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Information Asymmetries in the Hiring Process and the Risk of New Leader Dismissal: Insights from English Premier League Soccer Organizations
Author(s) -
Desai Malay N.,
Lockett Andy,
Paton David
Publication year - 2018
Publication title -
british journal of management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.407
H-Index - 108
eISSN - 1467-8551
pISSN - 1045-3172
DOI - 10.1111/1467-8551.12210
Subject(s) - dismissal , league , agency (philosophy) , process (computing) , sample (material) , public relations , information asymmetry , political science , business , management , accounting , sociology , economics , law , finance , computer science , social science , chemistry , physics , chromatography , astronomy , operating system
Why are some new leaders dismissed more quickly than others? Adopting agency theory logic, the authors examine how different succession contexts shape boards’ information asymmetries about a potential candidate's competencies in the hiring process, which influences the propensity of making poor hiring decisions and hence the risk of new leader dismissal. Employing duration analysis on a sample of 164 newly appointed leaders in the English premier league (1996–2014), the authors find that the risk of new leader dismissal is: (i) greater when the predecessor leader's exit was initiated by them rather than by the board; (ii) greater when following a longer‐tenured predecessor; and (iii) lower for outside successions compared with inside successions.