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The CEO Performance Effect: Statistical Issues and a Complex Fit Perspective

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  • Daniela P. Blettner
  • Fernando R. Chaddad
  • Richard A. Bettis

Abstract

How CEOs affect strategy and performance is important to strategic management research. We show that sophisticated statistical analysis alone is problematic for establishing the magnitude and causes of CEO impact on performance. We discuss three problem areas that substantially distort the measurement and sources of a CEO performance effect: (1) the nature of performance time series, (2) confounding and (3) the discovery of many interactions associated with the CEO performance effect. We show that the aggregate of empirical research implies complex interdependency as the driver of the CEO performance effect. This suggests a ‘fit’ model requiring new research approaches. Copyright © 2011 John Wiley & Sons, Ltd.

Suggested Citation

  • Daniela P. Blettner & Fernando R. Chaddad & Richard A. Bettis, 2012. "The CEO Performance Effect: Statistical Issues and a Complex Fit Perspective," Strategic Management Journal, Wiley Blackwell, vol. 33(8), pages 986-999, August.
    • Handle: RePEc:bla:stratm:v:33:y:2012:i:8:p:986-999
    DOI: 10.1002/smj.1949
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    Cited by:

    1. Guan, Jian & Gao, Zhimin & Tan, Justin & Sun, Weizheng & Shi, Fan, 2021. "Does the mixed ownership reform work? Influence of board chair on performance of state-owned enterprises," Journal of Business Research, Elsevier, vol. 122(C), pages 51-59.
    2. Michael L. McDonald & Poonam Khanna & Jason Cavich, 2015. "A Review of Recent Research on CEOs’ Influence on Firm Performance," Working Papers 0193mgt, College of Business, University of Texas at San Antonio.
    3. Jun Xie & Wataru Nozawa & Shunsuke Managi, 2023. "The nexus of top executives’ attributes, firm strategies, and outcomes: Large firms versus SMEs," Palgrave Communications, Palgrave Macmillan, vol. 10(1), pages 1-15, December.
    4. Johannes Carow, 2024. "A critical assessment of the two-way fixed-effects model for firm-level dependent variables," Working Papers 2405, Gutenberg School of Management and Economics, Johannes Gutenberg-Universität Mainz.
    5. Fabel, Oliver & Mináriková, Dana & Hopp, Christian, 2022. "Differences and similarities in executive hiring decisions of family and non-family firms," Journal of Family Business Strategy, Elsevier, vol. 13(2).
    6. Xin Liu, 2023. "Fear to lose? An analysis of CEO successors’ decision-making regarding R&D intensity based on behavioral agency theory," Asian Business & Management, Palgrave Macmillan, vol. 22(1), pages 403-430, February.
    7. Chengedzai Mafini, 2016. "Constraints to Strategy Implementation and their Influence on Business Performance: the Case of a Waste Management Logistics Company," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 12(4), pages 51-71, August.
    8. Sheen S. Levine & Michael J. Prietula & Ann Majchrzak, 2022. "Advice in Crisis: Principles of Organizational and Entrepreneurial Resilience," Journal of Organization Design, Springer;Organizational Design Community, vol. 11(4), pages 145-168, December.
    9. Songcui Hu & Richard A. Bettis, 2018. "Multiple Organization Goals with Feedback from Shared Technological Task Environments," Organization Science, INFORMS, vol. 29(5), pages 873-889, October.
    10. Mauro Romano & Alessandro Cirillo & Donata Mussolino & Luca Pennacchio, 2019. "CEO career horizons and when to go public: the relationship between risk-taking, speed and CEO power," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 23(1), pages 139-163, March.
    11. Victor Esteban Jarosiewicz & David Gaddis Ross, 2023. "Revisiting managerial “style”: The replicability and falsifiability of manager fixed effects for firm policies," Strategic Management Journal, Wiley Blackwell, vol. 44(3), pages 858-886, March.

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