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How much do CEOs really matter? Reaffirming that the CEO effect is mostly due to chance

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  • Markus A. Fitza

Abstract

How much of the variance in firm performance can be attributed to CEOs? This question has been the focus of a long debate in management research. In a recent study, I showed that a large portion of the performance differences that are often attributed to CEOs might in fact be due to chance. In a recent article, Quigley and Graffin argue that my conclusions can be avoided if more advanced methodological approaches are applied. Here I show that this is not the case, in fact if more realistic assumptions of how chance can affect firm performance are made, the effect of CEO leadership is almost indistinguishable from the effect of chance, independent of the estimation methodology. Copyright © 2016 John Wiley & Sons, Ltd.

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  • Markus A. Fitza, 2017. "How much do CEOs really matter? Reaffirming that the CEO effect is mostly due to chance," Strategic Management Journal, Wiley Blackwell, vol. 38(3), pages 802-811, March.
    • Handle: RePEc:bla:stratm:v:38:y:2017:i:3:p:802-811
    DOI: 10.1002/smj.2597
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    9. Waldkirch, Matthias, 2020. "Non-family CEOs in family firms: Spotting gaps and challenging assumptions for a future research agenda," Journal of Family Business Strategy, Elsevier, vol. 11(1).
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    13. Tobias Keller & Martin Glaum & Andreas Bausch & Thorsten Bunz, 2023. "The “CEO in context” technique revisited: A replication and extension of Hambrick and Quigley (2014)," Strategic Management Journal, Wiley Blackwell, vol. 44(4), pages 1111-1138, April.

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