An Empirical Investigation on the Appointments of Supply Chain and Operations Management Executives

Kevin B. Hendricks (), Manpreet Hora () and Vinod R. Singhal ()
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Kevin B. Hendricks: School of Business and Economics, Wilfrid Laurier University, Waterloo, Ontario N2L 3C5, Canada
Manpreet Hora: Scheller College of Business, Georgia Institute of Technology, Atlanta, Georgia 30332
Vinod R. Singhal: Scheller College of Business, Georgia Institute of Technology, Atlanta, Georgia 30332

Management Science, 2015, vol. 61, issue 7, 1562-1583

Abstract: This paper provides empirical evidence on the performance effects and choice of appointments of supply chain and operations management executives (SCOMEs). The analysis is based on a sample of 681 SCOME appointments that were publicly announced during the 2000–2011 period. We find that the stock market reaction is positive on the day of the announcement. Categorizing the SCOME appointments as new or old and insider or outsider, we find that the market reaction for newly created SCOME positions is positive. The market also reacts more positively when a SCOME is an outsider rather than an insider. The strongest positive reaction is observed when outsiders are hired for newly created SCOME positions. We find evidence of both poor stock price performance and poor operating performance in the period preceding the appointment of new SCOMEs. New SCOME appointments are not followed by an immediate improvement in stock price and operating performance. However, there is no further decline in performance, suggesting that the decline observed in the preappointment period does not continue after the new SCOME is appointed. We also find that the likelihood of a SCOME being an outsider is greater for firms that are smaller, operate in more concentrated industries, and have experienced poor prior performance. This paper was accepted by Serguei Netessine, operations management.

Keywords: appointments of supply chain executives; stock market value; operating performance (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (19)

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