NETWORKS AS PIPES AND PRISMS OF THE CEO: EFFECTS OF INDIVIDUAL NETWORKS OF NEWLY APPOINTED CEOs ON FIRM PERFORMANCE
Journal Title: European Journal of Business and Social Sciences - Year 2015, Vol 4, Issue 5
Abstract
While much of the academic literature expresses scepticism about managers’ direct influence on the performance of their firms, recent literature suggests that visible, celebrated and well-connected chief executive officers (CEOs) may even be stimulated to hurt their companies. To address these claims, the study examined the relationship between the individual networks of newly appointed CEOs of large corporations and the subsequent performance of these firms. Building on the conception of networks as pipes and prisms and the idea that networks of organizational members may have organizational consequences, the performance implications of two dimensions of individual networks of incoming CEOs: density of networks of ties to board members of public and private companies, and CEO prominence are addressed. The study found that network density is inconsequential for performance, while CEO prominence has negative effect on firm’s stock market performance. In addition, the findings showed that large individual networks may be a mixed blessing: they are associated with positive operating performance of firms, yet contribute to a discount of the firm’s stock price if the incoming CEO built them predominantly through memberships on corporate boards.
Authors and Affiliations
Vlatka Skokic| Faculty of Business, Economics & Law, University of Surrey, UK, Faculty of Business, Economics & Law, University of Surrey, GU2 7XH, Guildford, UK. Tel: 0044 1483 689758. eMail: v.skokic@surrey.ac.uk, Dejan Kruzic| University of Split, Faculty of Economics, Split, Croatia, Faculty of Business, Economics & Law, University of Surrey, GU2 7XH, Guildford, UK. Tel: 0044 1483 689758. eMail: v.skokic@surrey.ac.uk, Marko Coh| Maxxim Consulting, London, UK, Faculty of Business, Economics & Law, University of Surrey, GU2 7XH, Guildford, UK. Tel: 0044 1483 689758. eMail: v.skokic@surrey.ac.uk
Keywords
Related Articles
- EP ID EP10631
- DOI -
- Views 299
- Downloads 12
EFFECT OF PROJECT TEAM MANAGEMENT PRACTICES ON PERFORMANCE OF DEVELOPMENT PROJECTS IN RWANDA: A CASE OF RWANDA SOCIAL SECURITY BOARD LOW COST HOUSING PROJECT
This study sought to assess the effect of project team management practices on project performance in Rwanda by taking a case study of Rwanda Social Security Board low cost housing projects. The objectives were; to ex...
ATTAINING QUALITY IN BUSINESS PROCESSES USING NEW DERIVED APPROACH OF STACKED LEAN SIX SIGMA
No Abstract
SIKHS’ RACE RELATIONS AND THEIR IMPACT ON INTER-RACIAL MARRIAGES IN COLONIAL AND POST-COLONIAL KENYA, (1895-1990)
Sikhs are a distinct people with history. In India they have attracted various studies. The same has been done on diaspora Sikhs in Europe, America and Australia. This underscore the fact that Sikhs who left India est...
THE RELATIONSHIP BETWEEN ORGANIZATIONAL COMMUNICATION, ORGANIZATIONAL COMMITMENT AND INTENTION TO LEAVE
The purpose of this study is to determine the relationships among organizational communication, organizational commitment and intention to leave and to examine the mediating roles of sub dimensions of organizational c...
CAUSES AND IMPACT OF IMMIGRATION ON PAKISTANI YOUNG PEOPLE ON PAKISTAN AND ON HOST COUNTRY (Great Britain)
‘Push’ and ‘pull’ phenomena exist everywhere in the world. People are pushed out of their heaths and homes to other countries in search of better living. Unemployment and poor life force them to leave their ho...