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Follow the leader (or not): The influence of peer CEOs’ characteristics on interorganizational imitation

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  • Abhinav Gupta
  • Vilmos F. Misangyi

Abstract

Research Summary: We argue that because charisma and narcissism represent widely held prototypes of effective and ineffective forms of leadership, respectively, the likelihood that a focal firm will imitate the practices of its peer firms is affected by these peer firms’ CEO characteristics. We theorize that peer firm CEO charisma enhances the focal firm’s imitation of peer firms’ behaviors, while peer firm CEO narcissism diminishes it. We further posit that the uncertainty of the context affects these imitation processes: industry dynamism and prior experience in a given strategic domain, respectively, strengthens and dampens focal firms’ susceptibility to these peer CEOs’ attributes. We test and find support for these ideas using a longitudinal sample of Fortune 500 firms in two distinct domains, corporate strategy and corporate social responsibility. Managerial Summary: When companies are uncertain about the costs and benefits of strategic actions this may lead them to imitate the actions of peer companies. But given the uncertainty, the challenge for executives is: which companies to emulate and which to ignore? In a sample of Fortune 500 companies, we find that the charisma or narcissism of a peer company’s CEO positively or negatively influences, respectively, the degree to which the peer company’s strategic actions are imitated. We reason that this is because these particular CEO attributes are widely believed to drive leadership effectiveness or ineffectiveness, respectively. We also find that the effects of these CEO characteristics on imitation are stronger in dynamic industry environments and weaker for companies that already have experience with the given strategy.

Suggested Citation

  • Abhinav Gupta & Vilmos F. Misangyi, 2018. "Follow the leader (or not): The influence of peer CEOs’ characteristics on interorganizational imitation," Strategic Management Journal, Wiley Blackwell, vol. 39(5), pages 1437-1472, May.
    • Handle: RePEc:bla:stratm:v:39:y:2018:i:5:p:1437-1472
    DOI: 10.1002/smj.2765
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    Cited by:

    1. Jana Oehmichen & Sebastian Firk & Michael Wolff & Franz Maybuechen, 2021. "Standing out from the crowd: Dedicated institutional investors and strategy uniqueness," Strategic Management Journal, Wiley Blackwell, vol. 42(6), pages 1083-1108, June.
    2. Xin Liu & Lin Zhang & Abhinav Gupta & Xiaoming Zheng & Changqi Wu, 2022. "Upper echelons and intra‐organizational learning: How executive narcissism affects knowledge transfer among business units," Strategic Management Journal, Wiley Blackwell, vol. 43(11), pages 2351-2381, November.
    3. Danchi Tan & Weichieh Su & Joseph T. Mahoney & Yasemin Kor, 2020. "A review of research on the growth of multinational enterprises: A Penrosean lens," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 51(4), pages 498-537, June.
    4. Abhinav Gupta & Anna Fung & Chad Murphy, 2021. "Out of character: CEO political ideology, peer influence, and adoption of CSR executive position by Fortune 500 firms," Strategic Management Journal, Wiley Blackwell, vol. 42(3), pages 529-557, March.
    5. Dong, Dayong & Yang, Mo & Yang, Gaoju & Chen, Chang-Chih & Zhang, Xinyi, 2022. "Talk less and do more: Expected strategic adjustments vs. actual changes in the Chinese firms," Pacific-Basin Finance Journal, Elsevier, vol. 75(C).
    6. Yoo Jung Ha, 2021. "Foreign multinational enterprises and eco-innovation in local firms: the effect of imitation," Asian Business & Management, Palgrave Macmillan, vol. 20(4), pages 488-517, September.
    7. Brian L. Connelly & Qiang (John) Li & Wei Shi & Kang‐Bok Lee, 2020. "CEO dismissal: Consequences for the strategic risk taking of competitor CEOs," Strategic Management Journal, Wiley Blackwell, vol. 41(11), pages 2092-2125, November.
    8. Dmitry Sharapov & Jan‐Michael Ross, 2023. "Whom should a leader imitate? Using rivalry‐based imitation to manage strategic risk in changing environments," Strategic Management Journal, Wiley Blackwell, vol. 44(1), pages 311-342, January.
    9. Hansin Bilgili & Jonathan L. Johnson & Tsvetomira V. Bilgili & Alan E. Ellstrand, 2022. "Research on social relationships and processes governing the behaviors of members of the corporate elite: a review and bibliometric analysis," Review of Managerial Science, Springer, vol. 16(8), pages 2285-2339, November.
    10. Luisa Gagliardi & Myriam Mariani, 2022. "Trained to lead: Evidence from industrial research," Strategic Management Journal, Wiley Blackwell, vol. 43(4), pages 847-871, April.

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