Abstract
AbstractThis article analyses the impact of chief executive officer's (CEO) educational background, that is, business degree (an MBA) on corporate strategies. In essence, the study tests how differences in educational backgrounds, MBACEOs vis‐à‐vis non‐MBACEOs, determine their strategic choices pertaining to financial inclusion. The study evaluates this relationship in the third‐sector, faith‐based charity organizations (FCOs) context. Using a longitudinal sample of FCOs operating in a developing Muslim‐majority country, this paper reports that CEO's educational background, that is, an MBA degree matters for financial inclusion. These findings demonstrate how CEO's educational background shape the strategic posture of third‐sector organizations such as the FCOs. Additionally, the interaction effects further suggest that MBACEOs derive their imputes from robust sutural positions within the organization such as role duality, founder and internally hired CEO status. Results reported in this study have import economic and policy implications.
Highlights
Chief executive officers (CEOs) possess heterogeneous talents and abilities that shape the corporate strategic posture (Nawaz, 2020)
The significant positive relationship across MBACEO and financial inclusion (FI) measure indicates that this finding is robust to alternative model specifications
The finding observed in this study suggest that MBACEOs have divergent strategic preferences compared to their non-MBA counterparts (Finkelstein et al, 2009) as they pursue strategies that are in the best interest of their socially- and economically-deprived clientele
Summary
Chief executive officers (CEOs) possess heterogeneous talents and abilities that shape the corporate strategic posture (Nawaz, 2020). At the crux of these literatures is that MBA CEOs tend to be confident leaders (Malmendier & Tate, 2005) with the intrinsic ability to develop more innovative business models when leading complexed organizations (Bertrand & Schoar, 2003) Taken together, both anecdotal and empirical evidence suggest that CEO's demographic traits such as education background, that is, an MBA degree do matter for corporate strategies. The study empirically test the theorizing using a novel hand-built dataset belonging to 73 FCOs, operating in a Muslim majority country, that is, Pakistan for the period 2001 to 2017 This is the first study to analyse the effect of CEO's education background, that is, an MBA on corporate strategies pertaining to financial inclusion.
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