Donald C. Hambrick’s research while affiliated with Pennsylvania State University and other places

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Publications (185)


A Model of CEO Succession Planning as a Risky Investment: Anticipated Costs, Uncertain Results, and Contingency Conditions
  • Article

July 2024

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22 Reads

Organization Science

Donald C. Hambrick

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Eric Y. Lee

As a counterpoint to the prevailing normative view that CEO succession planning is universally wise, we develop a model of such endeavors as risky investments. Our model has three elements. First, we identify the potential costs of CEO succession planning, including opportunity costs associated with absorbing CEO and board attention, CEO-board conflict, and various forms of organizational disruption. Second, we identify and unpack the potential results of CEO succession planning, with explicit attention to the possibility that these results might be unfavorable. Specifically, expensively groomed executives may depart prior to succession; and groomed successors may perform no better, or even worse, than replacements obtained from the executive labor market, when needed. Third, we specify a slate of contingency conditions that substantially affect whether the various costs of CEO succession planning, and the likelihoods of unfavorable results, will be modest or considerable. We identify relevant contingencies at multiple levels: (a) incumbent CEO attributes, (b) firm attributes, (c) industry attributes, and (d) macro-environmental norms and institutions. No single contingency condition will necessarily make CEO succession planning an unpromising investment, but combinations might, prompting rational boards to balk at engaging in such endeavors. Our model has major implications for scholars, boards, governance watchdogs, and investors. Moreover, our analysis sheds indirect light on why many boards do not engage in CEO succession planning. It may not be due to their dereliction, as is typically asserted, but rather to their assessments that such initiatives do not make economic sense.







How Do Employees React When Their CEO Speaks Out? Intra- and Extra-Firm Implications of CEO Sociopolitical Activism

February 2022

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208 Reads

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62 Citations

Administrative Science Quarterly

Business leaders have traditionally avoided wading into society’s debates. Yet more and more CEOs are taking visible public stands on hotly contested issues, engaging in what has come to be called CEO sociopolitical activism. Despite its growing prevalence and potentially major implications, this class of executive behaviors remains largely unexplored by organizational scholars. Our study tests and elaborates on stakeholder alignment theory to investigate the influence of CEO activism on employees’ attitudes and behaviors, particularly its effects on employees’ organizational commitment and support for the ideology underpinning the CEO’s public stance. Our theoretical predictions hinge on the degree of alignment between the CEO’s stance and the prevailing ideological tilt of the employee population, as well as the degree to which employees view the CEO as a credible leader. We test our ideas in the context of a highly publicized letter signed by nearly 100 public company CEOs in opposition to North Carolina’s controversial 2016 “bathroom bill.” Relying on multiple data sources to examine differences between firms whose CEOs signed the letter and firms whose CEOs declined the invitation to sign, we find general support for our theory, indicating that CEO activism has important intra- and extra-firm implications.


Strategic Leadership

October 2021

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66 Reads

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17 Citations

Research on strategic leadership, or the study of top executives and their effects on organizational outcomes, has flourished over the past few decades. Firm strategies are the product of human endeavors, and the individuals most responsible for formulating and implementing strategic initiatives—chief executive officers (CEOs) and their top management teams—are subject to the same biases, motives, and limitations as everyone else. As a result, even though executives vary in their levels of discretion, firms tend to become reflections of those who lead them. This chapter synthesizes recent themes and trends in the strategic leadership domain while also providing suggestions on what we see as the most promising avenues for future research. The field has come a long way since its inception in the mid-1980s, but opportunities still abound for scholars seeking to shed light on the human element in firm strategy and performance.




Citations (71)


... Third, with innovative methodological approaches we align the underlying theoretical assumptions concerning the micro-level behavioral building blocks of leadership communication with the intra-team interaction patterns and communication dynamics that unfold in response. Doing so, we seek to provide impulses for a new type of leadership theory building, that is, theorizing at the level of concrete behaviors and its intersection to concrete team communication behaviors, where conceptualization and operationalization align (Banks et al., 2021;Fischer et al., 2023;Hemshorn de Sanchez et al., 2022;Kozlowski, 2022;Van Maanen et al., 2007). ...

Reference:

Exploring Respectful Inquiry in Leader-Team Interactions: The Differential Effect of Leader Question Asking and Listening on Team Interaction Dynamics in Decision Making
Leadership science beyond questionnaires
  • Citing Article
  • December 2023

The Leadership Quarterly

... Upper echelons theory (Hambrick, 2007;Hambrick & Mason, 1984) postulates that top managers' characteristics influence their decision-making, thus shaping such organizational outcomes as innovation capability. It also acknowledges that a team of top managers, rather than a single top manager, typically makes strategic decisions (Hambrick, 2018). Since TMTs must make strategic decisions under ambiguous circumstances and face more stimuli than they can process thoroughly (Hambrick, 2018), their decisions are guided by their inherent characteristics instead of purely objective analysis (Hambrick & Mason, 1984). ...

Upper Echelons Theory
  • Citing Chapter
  • May 2018

... Put differently, in most cases, the concern is more about whether leaders can steer their firms toward more radical innovation outcomes, and less about the adoption of specific management practices (O'Connor and Rice, 2013;Slater et al., 2014). This view is consistent with the strategic leadership perspective (Singh et al., 2023), which emphasizes the importance of top-level actors (as the case of CEOs) -namely strategic leaders-in explaining organizational outcomes because they take full responsibility for their firm's behavior by shaping strategy formulation, resource orchestration, and the work environment (Vera and Crossan, 2004;Samimi et al., 2020;Hambrick and Wowak, 2021). This is particularly true when considering radical innovation as an organizational outcome, given its inherently challenging nature and because it requires the greater involvement of strategic leaders than other types of innovation that are more conventional and/or related to day-to-day work (e.g., Menguc et al., 2014;O'Connor, 2008). ...

Strategic Leadership
  • Citing Chapter
  • October 2021

... When CEOs increase or decrease the number of GNPIs based on their political ideologies, they simultaneously express their political identities and their occupational identities as the top decision-makers in their firms (cf. Fuchs et al., 2019;Wowak et al., 2022). Early social identity research often assumed that only one identity could be salient at any given time, suggesting that as one identity becomes more prominent, others necessarily become less so (see Ashforth et al., 2008;Sluss & Ashforth, 2007). ...

How Do Employees React When Their CEO Speaks Out? Intra- and Extra-Firm Implications of CEO Sociopolitical Activism
  • Citing Article
  • February 2022

Administrative Science Quarterly

... More specifically, while researchers interested in other individual-based social evaluations like CEO celebrity (Lovelace et al. , 2022 or CEO status (Graffin et al. 2008) successfully reduced fragmentation by synthesizing influential findings, research on strategic leader reputation is still missing a comprehensive review (Sohn & Lariscy 2012). This is surprising, considering how theoretically fundamental and meaningful the notion of reputation is (Barnett & Pollock, 2012;Lange et al. 2011), and how practically relevant it is for strategic leaders in today's world, where reputation-forming information about strategic leaders of a company is readily available not only to insiders but also the public. ...

The Push and Pull of Attaining CEO Celebrity: A Media Routines Perspective
  • Citing Article
  • Full-text available
  • May 2021

Academy of Management Journal

... Navigating stakeholder relationships is central to the role of a CEO and is associated with key strategic outcomes (Gamache et al., 2020;Hambrick and Wowak, 2021b;Neville, 2022). When stakeholders grow dissatisfied with the firm and its leaders' efforts, they often turn to activism (DesJardine and Shi, 2023;Lee et al., 2022). Stakeholder activism constitutes instances in which stakeholders mobilize to place pressure on a firm to adopt certain policies and practices they believe advance their, the firm's, or society's interests (Eesley et al., 2016;Vasi and King, 2012). ...

The Distinct Effects of Wealth- and CSR-oriented Shareholder Unrest on CEO Career Outcomes: A New Lens on Settling Up and Executive Job Demands

Academy of Management Journal

... Thus, apart from experiencing events essential to the development of different pathways, to switch and reconcile the differences between pathways leaders must possess the ability to process and think in a multiplex and nuanced fashion. Meaning, they must have a high level of cognitive complexity (Bieri, 1955;Graf-Vlachy et al., 2020;Hale, 1980). Leaders high on cognitive complexity have a higher tolerance for ambiguity, can consider alternative views, and show greater strategic flexibility (Nadkarni & Narayanan, 2007;Streufert et al., 1968). ...

Effects of an Advancing Tenure on CEO Cognitive Complexity
  • Citing Article
  • March 2020

Organization Science

... In the case of an authentic leader, this individual should be allowed to have a significant impact on determining the requirements of the next hire because they have been cognizant of their own strengths and weaknesses. A successful leader may even adopt a generativity mindset that commits them to the development of next generation leadership in identifying and preparing a successor (Joshi et al., 2021). Otherwise, the individual should have a more limited impact SENIOR LEADER SELECTION on determining requirements as poor self-awareness could lead to highly biased estimations of future requirements. ...

The Generativity Mindsets of Chief Executive Officers: A New Perspective on Succession Outcomes
  • Citing Article
  • March 2020

Academy of Management Review

... The field of corporate nonmarket activities is undergoing significant changes as firms increasingly consolidate Corporate Political Activity (CPA) and Corporate Social Responsibility (CSR) agendas. These trends require greater attention from C-suite executives, who now face a growing set of socio-political issues, sometimes demanding that they take official positions on controversial issues (Hambrick & Wowak, 2021). In this shift we can see the emergence of a new, multidimensional framework -Corporate Socio-Political Engagement (CSPE). ...

CEO Sociopolitical Activism: A Stakeholder Alignment Model
  • Citing Article
  • April 2019

Academy of Management Review

... Although family firms often prefer family members in CEO roles, many publiclisted firms appoint nonfamily CEOs (Kang & Kim, 2016). Research suggests that nonfamily CEOs often bring new strategic perspectives and are more inclined to drive transformative change (Quigley et al., 2019). Conversely, family CEOs may be constrained by the need to align their strategies with family priorities, limiting their flexibility in adopting new initiatives (Thams et al., 2020). ...

CEO Selection as Risk‐taking: A New Vantage on the Debate About the Consequences of Insiders Versus Outsiders
  • Citing Article
  • April 2019

Strategic Management Journal