CEO Longevity
By Phin Upham
Factors That Influence CEO Longevity
The author identifies two central factors that
influence CEO longevity:
1. Model of ...
Ocasio’s Argument
Depends on the logics of the two models.
a) The institutionalization of power model: A
CEO has a greate...
Hidden Presuppositions
This structuralist view has hidden presuppositions.
a) These different views affect different peop...
Difference Between Two Models
Author differentiates between two models
o Institutionalization model: Tenure will decrease...
Method and Research
120 randomly sampled industrial corporations: 4.45 percent
of the population.
Company years 1960-199...
Final Results
Power logic is dominant during the first decade of tenure
 Beyond that CEO begins cements position
During...
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Ceo longevity-phin-upham

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Ceo longevity-phin-upham

  1. 1. CEO Longevity By Phin Upham
  2. 2. Factors That Influence CEO Longevity The author identifies two central factors that influence CEO longevity: 1. Model of the institutionalization of power 2. Model of the circulation of power Two competing frameworks. Each model has a different way of viewing CEO tenure. Makes competing or complementary predictions, which he then tests.
  3. 3. Ocasio’s Argument Depends on the logics of the two models. a) The institutionalization of power model: A CEO has a greater chance at remaining in power the longer he/she has been in power. b) The circulation of power view: The CEO’s tenure elapses, and the CEO’s time in office grows, coalitions are more likely to grow against the CEO and his/her views.
  4. 4. Hidden Presuppositions This structuralist view has hidden presuppositions. a) These different views affect different people in the same ways. b) CEOs left the company for the same reasons. a. Did he or she leave voluntarily? The real question: Can a CEO keep his/her job when the CEO wished to stay?
  5. 5. Difference Between Two Models Author differentiates between two models o Institutionalization model: Tenure will decrease the rate of CEO succession o Circulation of power: Tenure will decrease the rate of CEO succession Bad economic times or performance puts pressure on CEO’s Institutionalization model: accumulated power helps to buffer him/her.  Circulation of power model: exacerbates the challenges to CEO’s power o Undermines confidence in CEO. Board tenure: inversely affects the later model o conversely affects the former model
  6. 6. Method and Research 120 randomly sampled industrial corporations: 4.45 percent of the population. Company years 1960-1990 6 firms dropped resulting in n=114. Uses statistical tricks to left and right center the data o effects of beginning in 1960 and ending in 1980 Preserves as much as possible. Uses control variables for firm sixe, and basic factual characteristics of CEO. Clear logic to his data analysis and assumptions. Presents data in various formats with brief explanations of significant effects.
  7. 7. Final Results Power logic is dominant during the first decade of tenure  Beyond that CEO begins cements position During adversity, CEO’s prior board experience was a liability Nature and stability of tenure is discussed in an illuminating way  Data analysis clear and rigorous Highlights dynamics between the obsolescence of the CEO’s schemas and strategies Highlights the attempts of the CEO to cement power Mitigating effects of high board umber and internal board members

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