What Makes a Winner? Toward Resolving the Role of Luck and Skill in Sustained CEO Performance

40 Pages Posted: 23 Aug 2016 Last revised: 27 May 2021

See all articles by Seoyoung Kim

Seoyoung Kim

Santa Clara University

Robert Eberhart

UCLA

Daniel Erian Armanios

University of Oxford, Saïd Business School; University of Oxford, St Anne's College

Date Written: May 1, 2017

Abstract

This study is an empirical examination of the extent to which luck can explain sustained performance. Using a unique empirical strategy of bootstrap simulations that we compare to actual performances of public companies, we observe that over 95% of the differences in performance outcomes between “top” versus “average” performers can be attributed to luck, even if all CEOs are equally skilled. Through this novel empirical approach, we can better incorporate the role of luck into studies of sustained performance, and our findings suggest that more attention should be placed on the role of unanticipated and even uncontrollable changes on performance.

Keywords: luck, CEO evaluation, upper-echelon theory, sustained performance, performance evaluation

Suggested Citation

Kim, Seoyoung and Eberhart, Robert and Armanios, Daniel Erian, What Makes a Winner? Toward Resolving the Role of Luck and Skill in Sustained CEO Performance (May 1, 2017). Available at SSRN: https://ssrn.com/abstract=2827132 or http://dx.doi.org/10.2139/ssrn.2827132

Seoyoung Kim (Contact Author)

Santa Clara University ( email )

500 El Camino Real
Santa Clara, CA California 95053
United States

Robert Eberhart

UCLA ( email )

Los Angeles, CA
United States

Daniel Erian Armanios

University of Oxford, Saïd Business School ( email )

Park End Street
Oxford, OX1 1HP
Great Britain

University of Oxford, St Anne's College ( email )

Oxford
United Kingdom

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