Abstract
Why are some newly appointed CEOs dismissed from their positions while others are not? Is it hard
for newly appointed CEOs to survive in highly diversified firms? Drawing upon the concepts of
executive job demands and information-processing theory, we argue that newly appointed CEOs face
entirely different degrees of complexity and challenges in their role, and that firms’ product diversification and international diversification predict dismissals of newly appointed CEOs after
controlling for other possible explanatory variables. Additionally, we propose that appointment of a
new outsider CEO makes newly appointed CEOs more vulnerable to dismissal and consequently
strengthens the predicted relationships. The empirical results support our arguments. These results
suggest that the demands faced by a high degree of (product or international) diversification are likely
to present challenges that increase the likelihood of corporate disruption through the departures of
newly appointed CEOs. Contributions to the CEO dismissal and succession literature are discussed.
| Original language | English |
|---|---|
| Journal | Journal of Management & Organization |
| State | Published - Mar 3 2015 |