Abstract
Studies of small and medium-sized enterprises have provided evidence that CEOs of such firms can have a dominating influence on firm activities. Drawing on upper echelons theory, we analyze the influence of CEO personality (CEO internal locus of control), CEO ownership and CEO education on the evaluation of middle manager performance. In line with our expectations, we find evidence for a direct effect of CEO ownership (negative) and CEO education (positive) on the use of objective performance evaluations and for a direct effect of the CEO’s internal locus of control on the use of subjective performance evaluations. Moreover, we provide evidence for a moderating role of both CEO ownership and education with respect to the influence of the CEO’s locus of control on the use of subjective evaluations. We use a sample of 247 small and medium-sized manufacturing firms to test our hypotheses.
Highlights
The CEO has the primary responsibility for defining a firm’s strategic directions and goals as well as for guiding and regulating the actions of middle and lower KSchmalenbach Bus Rev (2017) 18:109–128 level managers who execute firm strategy (e. g. Calori et al 1994)
In line with findings from previous literature, we propose that CEO ownership and education contribute to explaining variation in the use of objective performance evaluations
We contribute to a better understanding of the role of CEO personality in small and mediumsized enterprises by focusing on a psychological characteristic of CEO personality, the internal locus of control
Summary
The CEO has the primary responsibility for defining a firm’s strategic directions and goals as well as for guiding and regulating the actions of middle and lower KSchmalenbach Bus Rev (2017) 18:109–128 level managers who execute firm strategy (e. g. Calori et al 1994). The powerful, sometimes even dominating influence of CEOs on firm activities ( in relatively small firms) has prompted enormous interest in the impact of CEO personality on strategic behaviors and the study of CEO personality has emerged as an important topic in management research (Chatterjee and Hambrick 2007; Chin et al 2013; Crossland et al 2014; Herrmann and Nadkarni 2014; Hiller and Hambrick 2005). G. Bamber et al 2010; Ge et al 2011) Among these studies only very few focus on management control system (MCS) choices and “theoretical insights and empirical findings about the relevance of top executives in designing, perceiving and using MCS are still rare” Among these studies only very few focus on management control system (MCS) choices and “theoretical insights and empirical findings about the relevance of top executives in designing, perceiving and using MCS are still rare” (Schaeffer and Dossi 2014, p. 219)
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
