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The CEO Performance Effect: Statistical Issues and a Complex Fit Perspective
Author(s) -
Blettner Daniela P.,
Chaddad Fernando R.,
Bettis Richard A.
Publication year - 2012
Publication title -
strategic management journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 11.035
H-Index - 286
eISSN - 1097-0266
pISSN - 0143-2095
DOI - 10.1002/smj.1949
Subject(s) - interdependence , perspective (graphical) , affect (linguistics) , econometrics , aggregate (composite) , performance management , empirical research , industrial organization , computer science , business , operations research , marketing , economics , psychology , statistics , engineering , sociology , artificial intelligence , mathematics , materials science , communication , composite material , social science
How CEOs affect strategy and performance is important to strategic management research. We show that sophisticated statistical analysis alone is problematic for establishing the magnitude and causes of CEO impact on performance. We discuss three problem areas that substantially distort the measurement and sources of a CEO performance effect: (1) the nature of performance time series, (2) confounding and (3) the discovery of many interactions associated with the CEO performance effect. We show that the aggregate of empirical research implies complex interdependency as the driver of the CEO performance effect. This suggests a ‘fit’ model requiring new research approaches. Copyright © 2011 John Wiley & Sons, Ltd.