CEO Succession Mechanisms, Organizational Context, and Performance: A Socio‐Emotional Wealth Perspective on Family‐Controlled Firms

27 Pages Posted: 24 Oct 2014

See all articles by Alessandro Minichilli

Alessandro Minichilli

Bocconi University - Department of Management and Technology

Mattias Nordqvist

Jonkoping University - Jonkoping International Business School (JIBS); Babson College - Arthur M. Blank Center for Entrepreneurship

Guido Corbetta

Bocconi University - Department of Management and Technology

Mario Daniele Amore

Bocconi University - Department of Management and Technology

Date Written: November 2014

Abstract

This article extends the literature on CEO succession and financial performance by addressing corporate owners' mixed motives and desires to protect their interest in being in business. We draw on a Socio‐Emotional Wealth (SEW) perspective to investigate how the choice of one of three succession mechanisms – relay succession, ‘horse races’ among internal CEO candidates, and hiring from outside – may effectively balance trade‐offs between corporate owners' non‐financial SEW motives and the firm's financial performance. We find that implementing one of these succession mechanisms reduces the negative impact that typically characterizes CEO transitions in family firms. We also show that family presence on the board of directors offsets the benefits of having selected these balancing succession mechanisms, in either placing too much emphasis on SEW, or creating negative dynamics that make the chosen succession mechanisms less effective.

Keywords: CEO succession mechanisms, family firms, organizational context, performance, socio‐emotional wealth

Suggested Citation

Minichilli, Alessandro and Nordqvist, Mattias and Corbetta, Guido and Amore, Mario Daniele, CEO Succession Mechanisms, Organizational Context, and Performance: A Socio‐Emotional Wealth Perspective on Family‐Controlled Firms (November 2014). Journal of Management Studies, Vol. 51, Issue 7, pp. 1153-1179, 2014, Available at SSRN: https://ssrn.com/abstract=2514084 or http://dx.doi.org/10.1111/joms.12095

Alessandro Minichilli (Contact Author)

Bocconi University - Department of Management and Technology ( email )

Via Roentgen 1
Milan, MI 20136
Italy

Mattias Nordqvist

Jonkoping University - Jonkoping International Business School (JIBS) ( email )

Jönköping, 55111
Sweden

Babson College - Arthur M. Blank Center for Entrepreneurship

231 Forest Street
Babson Park, MA 02457-0310
United States

Guido Corbetta

Bocconi University - Department of Management and Technology ( email )

Via Roentgen 1
Milan, MI 20136
Italy

Mario Daniele Amore

Bocconi University - Department of Management and Technology ( email )

Via Roentgen 1
Milan, MI 20136
Italy

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