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CEO influences on firms' strategic actions: A comparison of CEO-, firm-, and industry-level effects

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  • Zacharias, Nicolas A.
  • Six, Bjoern
  • Schiereck, Dirk
  • Stock, Ruth Maria

Abstract

This study investigates the importance of CEO-level effects for firms' strategic actions, compared with the impact of firm- and industry-level effects. Strategic actions reflect the firm's competitive initiatives and choices regarding financial issues and resource allocation. Drawing on strategic leadership theories, the resource-based view, industrial organization economics, and the reconciling approach of managerial discretion, this study proposes that the CEO's influence varies across different categories of strategic actions. By applying a variance decomposition approach to a 20-year sample of 110 firms in 10 industries, the authors reveal that for competitive initiatives, CEO-level effects are associated with the largest amount of variance, together with firm-level effects. Contrary to expectations, firm-level effects are most relevant for financial choices, followed by CEO effects. Resource allocation depends mainly on firm-level effects, rather than on CEO- or industry-level effects.

Suggested Citation

  • Zacharias, Nicolas A. & Six, Bjoern & Schiereck, Dirk & Stock, Ruth Maria, 2015. "CEO influences on firms' strategic actions: A comparison of CEO-, firm-, and industry-level effects," Journal of Business Research, Elsevier, vol. 68(11), pages 2338-2346.
    • Handle: RePEc:eee:jbrese:v:68:y:2015:i:11:p:2338-2346
    DOI: 10.1016/j.jbusres.2015.03.045
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    2. Fernandes, Cristina I. & Veiga, Pedro M. & Ferreira, João J. & Rammal, Hussain G. & Pereira, Vijay, 2022. "Assessing strategic leadership in organizations: Using bibliometric data to develop a holistic model," Journal of Business Research, Elsevier, vol. 141(C), pages 646-655.
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    5. Chen, Fu Chen & Indiran, Logaiswari Indiran & Abdul Kohar, Umar Haiyat Abdul Kohar, 2023. "Disruptive Innovation (DI) and Chief Executive Officer(CEO): A synthetic literature review," MPRA Paper 119321, University Library of Munich, Germany, revised 26 Oct 2023.

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