THE EVENT OF CEO SUCCESSION, PERFORMANCE, AND ENVIRONMENTAL CONDITIONS

Abstract

The article discusses the results of a research which examined the specific aspects of performance and environmental volatility that might be related to the event of executive succession. The authors analyzed data from 313 large industrial firms gathered by “Fortune“. The authors investigated data that contained information on the market environment, strategy, and performance of organizations. Succession was labeled as either present or absent for each firm against financial performance in terms of return on assets. Thirty one percent of the sample experienced managerial succession. Profits were found to be a weak predictor of executive succession. Divestiture and mergers were found to be significant predictors of succession.