Managerial Turnover and Strategic Change

Dirk Sliwka

Management Science, 2007, vol. 53, issue 11, 1675-1687

Abstract: The connection between strategic change and managerial turnover is studied within a model where managers decide on a firm's strategy. Managers as well as firm owners care for the long-term success of a company, but managers are also interested in their own reputation. Due to reputational concerns, managers are reluctant to alter strategic decisions they themselves made in the past even when internal accounting information indicates that they should do so. It is shown that it may well be optimal in some cases to dismiss managers of higher ability while someone less talented may be kept in office when strategic change has to be enforced.

Keywords: CEO turnover; correction; leading indicators; organizational studies; personnel accounting; reputation; strategic change (search for similar items in EconPapers)
Date: 2007
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:53:y:2007:i:11:p:1675-1687

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