Management tenure and explanations for success and failure

C Schwenk

Omega, 1993, vol. 21, issue 4, 449-456

Abstract: Several researchers have argued that executives with longer tenure in their companies may become psychologically committed to the status quo and that this commitment may reduce the quality of decision making and company performance. The study described in this paper extends prior research on Chief Executive Officer (CEO) and top management team (TMT) tenure and on attributions of responsibility for past performance by assessing the relationship between tenure, company experience and attribution patterns. The results show that CEO and TMT tenure and company experience are positively associated with self-serving attributions (taking credit for positive outcomes and laying blame on the environment for negative outcomes), which are, in turn, associated with lower subsequent financial performance. However, tenure and company experience are not directly associated with poor performance to a significant degree. These results suggest that executives with more extensive experience in a company tend to identify more strongly with the company and with current strategy and therefore attribute negative outcomes to external causes. This biased attribution pattern in turn may reduce the effectiveness of decision making, leading to poorer future performance.

Keywords: tenure; top; management; teams; cognitive; processes (search for similar items in EconPapers)
Date: 1993
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Citations: View citations in EconPapers (13)

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