Strategy, CEO Specialization, and Succession

Abstract

The authors gratefully thank Dick Daft, former Associate Editor of Administrative Science Quarterly, and the three anonymous ASQ reviewers for their valuable comments. We would also like to thank Linda Pike for her editorial insights. The comments of Michael Crino and Ralph Jackson are also gratefully acknowledged. To investigate the relationships among CEO succession, CEO career specializations, and diversification strategy, this study examined a 25-year history of a stratified sample of 173 companies from the Fortune 1000 list in which there were 370 cases of CEO succession. Two issues were examined: (1) the relationship between the former CEO's career specialization and that of the successor and (2) the relationship between the previous strategy and the successor's career specialization. The results generally indicated that in cases of succession, the former CEO's career specialization and the previous strategy simultaneously, but independently, predict the successor's career specialization. Specifically CEOs tend to be succeeded by individuals with similar career specializations. In addition, the premise that career specializations are linked to strategies is also supported.'