Changing ideological regimes: CEO succession with a shift in political ideology and new CEO early departure

We examine the effects of CEO succession coupled with a change in political ideology – when a conservative CEO is replaced by a liberal CEO or vice versa. We argue that in such CEO transitions, the new CEOs must alter their predecessors’ ideological imprints to imbue strategic leadership with their own values, which increases their executive job demands in the critical early years of their tenure and raises the likelihood of their early departure. We also suggest that this relationship is moderated by two strategic leadership interface (SLI) factors that influence the executive job demands these new CEOs face: (a) the retention of the ideologically incongruent predecessor as board chair, and (b) the ideological fit between the new CEO and the incumbent executive team. We first test our framework using data from 2286 CEO successions in S&P 1500 firms. We then conduct an experimental study to ensure causality and confirm executive job demands as a mediating mechanism underlying the relationship. Overall, our study advances the disruption theory of succession by shedding light on the deeply held mechanisms that lead to early failure in CEO transitions

Reduction of the value of information sharing as demand becomes strongly auto-correlated

Information sharing has been identified, in the academic literature, as one of the most important levers to mitigate the bullwhip effect in supply chains. A highly-cited article on the bullwhip effect has claimed that the percentage inventory reduction resulting from information sharing in a two level supply chain, when the downstream demand is autoregressive of order one, is an increasing function of the autoregressive parameter of the demand. In this paper we show that this is true only for a certain range of the autoregressive parameter and there is a maximum value beyond which the bullwhip ratio at the upstream stage is reduced and the percentage inventory reduction resulting from information sharing decreases towards zero. We also show that this maximum value of the autoregressive parameter can be as high as 0.7 which represents a common value that may be encountered in many practical contexts. This means that large benefits of information sharing cannot be assumed for those Stock Keeping Units (SKUs) with highly positively auto-correlated demand. Instead, equally careful analysis is needed for these items as for those SKUs with less strongly auto-correlated demand