How Does CEO Tenure Matter? The Mediating Role of Firm-Employee and Firm-Customer Relationships

Strategic Management Journal, 2013

42 Pages Posted: 3 May 2013

See all articles by Xueming Luo

Xueming Luo

Temple University

Vamsi Krishna Kanuri

University of Miami

Michelle Andrews

Emory University

Date Written: April 30, 2013

Abstract

While the direct influence of CEO tenure on firm performance has been examined in the strategy literature, the underlying channels of influence have remained largely unexplored. This paper draws upon the career seasons paradigm, learning perspectives, and marketing literature to examine whether firm-employee and firm-customer relationships are the pathways through which CEO tenure influences firm performance. Results from the analysis of a large dataset reveal that (1) CEO tenure has a positive and linear association with firm-employee relationship strength but an inverted U-shaped association with firm-customer relationship strength, (2) industry uncertainty intensifies these associations, and (3) firm-employee and firm-customer relationship strength mediate the effects of CEO tenure on firm performance. These findings have implications for a more balanced and nuanced view of CEO tenure.

Keywords: CEO tenure, employee relationships, customer relationships, firm performance, performance volatility

JEL Classification: M21, M31, G00, G12, L86, M00, M30, M14

Suggested Citation

Luo, Xueming and Kanuri, Vamsi Krishna and Andrews, Michelle, How Does CEO Tenure Matter? The Mediating Role of Firm-Employee and Firm-Customer Relationships (April 30, 2013). Strategic Management Journal, 2013, Available at SSRN: https://ssrn.com/abstract=2258617

Xueming Luo (Contact Author)

Temple University ( email )

1810 N. 13th Street
Floor 2
Philadelphia, PA 19128
United States

HOME PAGE: http://www.fox.temple.edu/mcm_people/xueming-luo/

Vamsi Krishna Kanuri

University of Miami ( email )

School of Business Administration
Coral Gables, FL Florida 33146
United States
5736736319 (Phone)

Michelle Andrews

Emory University ( email )

1300 Clifton Road
Atlanta, GA 30322-2722
United States

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