Abstract
Despite the plethora of empirical studies on the effects of CEO succession on the organization, we know very little about the mechanism through which the origin of the new CEO impacts the strategic course of actions at the firm-level. Drawing from the attention-based perspective of firms, we argue that the relationship between the origin of a new CEO and organizational attention is influenced by the predecessor’s performance and status. Our empirical results suggest that firm with new outsider CEOs indeed exhibited less “attentional stickiness” at the firm-level; however, the level of attentional stickiness actually increased when the predecessor CEO’s performance was high. Moreover, we find that the status of the predecessor moderates this effect of prior performance. Specifically, an outsider CEO would lead to the highest level of firm-level attentional stickiness when both predecessor’s performance and status are high. The results of this study shed light on the interlinkages between CEO turnover and transformation of organizational attention, as well as the role of executive status in the process.
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