The Insider\u27s Advantage: CEO Experience and The Performance of Large Diversified Firms

Much upper echelons research focuses on the effect of CEO experience on firm performance outcomes. This paper extends this research stream using human and social capital theories as a framework to examine the effect of CEO experience on the performance of large diversified companies. Our analysis of 239 Fortune “500” companies finds that larger companies are more likely to select insiders and individuals who have more firm-specific experience to be their CEO. We also find that the selection of insiders and CEOs with more firm-specific experience is associated with significantly higher firm performance. These findings highlight the importance of the human and social capital possessed by company insiders, and shed additional light on the strategic leadership of large diversified companies and other complex organizations

Is successful diversification possible, and if so, what contributes to success?

Includes bibliographical references (p. 25-28)

Strategic Management Concise a Managerial Perspective

I-12.;xxviii.;25 c