To change or not to change? Evidence on the steadiness of more hubristic CEOs


Kowalzick, Marc ; Appels, Moritz


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DOI: https://doi.org/10.1177/01492063221104398
Additional URL: https://journals.sagepub.com/doi/full/10.1177/0149...
URN: urn:nbn:de:bsz:180-madoc-623540
Document Type: Article
Year of publication Online: 2022
Date: 16 June 2022
The title of a journal, publication series: Journal of Management : JOM
Volume: tba
Issue number: tba
Page range: 1-40
Place of publication: Thousand Oaks, Calif.
Publishing house: Sage Publ.
ISSN: 0149-2063 , 1557-1211
Publication language: English
Institution: Außerfakultäre Einrichtungen > Institut für Mittelstandsforschung (ifm)
Business School > Mittelstandsforschung u. Entrepreneurship (Woywode)
Pre-existing license: Creative Commons Attribution 4.0 International (CC BY 4.0)
Subject: 330 Economics
Keywords (English): DEO hubris , upper echelons theory , strategic change , TMT membership change , steadiness
Abstract: To Change or Not to Change? Evidence on the Steadiness of More Hubristic CEOs Marc Kowalzick Moritz Appels University of Mannheim Extant research on CEO hubris has amassed substantial evidence on the positive association of this prominent managerial disposition and CEOs’ attraction to challenging and consequential strategic activities. Similarly, one may well anticipate more hubristic CEOs to strive for frequent transformations of their firms’ overarching trajectories as they overestimate their ability to reap the fruits of such challenging and highly consequential endeavors. In contrast to these arguments, however, higher levels of hubris might also lead CEOs to see little reason for scrutinizing and adapting extant paths in light of the magnificent prospects under their outstanding leadership. We explicate this theoretical obscurity surrounding the dispositional preference for change or steadiness associated with higher degrees of CEO hubris by carving out sets of competing hypotheses on the effect of CEO hubris on two key domains of change within the immediate purview of a CEO: strategic change and top management team (TMT) membership change. Empirically, we examine these arguments using a panel data set comprising 1,197 S&P 1500 CEOs and find strong support for a negative effect of CEO hubris on a set of indicators of strategic change as well as on TMT membership change. Our results indicate that, beyond their attraction to manifold and challenging strategic activities, more hubristic CEOs exhibit a preference for steadiness that may prevail in the overall effect of hubris on certain organizational outcomes.
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