Organizational influence across CEO life cycle: The moderating roles of prior performance and status

Abstract

The CEO life cycle framework suggests discernable phases over CEO tenure that are associated with an inverted-U performance trajectory. The trajectory exhibits a performance improvement followed by a stagnation and ultimate decline. In this study, we investigate this general performance trajectory and leverage the behavioral theory of the firm to examine the moderating effect of an organizational-level factor – prior performance – on CEO life cycle. We also investigate the moderating effect of organizational status as an important organizational-level attribute on CEO life cycle. Through a multilevel analysis performed using random coefficient growth modeling of College Football Bowl Subdivision head coach data, we show the performance trajectory of CEOs can vary under different organizational conditions. Specifically, CEOs entering high performance organizations appear to have less initial performance improvement and a longer stagnation, while CEOs of higher organizational status exhibit a deferred and reduced performance decline. As such, this paper contributes to the understanding of how organizational-level factors can impact CEO tenure phases and associated performance patterns.