The CEO has retired, but has he? In family firm successions the reverse is generally true.
Continued post-succession engagement of CEO predecessors is a common phenomenon in family firm successions. The literature describes successions as an evolutionary process where the old executive phases out and his successor phases in. However, research on the exact circumstances under which a predecessor remains active subsequent to a CEO succession is relatively uncharted territory.
By analyzing empirical evidence from a unique data set on 807 German family firm successions, the article "Underlying Mechanics of a Succession Dance: Predecessor Preferences, Human Capital, and Ownership" article analyzes what drives continued predecessor involvement. Drawing on (behavioral) agency theory and the resource based view, it casts light on this phenomenon three perspectives: human capital, ownership transition, and predecessor preferences.
The article reveals that two thirds of all predecessors stay active in the post-succession phase. Furthermore, 55.3% keep ownership shares. A key finding is that the likelihood of predecessor activity is increased by family succession, nepotistic preferences of the senior CEO, and tacit knowledge of the predecessor CEO, but reduced by the successor’s human capital, successor’s ownership, and corporate age. The key contribution is a closer look into the mechanics and context factors that characterize the handover-phase, which is sometimes referred to as the “succession dance” between successor and predecessor. The authors are invited to submit an abbreviated version of the article to the Academy of Management Proceedings 2015.
The Academy of Management is considered by many management scholars as the leading conference of their discipline. The 2015 Academy of Management Annual Meeting is the premier conference for more than 10,000 students, academics, scholars, and professionals in the scholarly management and organization space. This year’s 75th Annual Meeting of the Academy of Management was held August 7-11, 2015, in Vancouver, Canada.
Since its beginning in 1936, the Academy of Management has evolved from an organization of 10 members to an organization of over 19,000 members from nearly 120 nations. It publishes five journals: the Academy of Management Annals, Academy of Management Learning and Education (AMLE), Academy of Management Journal (AMJ), Academy of Management Review (AMR); Academy of Management Perspectives (AMP) - formerly the Academy of Management Executive (AME).
The article can be requested via:
www.researchgate.net/publication/2759...
