons, Ltd.

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  • David Souder & Zeki Simsek & Scott G. Johnson, 2012. "The differing effects of agent and founder CEOs on the firm's market expansion," Strategic Management Journal, Wiley Blackwell, vol. 33(1), pages 23-41, January.
    • Handle: RePEc:bla:stratm:v:33:y:2012:i:1:p:23-41
    DOI: 10.1002/smj.944
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    Cited by:

    1. Charlotte L. Schuster & Alexander T. Nicolai & Jeffrey G. Covin, 2020. "Are Founder-Led Firms Less Susceptible to Managerial Myopia?," Entrepreneurship Theory and Practice, , vol. 44(3), pages 391-421, May.
    2. Edward I. Altman & Marco Balzano & Alessandro Giannozzi & Stjepan Srhoj, 2023. "Revisiting SME default predictors: The Omega Score," Journal of Small Business Management, Taylor & Francis Journals, vol. 61(6), pages 2383-2417, November.
    3. Nebert Mandala & E. Kaijage & J. Aduda & C. Iraya, 2018. "The Effect of Board Structure and CEO Tenure on Performance of Financial Institutions in Kenya," Journal of Finance and Investment Analysis, SCIENPRESS Ltd, vol. 7(1), pages 1-4.
    4. Yongwook Paik & Heejin Woo, 2017. "The Effects of Corporate Venture Capital, Founder Incumbency, and Their Interaction on Entrepreneurial Firms’ R&D Investment Strategies," Organization Science, INFORMS, vol. 28(4), pages 670-689, August.
    5. Michael A. Abebe & Pingshu Li & Keshab Acharya & Joshua J. Daspit, 2020. "The founder chief executive officer: A review of current insights and directions for future research," Corporate Governance: An International Review, Wiley Blackwell, vol. 28(6), pages 406-436, November.
    6. Fu, Chenyi & Ma, Shoufeng & Zhu, Ning & He, Qiao-Chu & Yang, Hai, 2022. "Bike-sharing inventory management for market expansion," Transportation Research Part B: Methodological, Elsevier, vol. 162(C), pages 28-54.
    7. Caloghirou, Yannis & Giotopoulos, Ioannis & Kontolaimou, Alexandra & Korra, Efthymia & Tsakanikas, Aggelos, 2021. "Industry-university knowledge flows and product innovation: How do knowledge stocks and crisis matter?," Research Policy, Elsevier, vol. 50(3).
    8. Nebert Mandala & E. Kaijage & J. Aduda & C. Iraya, 2018. "An Empirical Investigation of the Relationship between Board Structure and Performance of Financial Institutions in Kenya," Journal of Finance and Investment Analysis, SCIENPRESS Ltd, vol. 7(1), pages 1-3.
    9. Franczak, Jennifer & Gyensare, Michael A. & Lanivich, Stephen E. & Adomako, Samuel & Chu, Irene, 2024. "How and when does founder polychronicity affect new venture performance? The roles of entrepreneurial orientation and firm age," Journal of Business Research, Elsevier, vol. 172(C).
    10. Breuer, Wolfgang & Knetsch, Andreas, 2022. "Informal authority and economic outcomes of family firms: An issue of national power distance," International Review of Financial Analysis, Elsevier, vol. 81(C).
    11. Aviral Kumar Tiwari & Naseem Ahamed, 2018. "Executive Tenure And Firm Performance: An Empirical Examination Of The Indian Corporate Landscape," Advances in Decision Sciences, Asia University, Taiwan, vol. 22(1), pages 321-350, December.
    12. Qiuqin He & Agustín Carrilero-Castillo & Joaquin Gonzalez-Garcia, 2022. "Do CEO characteristics influence a firm’s investment in brand equity? Evidence from Chinese listed firms," International Entrepreneurship and Management Journal, Springer, vol. 18(1), pages 73-87, March.
    13. Michael A. Abebe & Keshab Acharya, 2022. "Founder CEOs and corporate environmental violations: Evidence from S&P 1500 firms," Business Strategy and the Environment, Wiley Blackwell, vol. 31(3), pages 1204-1219, March.
    14. Jeong, Nara & Kim, Nari & Arthurs, Jonathan D., 2021. "The CEO’s tenure life cycle, corporate social responsibility and the moderating role of the CEO’s political orientation," Journal of Business Research, Elsevier, vol. 137(C), pages 464-474.
    15. Meier, Olivier & Schier, Guillaume, 2022. "Lone founders, family founders, and corporate social responsibility," Journal of Business Research, Elsevier, vol. 148(C), pages 149-160.
    16. Alessandro Cirillo & Luca Pennacchio & Maria Rosaria Carillo & Mauro Romano, 2021. "The antecedents of entrepreneurial risk-taking in private family firms: CEO seasons and contingency factors," Small Business Economics, Springer, vol. 56(4), pages 1571-1590, April.

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