CEO influences on firms' strategic actions: A comparison of CEO-, firm-, and industry-level effects

Nicolas A. Zacharias, Bjoern Six, Dirk Schiereck and Ruth Maria Stock

Journal of Business Research, 2015, vol. 68, issue 11, 2338-2346

Abstract: This study investigates the importance of CEO-level effects for firms' strategic actions, compared with the impact of firm- and industry-level effects. Strategic actions reflect the firm's competitive initiatives and choices regarding financial issues and resource allocation. Drawing on strategic leadership theories, the resource-based view, industrial organization economics, and the reconciling approach of managerial discretion, this study proposes that the CEO's influence varies across different categories of strategic actions. By applying a variance decomposition approach to a 20-year sample of 110 firms in 10 industries, the authors reveal that for competitive initiatives, CEO-level effects are associated with the largest amount of variance, together with firm-level effects. Contrary to expectations, firm-level effects are most relevant for financial choices, followed by CEO effects. Resource allocation depends mainly on firm-level effects, rather than on CEO- or industry-level effects.

Keywords: CEO influences; Strategic actions; Variance decomposition; Strategic leadership theory; Resource-based view; Industrial organization economics (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbrese:v:68:y:2015:i:11:p:2338-2346

DOI: 10.1016/j.jbusres.2015.03.045

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