Causes of Changes in Top Management

Abstract

Empirical research into the causes of change in top management has been biased in favour of certain type of enterprises (big size companies which quote at stock exchange) and in favour of certain type of performance measures (financial profitability), mainly because the easiness of getting data. This study uses a sample of enterprises with very different sizes and utilises as enterprise performance indicator the variation in sales. This work pursues two objectives. On the one hand, it pursues to empirically investigate the essential determinants that provoke a change in top management. On the other hand, it pursues to specify those factors that condition the choice as enterprise top manager successor of an outside to the company individual. The results obtained question some established hypothesis in the literature. Previous researches have assumed that manager’s replacement due to no forced causes (retirement, decease, illness…) are random distributed in the population; nevertheless, the results seem to show that our hypothesis is not conform to ¿he reality in certain circumstances.KeywordsManagement turnoverCEO successionOrigin of successorPerformance