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A Review of Recent Research on CEOs’ Influence on Firm Performance

Author

Listed:
  • Michael L. McDonald

    (UTSA)

  • Poonam Khanna
  • Jason Cavich

Abstract

Management scholars, as well as scholars in other disciplines, have demonstrated a longstanding interest in the influence that chief executive officers (CEOs) have on firm performance. There is now a substantial literature on this general topic. Despite the importance of the issue and the existence of a sizable body of research, there does not appear to be a recent review of studies of the CEO-firm performance relationship. This paper seeks to begin to address this gap by reviewing recent studies in this area that have appeared in high-influence management journals. To organize our review, we place these studies into five main categories: 1) studies that examine how various CEO characteristics, which have not received much prior attention, are related to firm performance; 2) studies that consider possible mediators of the performance effects of CEO attributes that have been examined in the past; 3) studies that consider how certain CEO behaviors (versus CEO characteristics) influence firm performance; 4) studies that are concerned with the so-called “CEO effect”, which is the amount of variance in firm performance that can be attributed to CEOs (versus other factors like industry or the general macro-economic environment); and 5) studies that consider factors that determine when the CEO effect is stronger or weaker. Length: 33 pages

Suggested Citation

  • 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.
    • Handle: RePEc:tsa:wpaper:0193mgt
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    References listed on IDEAS

    as
    1. Timothy J. Quigley & Donald C. Hambrick, 2015. "Has the “CEO effect” increased in recent decades? A new explanation for the great rise in America's attention to corporate leaders," Strategic Management Journal, Wiley Blackwell, vol. 36(6), pages 821-830, June.
    2. Clint Chadwick & Janice F. Super & Kiwook Kwon, 2015. "Resource orchestration in practice: CEO emphasis on SHRM, commitment-based HR systems, and firm performance," Strategic Management Journal, Wiley Blackwell, vol. 36(3), pages 360-376, March.
    3. Guoli Chen & Donald C. Hambrick, 2012. "CEO Replacement in Turnaround Situations: Executive (Mis)Fit and Its Performance Implications," Organization Science, INFORMS, vol. 23(1), pages 225-243, February.
    4. Craig Crossland & Donald C. Hambrick, 2007. "How national systems differ in their constraints on corporate executives: a study of CEO effects in three countries," Strategic Management Journal, Wiley Blackwell, vol. 28(8), pages 767-789, August.
    5. Markus A. Fitza, 2014. "The use of variance decomposition in the investigation of CEO effects: How large must the CEO effect be to rule out chance?," Strategic Management Journal, Wiley Blackwell, vol. 35(12), pages 1839-1852, December.
    6. Danny Miller & Xiaowei Xu & Vikas Mehrotra, 2015. "When is human capital a valuable resource? The performance effects of Ivy league selection among celebrated CEOs," Strategic Management Journal, Wiley Blackwell, vol. 36(6), pages 930-944, June.
    7. 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.
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    More about this item

    Keywords

    Executive leaders; firm performance;

    JEL classification:

    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L29 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Other

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