Fight or Flight: Managing Stigma in Executive Careers

Strategic Management Journal, Vol. 29, pp. 557-567

24 Pages Posted: 29 May 2007 Last revised: 27 Nov 2008

See all articles by Matthew Semadeni

Matthew Semadeni

Arizona State University (ASU)

Albert A. Cannella

Texas A&M University

Donald R. Fraser

Texas A&M University - Department of Finance

D. Scott Lee

University of Nevada, Las Vegas - Lee Business School

Date Written: 2008

Abstract

We examine the labor market consequences borne by executives who remain at financially distressed firms relative to those who flee to another employer to avoid the stigma of failure. Our study makes two contributions. First, we document an ex ante dimension of executive labor markets unaccounted for by ex post settling up models (e.g., Fama, 1980). Specifically, we show that executives who jump ship ¿ change employers in the two years prior to the failure ¿ suffer fewer labor market consequences than their counterparts who remain with the failing firm. Second, we extend the study of bankruptcy stigma to examine how that stigma might be managed by jumping ship.

Keywords: Stigma, Managerial labor markets, Management turnover, Financial distress, Ship jumping, Executive career management, Failure

JEL Classification: J44, J63, M14, M51

Suggested Citation

Semadeni, Matthew and Cannella, Albert A. and Fraser, Donald R. and Lee, D. Scott, Fight or Flight: Managing Stigma in Executive Careers (2008). Strategic Management Journal, Vol. 29, pp. 557-567, Available at SSRN: https://ssrn.com/abstract=989107

Matthew Semadeni (Contact Author)

Arizona State University (ASU)

Farmer Building 440G PO Box 872011
Tempe, AZ 85287
United States

Albert A. Cannella

Texas A&M University ( email )

430 Wehner
College Station, TX 77843-4218
United States

Donald R. Fraser

Texas A&M University - Department of Finance ( email )

430 Wehner
College Station, TX 77843-4218
United States
979-845- 2020 (Phone)

D. Scott Lee

University of Nevada, Las Vegas - Lee Business School ( email )

4505 S. Maryland Parkway
Box 456008
Las Vegas, NV 89154-6008
United States
702-895-2526 (Phone)
702-895-4630 (Fax)

HOME PAGE: http://faculty.unlv.edu/slee

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