IDEAS home Printed from https://ideas.repec.org/a/eee/jbrese/v200y2025ics0148296325004722.html

CEO tenure and strategic time horizons: Exploring the trajectory of decision-making

Author

Listed:
  • Weis, Maximilian

Abstract

This paper examines how a CEO’s strategic time horizon—the temporal distance considered when making strategic decisions—evolves across their tenure. While upper echelons research links CEO cognition to firm outcomes, it often overlooks shifts occurring throughout a CEO’s tenure. Drawing on tenure-based models and cognitive psychology, the study theorizes an inverted U-shaped relationship: early-tenure CEOs focus on short-term goals to build credibility, mid-tenure CEOs adopt long-term perspectives as power grows, and late-tenure CEOs return to short-term priorities due to legacy concerns. The study also explores differences between insider and outsider CEOs, proposing that outsider CEOs maintain shorter time horizons throughout. Using growth modeling on data from 1,034 S&P 900 CEOs between 2004 and 2022, the findings support the hypothesized trajectory and moderation effect. The study contributes to upper echelons theory, CEO tenure research, and behavioral strategy by highlighting the dynamic and context-dependent nature of CEO temporal decision-making.

Suggested Citation

  • Weis, Maximilian, 2025. "CEO tenure and strategic time horizons: Exploring the trajectory of decision-making," Journal of Business Research, Elsevier, vol. 200(C).
    • Handle: RePEc:eee:jbrese:v:200:y:2025:i:c:s0148296325004722
    DOI: 10.1016/j.jbusres.2025.115649
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0148296325004722
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jbusres.2025.115649?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Alex Edmans & Xavier Gabaix & Tomasz Sadzik & Yuliy Sannikov, 2012. "Dynamic CEO Compensation," Journal of Finance, American Finance Association, vol. 67(5), pages 1603-1647, October.
    2. David Souder & Philip Bromiley, 2012. "Explaining temporal orientation: Evidence from the durability of firms' capital investments," Strategic Management Journal, Wiley Blackwell, vol. 33(5), pages 550-569, May.
    3. Vincent L. Barker , III & George C. Mueller, 2002. "CEO Characteristics and Firm R&D Spending," Management Science, INFORMS, vol. 48(6), pages 782-801, June.
    4. Jennifer Nevins & William Bearden & Bruce Money, 2007. "Ethical Values and Long-term Orientation," Journal of Business Ethics, Springer, vol. 71(3), pages 261-274, March.
    5. Ali, Ashiq & Zhang, Weining, 2015. "CEO tenure and earnings management," Journal of Accounting and Economics, Elsevier, vol. 59(1), pages 60-79.
    6. Kielan Yarrow & Patrick Haggard & Ron Heal & Peter Brown & John C. Rothwell, 2001. "Illusory perceptions of space and time preserve cross-saccadic perceptual continuity," Nature, Nature, vol. 414(6861), pages 302-305, November.
    7. David Souder & Zeki Simsek & Scott G. Johnson, 2012. "The differing effects of agent and founder CEOs on the firm's market expansion," Strategic Management Journal, Wiley Blackwell, vol. 33(1), pages 23-41, January.
    8. Wang, Xinchun, 2024. "Does CEO temporal myopia always lead to firm short-termism? The critical role of CEO optimism and perceived opportunity costs," Journal of Business Research, Elsevier, vol. 180(C).
    9. Donald C. Hambrick & Albert A. Cannella, 2004. "CEOs who have COOs: contingency analysis of an unexplored structural form," Strategic Management Journal, Wiley Blackwell, vol. 25(10), pages 959-979, October.
    10. T. K. Das, 1987. "Strategic planning and individual temporal orientation," Strategic Management Journal, Wiley Blackwell, vol. 8(2), pages 203-209, March.
    11. Jeongil Seo & Daniel L. Gamache & Cynthia E. Devers & Mason A. Carpenter, 2015. "The role of CEO relative standing in acquisition behavior and CEO pay," Strategic Management Journal, Wiley Blackwell, vol. 36(12), pages 1877-1894, December.
    12. Andrew P. Knight, 2015. "Mood at the Midpoint: Affect and Change in Exploratory Search Over Time in Teams That Face a Deadline," Organization Science, INFORMS, vol. 26(1), pages 99-118, February.
    13. Ivan Marinovic & Felipe Varas, 2019. "CEO Horizon, Optimal Pay Duration, and the Escalation of Short‐Termism," Journal of Finance, American Finance Association, vol. 74(4), pages 2011-2053, August.
    14. Daniel A. Levinthal & James G. March, 1993. "The myopia of learning," Strategic Management Journal, Wiley Blackwell, vol. 14(S2), pages 95-112, December.
    15. Tanya Menon & Jeffrey Pfeffer, 2003. "Valuing Internal vs. External Knowledge: Explaining the Preference for Outsiders," Management Science, INFORMS, vol. 49(4), pages 497-513, April.
    16. Joon Mahn Lee & Jung Chul Park & Timothy B. Folta, 2018. "CEO career horizon, corporate governance, and real options: The role of economic short‐termism," Strategic Management Journal, Wiley Blackwell, vol. 39(10), pages 2703-2725, October.
    17. Antia, Murad & Pantzalis, Christos & Park, Jung Chul, 2010. "CEO decision horizon and firm performance: An empirical investigation," Journal of Corporate Finance, Elsevier, vol. 16(3), pages 288-301, June.
    18. Jingoo Kang, 2016. "Labor market evaluation versus legacy conservation: What factors determine retiring CEOs' decisions about long-term investment?," Strategic Management Journal, Wiley Blackwell, vol. 37(2), pages 389-405, February.
    19. Ayse Karaevli & Edward J. Zajac, 2013. "When Do Outsider CEOs Generate Strategic Change? The Enabling Role of Corporate Stability," Journal of Management Studies, Wiley Blackwell, vol. 50(7), pages 1267-1294, November.
    20. Margarethe F. Wiersema, 1992. "Strategic Consequences Of Executive Succession Within Diversified Firms," Journal of Management Studies, Wiley Blackwell, vol. 29(1), pages 73-94, January.
    21. Nancy Staudenmayer & Marcie Tyre & Leslie Perlow, 2002. "Time to Change: Temporal Shifts as Enablers of Organizational Change," Organization Science, INFORMS, vol. 13(5), pages 583-597, October.
    22. Sucheta Nadkarni & Tianxu Chen & Jianhong Chen, 2016. "The clock is ticking! Executive temporal depth, industry velocity, and competitive aggressiveness," Strategic Management Journal, Wiley Blackwell, vol. 37(6), pages 1132-1153, June.
    23. Rhonda K. Reger & Timothy B. Palmer, 1996. "Managerial Categorization of Competitors: Using Old Maps to Navigate New Environments," Organization Science, INFORMS, vol. 7(1), pages 22-39, February.
    24. Theresa S. Cho & Donald C. Hambrick, 2006. "Attention as the Mediator Between Top Management Team Characteristics and Strategic Change: The Case of Airline Deregulation," Organization Science, INFORMS, vol. 17(4), pages 453-469, August.
    25. Yihui Pan & Tracy Yue Wang & Michael S. Weisbach, 2016. "CEO Investment Cycles," The Review of Financial Studies, Society for Financial Studies, vol. 29(11), pages 2955-2999.
    26. Kalin D. Kolev & David B. Wangrow & Vincent L. Barker & Donald J. Schepker, 2019. "Board Committees in Corporate Governance: A Cross‐Disciplinary Review and Agenda for the Future," Journal of Management Studies, Wiley Blackwell, vol. 56(6), pages 1138-1193, September.
    27. Vikas Agarwal & Rahul Vashishtha & Mohan Venkatachalam, 2018. "Mutual Fund Transparency and Corporate Myopia," The Review of Financial Studies, Society for Financial Studies, vol. 31(5), pages 1966-2003.
    28. Sarah Kaplan, 2011. "Research in Cognition and Strategy: Reflections on Two Decades of Progress and a Look to the Future," Journal of Management Studies, Wiley Blackwell, vol. 48(3), pages 665-695, May.
    29. Jihae You & Taekjin Shin & Yunhyung Chung, 2023. "Can powerful allies protect the CEO against performance declines? The role of the CEO's subgroup power in CEO dismissal," Strategic Management Journal, Wiley Blackwell, vol. 44(11), pages 2818-2830, November.
    30. Jeong, Nara & Kim, Nari & Arthurs, Jonathan D., 2021. "The CEO’s tenure life cycle, corporate social responsibility and the moderating role of the CEO’s political orientation," Journal of Business Research, Elsevier, vol. 137(C), pages 464-474.
    31. J. P. Eggers & Sarah Kaplan, 2009. "Cognition and Renewal: Comparing CEO and Organizational Effects on Incumbent Adaptation to Technical Change," Organization Science, INFORMS, vol. 20(2), pages 461-477, April.
    32. Chen, Wanyu (Tina) & Zhou, Gaoguang (Stephen) & Zhu, Xindong (Kevin), 2019. "CEO tenure and corporate social responsibility performance," Journal of Business Research, Elsevier, vol. 95(C), pages 292-302.
    33. Edward J. Zajac & James D. Westphal, 1994. "The Costs and Benefits of Managerial Incentives and Monitoring in Large U.S. Corporations: When is More not Better?," Strategic Management Journal, Wiley Blackwell, vol. 15(S1), pages 121-142, December.
    34. Zeki Simsek, 2007. "CEO tenure and organizational performance: an intervening model," Strategic Management Journal, Wiley Blackwell, vol. 28(6), pages 653-662, June.
    35. Yan Zhang & Nandini Rajagopalan, 2010. "Once an outsider, always an outsider? CEO origin, strategic change, and firm performance," Strategic Management Journal, Wiley Blackwell, vol. 31(3), pages 334-346, March.
    36. Dawn Harris & Constance Helfat, 1997. "Specificity of CEO human capital and compensation," Strategic Management Journal, Wiley Blackwell, vol. 18(11), pages 895-920, December.
    37. Lorenz Graf-Vlachy & Jonathan Bundy & Donald C. Hambrick, 2020. "Effects of an Advancing Tenure on CEO Cognitive Complexity," Organization Science, INFORMS, vol. 31(4), pages 936-959, July.
    38. Juha Uotila & Markku Maula & Thomas Keil & Shaker A. Zahra, 2009. "Exploration, exploitation, and financial performance: analysis of S&P 500 corporations," Strategic Management Journal, Wiley Blackwell, vol. 30(2), pages 221-231, February.
    39. Lingling Pan & Gerry McNamara & Jennifer J. Lee & Jerayr (John) Haleblian & Cynthia E. Devers, 2018. "Give it to us straight (most of the time): Top managers’ use of concrete language and its effect on investor reactions," Strategic Management Journal, Wiley Blackwell, vol. 39(8), pages 2204-2225, August.
    40. Rudd, Melanie & Vohs, Kathleen D. & Aaker, Jennifer, 2012. "Awe Expands People's Perception of Time, Alters Decision Making, and Enhances Well-Being," Research Papers 2095, Stanford University, Graduate School of Business.
    41. Shipp, Abbie J. & Edwards, Jeffrey R. & Lambert, Lisa Schurer, 2009. "Conceptualization and measurement of temporal focus: The subjective experience of the past, present, and future," Organizational Behavior and Human Decision Processes, Elsevier, vol. 110(1), pages 1-22, September.
    42. Yan Zhang, 2008. "Information asymmetry and the dismissal of newly appointed CEOs: an empirical investigation," Strategic Management Journal, Wiley Blackwell, vol. 29(8), pages 859-872, August.
    43. Musteen, Martina & Barker III, Vincent L. & Baeten, Virginia L., 2006. "CEO attributes associated with attitude toward change: The direct and moderating effects of CEO tenure," Journal of Business Research, Elsevier, vol. 59(5), pages 604-612, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jeong, Nara & Kim, Nari & Arthurs, Jonathan D., 2021. "The CEO’s tenure life cycle, corporate social responsibility and the moderating role of the CEO’s political orientation," Journal of Business Research, Elsevier, vol. 137(C), pages 464-474.
    2. James, Hui Liang & Jiraporn, Pornsit & Wang, Hongxia, 2025. "CEO tenure and labor investment efficiency," Journal of Contemporary Accounting and Economics, Elsevier, vol. 21(2).
    3. Maximilian Weis & Patricia Klarner, 2022. "A CEO’s Future Temporal Depth and Organizational Resilience," Schmalenbach Journal of Business Research, Springer, vol. 74(4), pages 659-693, December.
    4. Zhao, Shan & He, Xinming & Ma, Baichao & Zuo, Wenming, 2025. "Customer concentration, firm R&D investment and moderation effects," Journal of Business Research, Elsevier, vol. 186(C).
    5. J. Ruben Boling & Torsten M. Pieper & Jeffrey G. Covin, 2016. "CEO Tenure and Entrepreneurial Orientation within Family and Nonfamily Firms," Entrepreneurship Theory and Practice, , vol. 40(4), pages 891-913, July.
    6. Joo, Youngbin & Georgakakis, Dimitrios & Sidhu, Jatinder S., 2025. "CEO career horizon and innovation: A u-shaped tale of short-term profits and long-term legacy," Research Policy, Elsevier, vol. 54(5).
    7. Bastian Grühn & Steffen Strese & Tessa C. Flatten & Nikolai A. Jaeger & Malte Brettel, 2017. "Temporal Change Patterns of Entrepreneurial Orientation: A Longitudinal Investigation of CEO Successions," Entrepreneurship Theory and Practice, , vol. 41(4), pages 591-619, July.
    8. Bhussar, Manjot S. & Zorn, Michelle L. & Hill, Aaron D. & Schwarte, Ying, 2025. "Ready, set, go: CEO’S early tenure acquisitions & post-deal performance," Journal of Business Research, Elsevier, vol. 199(C).
    9. Guoli Chen & Ronghong Huang & Shunji Mei & Kelvin Jui Keng Tan, 2025. "CEO Initial Contract Duration and Corporate Acquisitions," Organization Science, INFORMS, vol. 36(1), pages 65-87, January.
    10. Yungu Kang & David Zhu, 2025. "Management by Originals: Inventor CEOs and Firms’ Strategic Change," Strategy Science, INFORMS, vol. 10(3), pages 226-244, September.
    11. Robert Langan & Nicolas Deuschel, 2025. "Interim CEO Successions: Implications for CEO Successor Selection and Subsequent Firm Performance," Organization Science, INFORMS, vol. 36(2), pages 786-808, March.
    12. Feifei Lu & Ho Kwong Kwan & Bin Ma, 2022. "Carry the past into the future: the effects of CEO temporal focus on succession planning in family firms," Asia Pacific Journal of Management, Springer, vol. 39(2), pages 763-804, June.
    13. Donald C. Hambrick & Eric Y. Lee, 2025. "A Model of CEO Succession Planning as a Risky Investment: Anticipated Costs, Uncertain Results, and Contingency Conditions," Organization Science, INFORMS, vol. 36(2), pages 677-696, March.
    14. Yoo, Seh-Hyun & Kim, Donggyu & Jin, Byungchae, 2025. "CEO turnover and innovation: Exploring the advisory role of inventor top management team members," Technovation, Elsevier, vol. 142(C).
    15. Luu Thi Nguyen & Shouming Chen & Ho Kwong Kwan, 2021. "CEO Temporal Focus and Corporate Philanthropy: The Moderating Role of Ownership," SAGE Open, , vol. 11(1), pages 21582440211, March.
    16. Choi, Yoonhee & Benner, Mary, 2025. "Shifting gears: Role of CEO turnover on shifts between exploration and exploitation," Journal of Business Research, Elsevier, vol. 191(C).
    17. Back, Pascal & Rosing, Kathrin & Dickler, Teresa Antonia & Kraft, Priscilla Sarai & Bausch, Andreas, 2020. "CEOs’ temporal focus, firm strategic change, and performance: Insights from a paradox perspective," European Management Journal, Elsevier, vol. 38(6), pages 884-899.
    18. Jantunen, Ari & Tuppura, Anni & Pätäri, Satu, 2024. "Dominant logic – Cognitive and practiced facets and their relationships to strategic renewal and performance," European Management Journal, Elsevier, vol. 42(1), pages 108-118.
    19. Cho, Seunghyun & Pae, Jinhan & Yoo, Choong-Yuel, 2025. "Post-traumatic growth of CEOs and corporate giving: Evidence from the Korean War," Research in International Business and Finance, Elsevier, vol. 80(C).
    20. Dean A. Shepherd & Jeffery S. Mcmullen & William Ocasio, 2017. "Is that an opportunity? An attention model of top managers' opportunity beliefs for strategic action," Strategic Management Journal, Wiley Blackwell, vol. 38(3), pages 626-644, March.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jbrese:v:200:y:2025:i:c:s0148296325004722. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/jbusres .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.