Executive succession: past, present & future

Idalene F. Kesner

Benston, G. (1985). The self-serving management hypothesis: Some evidence. Journal of Accounting and Economics, 7: 67-84.

Birnbaum, R. (1971). Presidential succession: An inter-institutional analysis. Educational Record, (Spring): 133-145.

Boeker, W. (1992). Power and managerial dismissal: Scapegoating at the top. Administrative Science Quarterly, 37: 400-421.

Boeker, W. & Goodstein, J. (1993). Performance and successor choice: The moderating effects of governance and ownership. Academy of Management Journal, In this study we review over thirty years of succession research in an effort to discern what we know conclusively about the subject, what we do not know because of mixed results, and what has not yet been studied. We begin by answering two key questions: (1) Why is succession such an important topic? and (2) What makes CEO succession different from other types of turnover? Next, we explore the three key stages of succession research. The first phase covers the period from the 1950s to the 1960s. This period is best described as the emergence of the field. The second phase, covering the 1970s, reflects a period of theory building and empirical investigation. The final phase from the 1980s to the present is characterized by review and explosive growth. Following our review, we use these combined studies to create an overall model of succession–a model designed to offer prescriptions as to where researchers have been and where they should be going in the future.

“Executive succession,” “passing the baton,” and “CEO transition” are all expressions that are familiar to us. They capture what, in recent years, has become a topic of intense interest. Reports of key corporate successions appear routinely in the popular press. In academic outlets, too, attention to the topic has skyrocketed. Indeed, a survey of succession articles, which have appeared in major management and strategy journals, reveals a 250 percent increase in the number of pieces from the 1970s to the 1990s.

There is, as the saying goes, good news and bad news about this increased interest in top management succession. With more researchers focusing on the topic, we are beginning to see succession studies taking on greater rigor and relevance. Yet, at the same time, the increased attention has created a diffused and often chaotic research stream. Consequently, when it comes to executive succession, there is little that we know conclusively, much that we do not know because of mixed results, and even more that we have not yet studied. Our purpose here is to address these three levels of knowledge and offer the reader a perspective on this critically important topic. We begin by asking and answering the questions “Why is succession so important?” and “What makes CEO succession different from other types of turnover?” Next, we review the foundations of the succession literature. Without a sense of where succession research began, it is difficult to understand the strengths and weaknesses of its evolutionary progression. After reviewing this foundation, we then explore current works in the area. We use these works as inputs in an effort to create an overall model of succession. It is our belief that this model provides perspective on where researchers have been and where they should be going in the future. Indeed, in our final section, we use this newly developed model to establish a research agenda for future work.

The Importance of CEO Succession

One decade ago in their book entitled Executive Succession, Brady and Helmich (1984) wrote about the “dearth of systematic studies devoted to the subject.” The authors’ message was simple but important: Given the rather significant impact of leadership transition on a firm, it is surprising that so little research attention has been spent in the area. Inherent in the arguments of Brady and Helmich was the idea that succession is a traumatic event for any organization. It affects not only the members of the organization but the firm’s economic and political climate as well. It is important, therefore, that we understand this critical change process. It is this same basic message that is echoed throughout the research on strategic leadership. Hambrick and Mason (1984) and others (e.g., Chaganti & Sambharya, 1987; Miller, Kets De Vries & Toulouse, 1982) have stressed that organizations are a reflection of their top managers and the decisions they make. Similarly, Dalton and Kesner (1985) stress that the CEO is the agent who is ultimately responsible and accountable for action on and reaction to an organization’s strategy, design, performance and environment. In fact, the title “CEO” has come to signify the individual who has ultimate legal authority and responsibility in today’s corporate hierarchy (Vancil, 1987). The CEO’s role has been described as the most powerful of the power centers, controlling and directing the efforts of the organization toward its goals (Brady & Helmich, 1984). It is the CEO who determines the central concept of a business (Lauenstein, 1980).

Over time, however, firms require more than one CEO. Consequently, what a firm becomes can be significantly influenced by how and to whom this power and authority are passed. Succession affects all types of constituents at virtually every level of the organization. To those internal to the firm, CEO succession may be seen as the most pervasive type of management change. Every employee is likely to experience some effects due to the transition. To external constituents (e.g., shareholders, suppliers, customers, the public, the government), it is the CEO who most symbolizes the organization. The CEO represents the ultimate decision-maker and the person with absolute authority. As such, external parties are likely to view succession as a signal about the institution’s future (Beatty & Zajac, 1987), and the successes and failures of individual CEOs often translate into the successes and failures of the firm. This makes CEO succession a defining event for virtually every organization (Chaganti & Sambharya, 1987; Jauch, Martin & Osborn, 1980; Zald, 1969).

CEO Succession: A Unique Case

It is because of the pervasiveness of the CEO’s impact on the firm and the symbolism of succession that CEO succession is considered different from turnover at lower levels. Speculation often runs high after a succession event, and it is not uncommon for succession to trigger other dramatic changes (e.g., additional executive departures, significant increases or decreases in stock price, major shifts in a firm’s strategic direction). Few if any transitions at other organizational levels have as profound an effect either inside or outside the firm.

CEO succession may also represent a unique case because the nature of the CEO’s job is substantially different from other organizational positions. The job is idiosyncratic, nonroutine, and unstructured. It would be difficult, for example, to identify a systematic program of activities facing the CEO on a routine basis. Yet, even if such a list were available, it is doubtful it would cover even one-third of the CEO’s activities. As Rowan (1983) suggests, the tasks of picking a new CEO is “tricky”–there is nothing typical about the typical CEO.

Still another difference is the frequency of turnovers. CEO succession is relatively rare. According to Vancil (1987), the tenure of a CEO averages more than 14 years. When compared to other management positions, this difference is rather dramatic. Eitzen and Yetman (1972), for example, found the average tenure of middle managers in their study to be 5.9 years. The infrequency of succession is particularly important when considering the decision-makers. The board of directors is the group responsible for the succession decision. Yet, participation in previous CEO selection decisions may not be instructive for directors. Paraphrasing the general findings of Hogarth (1987), and Einhorn and Hogarth (1981), learning from these types of decisions is difficult. Their relative infrequency and the gap between the time of the decision and the evaluation of the outcome, limits the degree and impact of director experience. Moreover, in most large firms, boards are composed of a majority of outside directors (i.e., non-employees) who meet fewer than ten times a year (Heidrick & Struggles, 1987). Unlike turnover at lower levels, CEO succession decisions frequently rest in the hands of individuals who may be relatively unfamiliar with the organization and its internal processes.

For all these reasons–the nature of the job, the infrequency of turnover, the visibility of the event, and the background of the decision-makers–the topic of CEO succession is critically important yet unique and separate from turnover at other levels. In the next section, we review the early studies that serve as the foundation for this important research.

The Foundations of Succession Literature

PHASE I: The Emergence of the Field

While there is some debate as to the origins of succession as a research topic, few question the significant role played by Oscar Grusky throughout the 1960s. Prior to Grusky’s work, much of what was known about succession was the result of individual case studies (e.g., Dale, 1957; Gouldner, 1950; 1954; Whyte, 1949). Consequently, early observations by Grusky (1960) that the field lacked systematic investigation was a first step in setting the succession literature on a more scientifically rigorous course of study.

Grusky was among the first to identify key variables in the succession equation, to establish a research model, and to test hypotheses. Indeed, his work and that of Carlson (1961; 1962) set the agenda for how researchers approached the topic over the succeeding decades. What evolved was a series of studies which can be grouped into four main areas: (1) successor origin; (2) the impact of organizational size on succession frequency, and the relationship between succession frequency and subsequent firm performance.(1) The early literature in each of these areas is reviewed in the sections below.

Successor Origin. Perhaps no area of succession work has drawn more attention than the topic of successor origin. Two studies, one by Carlson (1961) and another by Grusky (1964), were among the first to consider origin as a critical variable, and they offered two important contributions. First, they set a cornerstone in defining insiders versus outsiders. Second, they established a starting point for investigating the linkages between succession and its consequences. After studying more than 200 school superintendents, for instance, Carlson concluded that successors promoted from within organizations made fewer changes, were compensated less, and achieved less interorganizational status than those brought in from outside. Investigating this same issue of successor origin, but using other dependent variables, Grusky (1964) came to a different conclusion about inside successors. After studying transitions in baseball team managers, he concluded that inside successors were associated with improved team performance, while outside successors experienced no change in their win/loss record when they followed managers who were removed for reasons of poor performance.

While these two examples highlight some of the important individual and organizational consequences of succession, they also illustrate what has become a pattern throughout much of the research. By using unique methodologies (e.g., data samples, variable selection and definitions, analytical procedures), there is little comparability across studies, and mixed findings are commonplace. This, in turn, has made it difficult to draw firm conclusions.

Organizational Size & Rate of Succession. Still another area which was the focus of early work was the relationship between rate of succession and organizational size. Research in this area offered three important insights. First, succession rates varied depending on the size of firms. Larger organizations experienced more frequent successions than smaller firms. This finding was supported in studies involving both for profit and non-profit organizations (Grusky, 1961; 1964; Kriesberg, 1962; Trow, 1961). A second, and related, insight was that larger firms experienced more frequent successions because they were more bureaucratic in nature. According to Grusky (1961), bureaucracies were capable of “controlling by rational means the disruptive responses often created by succession in key policy-making positions”. In addition, succession was regarded as a means for bureaucracies to adapt to their changing environments.

In an effort to link these first two insights, Perrucci and Mannweiler (1968) focused on operationalizing the relationship between size and increased bureaucratization (measured as complexity)–an association which had been only assumed in earlier studies. While the authors confirmed a positive relationship between size and succession rate, their results did not show a comparable relationship with complexity. Thus, the reasons for the relationship between size and succession remained illusive.

A third insight produced by this stream echoed the results found in the successor origin area. Findings were dramatically affected by the ways in which variables were operationalized. Gordon and Becker (1964), for example, reanalyzed the work of others using different measures of size. According to the authors, while some measures of size may have been related to succession frequency, the hypothesized relationship did not exist in the case of gross sales and total employees. Thus, while studies in this area produced a consistent message about the importance of size vis-a-vis succession, there was little consistency in explanations of how and why this relationship existed.

Succession Rate and Post-Succession Performance. A related area, which also drew the attention of early researchers, focused on the relationship between succession frequency and post-succession performance. This stream was perhaps most notable because it helped established what became known as the “three theories of succession.” The first theory, referred to as “common sense,” suggested that performance improved following succession. In other words, when replacing a CEO, decision-makers would choose someone with the expertise and experience to enhance firm performance.

A second theory served as the counter to this perspective. The “vicious cycle” theory suggested that frequent successions were disruptive to organizations and, therefore, resulted in lower firm performance. Moreover, because succession was often a response to poor performance, it was not uncommon to see a downward cycle or spiral. Using baseball team managers as the sample, Grusky (1963) was among the first to show support for this relationship. Moreover, his results also suggested that changes in the rate of succession were inversely related to post-succession performance–a finding which was supportive of earlier work by Trow (1961).

In a critique of Grusky’s work, Gamson and Scotch (1964) pointed out the problems of causality. According to the authors, a number of explanations could have accounted for Grusky’s findings. As suggested, it was possible that frequent successions led to vicious cycles. Or, the relationship might have been the reverse (i.e., poor performance led to successions). It was also possible, however, that no systematic relationship existed between the variables but that the observed dismissals were a form of scapegoating. This last explanation suggested that team managers may have had little to do with their teams’ poor performance. Nevertheless, dismissals served as an important signal to those outside the organization that change was taking place. This last explanation became the basis for a third theory of succession known as “ritual scapegoating.” Although Gamson and Scotch were unable to support any of the three possible explanations from their reanalysis of Grusky’s (1963) sample, it was this third explanation that the authors preferred.

These three theoretical perspectives (i.e., common sense, vicious cycle, and ritual scapegoating) were among the most important contributions of the 1960s. They served as a backdrop for research in the next decade, and they encouraged numerous management researchers to broach the ultimate question, “Does leadership matter?” (Lieberson & O’Conner, 1972; Weiner & Mahoney, 1981; Smith, Carson & Alexander, 1984; Thomas, 1988).

Succession Contingencies. A fourth area which characterized the early succession work can best be described as succession contingencies. In an attempt to understand the relationship between succession and performance, researchers focused on two types of contingency variables. The first group involved individual characteristics of the successor such as leadership style (Kotin & Sharaf, 1967). The second group involved organizational characteristics. Gouldner (1954) and Guest (1962), for example, used extensive case studies to demonstrate that the impact of succession on organizational performance depended on factors such as firm structure and performance of the predecessor. Similarly, Grusky (1969) demonstrated that succession with an ally affected subsequent performance. Specifically, he found that where no ally was present, successors had more difficult adjustments, a decreased sense of security and less effective communications with other organizational members.

In many respects, these early contingency-based studies opened a type of Pandora’s Box. They laid the groundwork for an increasingly large and complex research path, which required attention to both individual and organizational factors. Indeed, the Kotin and Sharaf (1967) study was among the first to underscore this point. Examining the administrative styles of predecessors and their successors, the authors found that both factors affected the succession-performance relationship. They went on to highlight the importance of organizational-manager “fit” as a key influence in post-succession performance. According to the authors, “The success of change may depend on the fit between a successor’s style and the needs of the organization at a given time”.

Summary. Table 1 presents a summary of the contributions made by these early succession researchers. As noted throughout, these studies were important because they articulated, often for the first time, a number of theoretical perspectives–perspectives which continue to inform the literature stream today. Moreover, these works were the beginning of a systematic research program, which included the operationalization of critical variables and the identification of key data sources and methodologies. At the same time, however, we must be careful in applying these early findings. Many studies were limited by small sample sizes and measurement problems. Researchers often operationalized TABULAR DATA OMITTED variables in unique ways making it difficult to compare mixed results across studies. And, in some cases researchers drew conclusions that were supportive of their views despite a lack of statistical significance. It is not surprising, therefore, that this first research phase generated more questions than it answered. Even so, this was a crucial period for establishing the foundation of later succession work.

PHASE II: Building Theory and Gaining Empirical Evidence

While the first phase of succession research reflected an embryonic or developmental stage, the second decade was characterized by rapid growth. Like the prior ten years, a few select authors were instrumental in furthering our knowledge and understanding of key issues. Helmich, with his thirteen articles and Pfeffer, with six publications, led the way. Like the period of the 1960s, much of the work remained concentrated in two key areas: (1) successor origin; and (2) succession frequency. Also, at this time, attention to successor characteristics and the role of corporate boards increased dramatically. In the latter case, rather than focusing exclusively on the antecedents and consequences of succession, researchers began to tackle the equally tough questions concerning the decision-making process and decision-makers. Included in this was the development of succession frameworks and typologies. Table 2 presents an overview of the work during this second era in succession research. In the sections that follow, each of these areas is explored in greater detail.

Successor Origin. Like the successor origin research of the 1960s, work in this second phase began with researchers clarifying the terms “insiders” and “outsiders.” Traditionally, outsiders were defined as individuals who were not employed by the organization, while insiders were defined as current or previous employees. Birnbaum (1971), however, challenged these traditional definitions with his study of university and college presidents. The author introduced the concept of industry or contextual familiarity. Although universities commonly selected new presidents who were technically outsiders, Birnbaum found that all outsiders were not alike. Successors, who had been socialized and trained in institutions which had similar characteristics to their recruiting organizations, experienced less post-succession conflict and greater organizational stability. In addition, the author pointed to the significance of a “prestige” match between candidates and their institutions, suggesting that outsiders were often “insiders” on critical criteria other than service within their particular institution.

Touching on this same issue, Pfeffer and Leblebici (1973) found differences in the successor-performance relationship depending on whether outside successors came from within or outside the industry.(2) Also focusing on these basic definitions, Helmich and Brown (1972) defined outsiders as individuals beyond the predecessor’s “executive role constellation.” By using this definition, the authors recognized that an outside successor could come from inside the organization but not from the “in-group” or “dominant coalition” of the predecessor. According to the researchers, this definition more accurately reflected the degree to which a successor shared the core values of the firm and the degree to which a successor was familiar with the social and political processes of the CEO’s office.


In addition to challenging traditional definitions of insiders and outsiders, researchers also explored new dependent variables. Helmich and Brown (1972) and Helmich (1975a), for example, found that insiders were associated with fewer organizational changes (i.e., less personnel turnover and fewer formal positional changes) than their outside counterparts. Daum (1975), on the other hand, used group satisfaction as the dependent variable. The author found an inverse relationship when new leaders were promoted from within the group. Although some who worked in the area used more traditional measures of performance (e.g., return on investment, sales growth, profits), their results were quite mixed. Many researchers found a positive association between inside succession and performance (e.g., Shetty & Perry, 1976), while others found a negative association between these same variables (e.g., Lewin & Wolf, 1975). Still others found no relationship at all (e.g., Helmich, 1974b).

Although a majority of the successor origin work investigated consequences, some authors pursued two new avenues of research: (1) antecedents of origin; and (2) patterns. Among the antecedents explored were environmental context (Pfeffer & Leblebici, 1973), organizational age (Helmich, 1975b), and organizational size (Pfeffer & Salancik, 1977). In the case of environmental context, for example, Pfeffer and Leblebici (1973) found that in more competitive industries, executives tended to come from inside their firms and stay in the CEO’s office longer than in less competitive industries. Work in the second new area–succession patterns–was led by Helmich (1974a). According to the author, pure inside successions (I-I) were associated with less growth in performance (sales) than patterns involving outsiders (I-O, I-O, O-O). Although this was an important finding, an even greater contribution was the study’s methodology. This was among the first works to examine succession over a multi-year period.

Succession Frequency. Like their 1960s counterparts, researchers in the 1970s also explored rate of succession. Once again, the emphasis was on both the antecedents and consequences of succession frequency. Among the many antecedents to be examined were leadership characteristics (Helmich, 1974b; 1975b), changes in corporate structure such as merger activity (Helmich, 1978a), organizational size, age, and type (Crain, Denton & Tollison, 1976; Helmich, 1975b; Pfeffer & Salancik, 1977), and changes in organizational context and the external environment (Crain et al., 1976; Pfeffer & Salancik, 1978). In one study, for instance, Pfeffer and Salancik (1977) tested the relationship between organizational size and context and the frequency of succession. Their results showed no relationship for firm size; yet, some contextual factors (e.g., community relations and organizational type) were negatively associated while others (e.g., level of competition and affiliation) were positively associated. One year later, in their seminal work devoted to resource dependence, the authors pointed out that CEO selection and tenure were related to an organization’s need to respond to its environment. Moreover, succession frequency was regarded as the consequence of political processes within an organization. With each succession, the firm realigned power distributions and adjusted to resource demands. As such, succession reflected both a reaction to unexpected changes in the environment and an anticipation of future changes.

When exploring the consequences of succession, researchers focused predominately on the relationship between succession rate and subsequent performance (e.g., Eitzen & Yetman, 1972; McEachern, 1975; Allen, Panian & Lotz, 1979). Importantly, this is one of the few areas where results were clear and consistent–frequent successions were detrimental to firm performance.

Successor Characteristics. Although some effort had been made to investigate successor characteristics during the 1960s, the 1970s brought about a greater concentration of work in this area. Leadership style was perhaps the most common characteristic to be studied. Helmich and Brown (1972), for example, found that pre-succession performance influenced the criteria used to evaluate and choose successors. This conclusion suggested that successors with different leadership styles were selected to respond to different conditions. In the post-succession period too, Helmich and others (e.g., Koch, 1978) observed differences in leaders’ styles, with outsiders adopting a more task oriented style than insiders. Yet, despite the presence of consistent patterns immediately following succession, new leaders frequently changed styles in subsequent years. According to Helmich (1975b), two years after taking office, task oriented leaders became more employee centered and employee centered leaders became more task oriented. While it is difficult to know the exact reason for this shift, we can speculate that it was related to the consolidation of power by the new CEO (Helmich, 1975c).

Other works by Helmich (1975a; 1977a; 1977b; 1977c) linked the leadership style of successors to their need deficiencies (i.e., social, esteem, and autonomy). According to the author, need fulfillment was associated with leadership style, successor origin, and the degree of post-succession change (measured as staff turnover). Moreover, successors in large, mature organizations were more likely to experience need frustration, while successors in smaller firms tended to experience greater social relationship frustration (Helmich, 1977c). From this, Helmich concluded that successors in large firms were more likely to experience personal growth and career development than their counterparts in smaller, growing companies.

Helmich’s studies once again raised the issue of “fit.” Picking up this theme, Pfeffer and Salancik (1977), and Hall (1976) demonstrated that there was a relationship between specific characteristics of CEOs and the organizations they led. Hall (1976), for example, found that the level and type of education and the functional career paths CEOs pursued were associated with certain types of organizations. Thus, succession was most effective when it matched the needs of the organization with the background of the new leader. It is interesting to note, however, that March and March (1977) in their investigation of school superintendents, offered a counterpoint to this “matching” perspective. According to the authors, because of the commonality of general skills required at the top of organizations and the selection process by which managers move to the top, chief executives were often indistinguishable from one another and from the pool of possible replacements. The authors went on to suggest that chief executives may vary only on criteria that are irrelevant to selection.

Succession and the Board of Directors. A new area of investigation that emerged during the 1970s concerned the relationship between the board of directors and CEO succession. Within this area, two issues were of interest to researchers: (1) the relationship between board characteristics and succession; and (2) the board’s involvement in the succession decision. With regard to the first area, the characteristics most often explored were board size (Helmich, 1974b; 1976) and composition (i.e., insider versus outsider dominance) (Helmich, 1975c). With regard to the second area, the focus was on directors’ fulfillment of their roles and responsibilities. While there was general agreement that boards were responsible for determining when CEO succession was appropriate and then choosing suitable successors, not all researchers agreed that boards actually exercised their responsibilities (e.g., Mace, 1971). Some authors were quick to point out that in most cases directors served at the request of their CEOs. Indeed, only candidates approved by a CEO were elected, and once elected, directors owed their allegiance to that individual. As such, they were unlikely to call for the CEO’s dismissal. This hesitancy was particularly likely for inside directors, who in addition to their relationship to the CEO as chairman, also reported to him or her on a day-to-day basis. It was also noted that directors were often powerless in the board-CEO relationship because it was the CEO who controlled the board’s agenda and served as the key source of information for outside directors.

Clearly, the overarching theme of these early studies concerning the board’s role during succession was one of limited power and effectiveness. Directors were often regarded as “rubber stamps” in most corporate decisions including succession. Indeed, the literature of the time suggested that in the event of a disagreement between the board and its CEO, it was more likely for directors to resign than initiate CEO succession. This meant that boards were infrequently the cause or instigator of succession events.

It is not surprising that board-succession studies sparked an interest in general succession processes. Within this area, Gephart (1978) made two important contributions. First, the author employed a new methodology–ethnography–to report on the progress of succession from the perspective of a successor. Second, he introduced the idea that the nature of the predecessor’s departure was likely to influence both the succession process and the outcome of that process. The author identified five types of “exit”: (1) retirement; (2) voluntary resignation; (3) firing; (4) intraorganizational movement; and (5) death. These same categorizations are still used today.

Also focusing on process, Redlich (1977), and Greenblatt (1978) identified and described the stages of succession. While the number of stages ranged from 4 to 7, the nature of the stages was consistent across the two studies. Most notable among the transition periods was the successor’s initial appointment and inauguration, a honeymoon period, an adjustment and transition period, and what was termed a “new equilibrium.”

Summary. The 1970s was a period of expanding interest in succession research. Extending beyond the basic roots in sociology and administrative science, succession studies during this second phase reflected a wider variety of disciplines. This is perhaps best demonstrated in the sheer number and type of outlets. During the 1960s, for example, only a handful of empirical articles were published outside administrative science or sociological journals. By the 1970s, however, succession articles were published in more than 25 different journals, many of which were outside these primary disciplines. Indeed, by the end of the decade the Business Periodicals Index created a separate classification for articles related to “Managerial Succession.” This move was just one more indication of the steep trajectory of succession work.

PHASE III: Review and Explosive Growth

The 1980s ushered in a time of reflection for succession researchers. Three pieces in particular set about reviewing what had been done and projecting where the field was headed. The first, written by Gordon and Rosen (1981), summarized the literature and then suggested a model to guide future succession research. The authors’ model had two components: (1) pre-arrival factors; and (2) post-arrival factors. Pre-arrival factors included successor characteristics, the organization’s experience with succession in general, and the new leader’s mandate. Post-arrival factors included mutual observation processes, the successor’s actions and reactions, and power and influence sources. The authors then concluded by making a plea for “leadership succession research as a substitute for more traditional studies of leadership”.

Kohler and Strauss (1983) also provided a brief review of the succession literature. Although less positive about the area’s contributions than Gordon and Rosen, they did provide some interesting ideas about where researchers should focus in the future. Key among their suggestions was a need for better clarification of terms. They indicated, for example, that the starting and ending points for succession events were unclear, and that researchers may need to set different time boundaries depending on contextual factors. The authors also suggested that succession may not be a linear process. In other words, it may not move smoothly from one stage to the next. The authors ended by suggesting that “an important area for future research in executive succession, then, involves clarifying the nature of work capability necessary at higher organizational levels, and studying its relationship to various features and outcomes of succession”.

Finally, a third review by Brady and Helmich (1984) included both theoretical and practitioner reflections on succession. This review focused on three main topics: (1) succession rate and successor origin and tenure; (2) successors and organizational change; and (3) successor styles and needs. With regard to the first topic, the authors concluded that no consensus had been reached about why succession occurred at different rates or the impact of frequency on firm performance. Indeed, there appeared to be no definitive conclusions about successor tenure and its relation to other variables such as origin, performance, or predecessor tenure. At the same time, however, the authors felt that successor origin as a variable was effective in capturing “critical distinguishing characteristics that typify the prevailing profile of each category”. According to Brady and Helmich, research findings of this era supported the conclusion that “inside and outside CEO successors often bring different kinds of solutions as well as different kinds of problems to a company”.

This book also included a review of two dimensions of the relationship between successors and change. The first focused on the successor and his or her staff. According to the authors, outsiders were associated with more changes in their post-succession staffs than insiders. The significance of this finding, however, was tempered by the fact that there was little or no impact on subsequent firm performance. The second dimension highlighted the relationship between succession and organizational change. This research suggested that the impact of succession on subsequent organizational effectiveness was contingent on a number of factors such as: (1) how effectiveness was operationalized; (2) the size, age, and growth of the organization; (3) the involvement of its board; (4) the characteristics of the successor; and (5) the type of change mandated. Indeed, the authors offered two conflicting conclusions. First, that their work and that of others “…indicates that, on average, profitable firms are more often associated with outside successors”. Second, they concluded that “there is truly no substitute for an inside successor who rose to this position as a consequence of sound executive succession planning and careful grooming”.

Two categories of successor characteristics–leadership style and personal needs–were also reviewed by Brady and Helmich. Successor style, for example, was found to be complex and contingent on successor factors (e.g., age, gender, national origin, tenure) and organizational factors (e.g., age, size, board involvement). Moreover, it was concluded that firms often picked successors whose leadership styles fit the short term needs of the firm rather than the long term needs. Again, the conclusions were that successor need fulfillment affected leadership style and tenure, post-succession organizational change, and staff turnover. The match between need satisfaction and the CEO’s job, however, was found to be “fluid” and unpredictable.

In their book, Brady and Helmich concluded with a call for an expansion of succession work to include new variables and new methodologies, an outline of a succession planning process, and a reminder about the importance of the incumbent’s involvement in the succession process.

These three reviews offered succession researchers a summary of nearly twenty years of findings. Yet, this third phase of succession research did not stop here. Researchers extended work on past topics and introduced many new topics. Traditional themes such as succession origin and the relationship between firm performance and succession frequency continued to draw attention. Moreover, newer topics like succession processes and matching managers to firms were expanded, and still other topics were explored for the first time (e.g., market reaction to succession). The 1980s was also a time of more sophisticated methodologies and new theoretical perspectives.

Table 3 provides a brief overview of some of the major work throughout this period. It is clear from this chart that the number of succession pieces increased dramatically. Yet, despite this explosive growth, problems such as mixed findings and lack of comparability across studies continued.


Successor Origin. Successor origin remained a major variable in the studies of the 1980s and 1990s. Three dimensions of the relationship between firm performance and successor origin were investigated during this period. The first examined the association between pre-succession firm performance and origin. Using pre-succession performance as an antecedent, Dalton and Kesner found that small (1983) and average performing firms (1985) were more likely to experience outside succession. Conversely, Cannella and Lubatkin (1993) found that low-performing firms consistently experienced greater rates of outside succession.

A second group of researchers investigated the relationship between successor origin and post-succession firm performance. Again, the results were mixed. Reinganum (1985) found significant effects for outside successions in small firms. Similar positive effects for outside succession were found by Lubatkin, Chung, Rogers and Owens (1986), and Warner, Watts and Wruck (1988). On the other hand, Worrell and Davidson (1987) found positive market effects were associated with inside successions following the death of the incumbent. Furtado and Rozeff (1987) also found positive market effects for inside promotions and no significant effects for outside hires. Zajac (1990) concluded that insiders were associated with greater firm profitability than were outsiders. Finally, Beatty and Zajac (1987) concluded that both inside and outside successors were associated with negative market reactions.

A third group of researchers examined the relationship between origin and post-succession performance in light of pre-succession performance. Here, too, the results were mixed. Chung, Lubatkin, Rogers, and Owers (1987), and Lubatkin, Chung, Rogers, and Owers (1989) found that the market reacted positively to outside successors and that this reaction was amplified in firms with high pre-succession performance. According to the authors, however, origin either did not matter or was associated with negative effects for internal successions in low performing firms. Davidson, Worrell and Cheng (1990), on the other hand, found that inside successors were associated with increased stock prices, and pre-succession performance was insignificant for either insiders or outsiders. It should be noted that, even when significant, the market reactions were examined only in the short-term. Little is known about the long-term implications of inside versus outside succession.

Two additional studies examined the internal effects of CEO origin. Wiersema (1992) in a study of 146 companies found that outsiders were associated with more post-succession strategic change than insiders. Brady, Fulner and Helmich (1982) found that, once selected, inside and outside successors expected to spend (and actually did spend) about the same time in office.

Studies involving successor origin assumed that factors related to (if not completely captured by) the dichotomy between insider and outsider were important. Yet, little agreement was reached about what key dimensions were captured by these terms. Not even the definition of what constituted insiders and outsiders was consistent. Dalton and Kesner (1983; 1985) and Wiersema (1992), for example, defined outsiders as successors who were not with their firms while the predecessor held office. Others, perhaps following a suggestion by Vancil (1987), eased this definition to include CEOs who had been with their firms less the one year (Davidson et al., 1990), two or fewer years (Cannella & Lubatkin, 1993), and as many as four years (Lubatkin et al., 1989). In addition, Davidson et al. (1990) limited insiders to new CEOs who had been with their firms a minimum of six years. The lack of precision in measuring this variable stands in stark contrast to the growing sophistication in analytical methodologies and the increased size and variety of samples used. Importantly, these differences in the way key variables were measured may have contributed greatly to the mixed findings reported throughout the research.

Rate of Succession. Between 1980 and 1991, there were almost twenty studies that addressed the rate of succession. In instances where succession frequency was treated as the dependent variable, the findings were consistent–succession rates were higher in low performing firms than in high performing firms (Benston, 1985; Coughlan & Schmidt, 1985; Jauch et al., 1980; James & Soref, 1981; Morck, Schleifer & Vishny, 1988; Osborn, Jauch, Martin & Glueck, 1981; Warner et al., 1988). Similarly, studies which investigated internal factors related to succession frequency found that lower succession rates were associated with: (1) greater shared beliefs among organizational members (Pfeffer & Moore, 1980); (2) CEOs’ ownership positions (Salancik & Pfeffer, 1980); (3) the power of incumbent CEOs to control the process (Allen, 1981; Allen & Panian, 1982); (4) ownership changes (Jauch et al., 1980); and (5) firms’ financial strategies (Osborn et al., 1981).

In response to a call by Pfeffer and Salancik for studies examining environmental contingencies and succession rates, other researchers explored various external factors. The majority of these studies focused on the market for corporate control. Increased succession rates were found to be associated with takeover bids (Jauch et al., 1980), bankruptcy (Ang & Chua, 1981; Schwartz & Menon, 1985), block trades (Holderness & Sheehan, 1988), greenmail payments (Klein & Rosenfeld, 1988), acquisitions (Walsh, 1988), and proxy contests (DeAngelo & DeAngelo, 1989). From this stream of research it appeared that market mechanisms were associated with succession rates in organizations. Studies that investigated both actual market mechanisms for “disciplining” managers and the threat of such actions consistently demonstrated that failure to meet standards of performance were often associated with greater rates of succession. These market processes were attenuated, however, by the power of incumbent CEOs to control succession processes and resist being displaced. Thus, there was confirmation for earlier findings that succession was a political process (Zald, 1969), and there was support for more recent findings which suggested that social and political factors moderated the relationship between performance and the choice of successors (Cannella & Lubatkin, 1993; Welsh & Dehler, 1988; Fredrickson, Hambrick & Baumrin, 1988).

One critical break from earlier findings was revealed in a study by Miller (1993). Rather than the singular message that succession frequency hindered performance, Miller discovered that when CEO turnovers occurred infrequently, the fit between strategy and structure loosened and firm performance was adversely affected. Important, both for its conclusion and its departure from previous work, Miller’s study signalled a need for still more work in the area.

Succession Consequences. The structural and performance consequences of succession continued to command the attention of researchers throughout the 1980s and into the 1990s. A number of studies investigated the resulting change brought about by succession. Miller’s (1993) study is just one example. In his article, the author found that succession was related to organizational changes and breaks in momentum. Also exploring the issue of change, Kelly (1980) found that successors often worked on organizational infrastructure before tackling strategy. Friedman and Saul (1991) added that the degree of post-succession change was related to both pre-succession performance and the mandate of the successor to initiate change. Even so, an executive’s success in introducing change was a function of the successor’s ability to manage various stages of the process (Greiner & Bhambri, 1989). Furthermore, both the degree and type of change were found to be related to political activity within the firm (Welsh & Dehler, 1988).

In addition to using change as a dependent variable, succession researchers continued to use post-succession performance as well. Carroll (1984) examined performance in the extreme and found that rates of organizational failure increased following the succession of founders. Tushman, Virany, and Romanelli (1985), in a study of 396 minicomputer companies, Pfeffer and Davis-Blake (1986), in a study of professional basketball teams, and Zajac (1990), in a survey of 118 CEOs, all found that succession was not related to post-succession performance.

Beyond the studies which explored succession’s impact on performance and changes in strategy and structure, several studies addressed succession’s impact on organizational members. Members’ reactions to a new executive were described as falling between the extremes of two myths (Greenblatt, 1983). Some successors were viewed as saviors for their firms (the Messiah Myth). In other cases, however, the high regard for predecessors made it impossible for successors to measure up (the Rebecca Myth). Given this range of potential reactions, it has been suggested that executives may benefit more from research which focuses on mechanisms to smooth the transition (e.g., context, timing, and type) and enhance others’ perceptions (Hart, 1987; Louis, 1980).

As with other areas, these varied findings made it difficult to derive generalizations about the effects of succession on an organization’s members or on a firm’s strategy, structure and performance. While evidence has clearly suggested that change follows succession, the nature of this change appears to vary depending on successor characteristics and contextual factors. In some studies, post-succession change was related to the new CEO’s attempt to consolidate power. In other cases, change was related to the mandate adopted by the successor. In all cases, however, the acceptance of change seemed to be a function of members’ expectations versus reality.

Succession and Firm Performance: A Market Perspective. There are, of course, many possible reasons for the mixed results surrounding the succession-performance relationship. It may be that the results varied because of how performance was measured. According to some critics, when used as the dependent variable, performance was often operationalized in ways that were only loosely connected to the successor. It was not surprising, therefore, that leadership changes produced little impact on financial outcomes. Moreover, if as suggested by the ritual scapegoating theory, succession was used to signal change to external markets, traditional accounting measures were unlikely to capture this impact. In response, therefore, a number of researchers turned to the use of abnormal stock returns. These authors argued that, in general, abnormal returns were more appropriate because they offered an unbiased estimate of investors’ expectations, and they were more precise because they allowed the measurement of reaction to a specific organizational event.

From 1985 to 1990, more than a dozen published studies examined the relationship between CEO change and market reaction. The studies accomplished two important objectives. First, using a unique analytical procedure, they reexamined relationships that had been previously explored. Thus, there was a direct attempt to resolve some of the inconsistencies which plagued the area. Second, they introduced more finely grained variables and a new way of measuring performance. Yet, despite these admirable objectives, the results from this body of work remain inconclusive. Beatty and Zajac (1987), for example, reported a negative reaction by the market to CEO succession. In contrast, Davidson et al. (1990) reported a positive reaction, and still other studies reported no significant reaction (e.g., Reinganum, 1985; McGuire, Schneeweis & Naroff, 1988; Warner et al., 1988; Weisbach, 1988; Bonnier & Bruner, 1989; Friedman & Singh, 1989). Faced with the prospect of concluding that managers did not matter overall, these authors sought to identify a set of contingencies that accounted for the variance in post-succession performance.

Following suggestions in earlier works (e.g., Friedman & Singh, 1989), some researchers examined the relationship between post-succession performance and “initiating forces” (i.e., factors other than normal retirement). Several studies, for instance, investigated the market’s reaction to CEO death (e.g., Johnson, Magee, Nagarajan & Newman, 1985; Worrell, Davidson, Chandy & Garrison, 1986; Worrell & Davidson, 1987). The findings suggested that while in some cases there was an immediate negative reaction to the death of a CEO, there was little significant long-term reaction. Even so, there was variance in the level of market response depending on whether the CEO was a founder (Johnson et al., 1985) and/or chairperson (Worrell et al., 1986) and depending on the successor’s origin (Worrell & Davidson, 1987).

In contrast to situations of CEO death, board initiated successions produced more positive market reactions (Furtado & Rozeff, 1987; Friedman & Singh, 1989; Weisbach, 1989). This was especially true when pre-succession performance was poor and the board was dominated by outside directors. Apparently, board initiated changes at the top were seen as effective oversight and, therefore, a positive indicator of improved leadership in the future. Furtado and Rozeff (1987) also found that the market reacted positively to the promotion of insiders, but it did not react significantly to external hires by the board.

Exploring more thoroughly the relationship between performance before and after succession, researchers found different market reactions depending on whether pre-succession performance was high or low. Succession in low performing firms reflected the “vicious cycle” theory originally suggested by Grusky. High performing firms, on the other hand, obtained even better performance by making the risky choice of selecting outsiders (Lubatkin et al., 1986; 1989; Chung et al., 1987). While there were differences in post-succession performance depending on successor type, the overall finding of these studies was that pre-succession performance was an influential factor in predicting post-succession performance. Yet, outside of this very general conclusion, research offered little in the way of clear, systematic evidence about the market’s reaction to succession. Rather, these event studies merely confirmed that succession was an enigmatic and complicated event best understood with complex contingency models.

Succession Planning. One area that received greater attention during this third phase of research was succession planning. Perhaps because it was a logical offshoot of twenty years of investigation, a number of researchers began to consider the impact of both the degree of planning and the nature of the planning process. Based on a review of succession planning in 60 firms, Mahler (1980) was among the first to suggest the need to and advantages of improving succession planning. This conclusion was particularly important given the results of a study by Brady et al. (1982). Using survey data from 1484 corporate presidents, the authors observed that fewer than 50% of responding firms engaged in succession planning. Moreover, what little planning did occur often rested in the hands of the incumbent CEO (Vancil, 1987).

Following these studies were two works devoted to understanding the approaches and stages of succession planning. Rhodes and Walker (1984) found that firms often used a variety of planning approaches (e.g., informal, decentralized, centralized, integrated), while Hall (1986) focused on the evolution of planning (i.e., reaction to vacancies, replacement planning, and succession planning). These and other authors sought to outline important components of the process. Friedman (1990) and Hall (1986) emphasized the roles of learning and the development of management incumbents in preparation for succession. Gabarro (1988) pointed out the fact that succession plans must take into account pre-succession career development, the selection process itself, and post-succession transition management. Pattan (1986), Sheibar (1986) and Kesner (1989) integrated strategic human resource literature when they noted that successions should be planned to match managers with strategies, and plans should be specific when charting positional shifts and timing. Finally, Kets de Vries (1988) suggested that, despite good intentions and a succession plan, effective transitions could still be undermined at critical points in the process.

This focus on planning represented an important extension to the succession literature. After having accepted succession as an inevitable and dramatic event that shapes the future of firms, it seemed natural to recognize the importance of planning for this event. Even so, the focus of these studies was often prescriptive, and little work was done to test the implications of pre-succession planning on post-succession performance.

Dimensions of Succession Process. Related to the interest in planning, a number of researchers looked at the components of the succession process. Hashemi (1980), for example, focused on defining the duration of a typical succession period. The hospital executives used in his study generally reported that succession began when a position was offered, and the process generally lasted one year. Day and Lord (1988) suggested that effects of leadership change lagged the event rather than taking place immediately. Kelly (1980), Gilmore and McCann (1983), and Gabarro (1986) found that the succession process involved a series of stages. These researchers emphasized the post-succession process in which the successor took command of the office. After a honeymoon period of approximately six months, new executives often moved cautiously, securing their power prior to engaging in significant organizational changes. Importantly, this helped minimize disruption to their firms.

Friedman (1986), Lamb (1987), Vancil (1987), and Kerr and Jackofsky (1989) all provided insights into the structure and conduct of succession systems in organizations. Friedman (1986), for instance, acknowledged that all organizations had succession systems if they survived their founders. Yet, he indicated that the more successful organizations had systems that had high CEO involvement, allocated significant resources to formal human resource functions, and established accountability in support of their succession processes. Lamb (1987) noted that the succession process and its outcomes were influenced by the power of the predecessor to control the process, the firm’s performance at the time of succession, the firm’s past succession practices, ownership structure, and outside pressures at the time of the event. Adding to this line of research, Vancil (1987) reported that the succession process in organizations was related to the structure of the CEO’s office (e.g., solo, duo, team). The author also described two different types of processes–“horse race” and “relay.” The first pitted candidates against each other while the latter treated succession more as a grooming and management development process. Kerr and Jackofsky (1989) proposed that both selection and development processes were viable mechanisms for choosing new managers, while Wills (1992) suggested that the most successful systems focused on passing both power and learning to successors.

These studies of the succession process suggested that succession systems were optimal when they produced a “seamless” continuity in leadership. Ironically, while business leaders were espousing the need for firms to adapt their strategies and structures to rapidly changing environments, when it came to succession they believed that stability was better. Indeed, when compared to the attributes of the incumbent, the history of the job, and the characteristics of the firm, the environment seemed to play only a minor role in understanding succession processes.

Succession and Matching Managers to Strategies. Beginning in the 1980s, researchers began to reinforce the importance of “fit” by suggesting that executive transition was more effective if the characteristics of the successor matched the characteristics of the firm and its environment. Although primarily conceptual in nature, a number of studies implied that succession was more effective if new mangers were matched to the strategic needs of their organizations (e.g., Wissema, Van Der Pol & Messer, 1980; Leontiades, 1982; Gupta, 1984; Hambrick & Mason, 1984; Szilagyi & Schweiger, 1984). Perhaps in recognition that succession systems tended to maintain the status quo, these works suggested that a more proactive, future oriented goal may serve organizations better. Gupta and Govindarajan (1984) and Govindarajan (1989) in Studies of 121 and 58 managers respectively found that “matches” were associated with superior performance. They did not, however, find that these matches had been systematically planned. While theoretically compelling and consistent with the other theories of personnel selection and development, many of these studies stopped short of informing decision-makers about how to execute the matching process. Moreover, Gupta (1986) offered the unique suggestion that at times mismatching managers at various stages in their careers may actually enhance firm performance.

Succession and the Board. Finally, while some researchers continued to focus on issues of board size and composition (e.g., Helmich, 1980; Salancik & Pfeffer, 1980; Chaganti, Mahajan & Sharma, 1985), others adopted new ways of exploring the relationship between succession and boards. Puffer and Weintrope (1991), for instance, found that succession was more likely when the CEO did not meet the board’s performance expectations. Weisbach (1988), on the other hand, observed that only boards dominated by outsiders removed CEOs when performance was unsatisfactory. And, Boeker (1992) noted that the relationship between performance and dismissal was moderated by the ownership position of the CEO and the CEO’s influence on the board via his or her director appointments. Finally, Hermalin and Weisbach (1988) reinforced earlier findings concerning successor origin. According to the authors, when performance was unacceptable, boards replaced insiders with outsiders. While distinct in their coverage, these various studies confirmed what board researchers had acknowledged for years. In many firms, CEOs had the power and authority to offset the board’s oversight duties and thereby influence the succession process.

Summary. Succession research in the 1980s and early 1990s responded to the calls issued in the previous decades. Many studies revisited earlier topics such as origin, succession rate, successor characteristics, and the succession-performance link. Prior conclusions were retested using more powerful and varied sample populations and more precise research methodologies. In addition, new factors relating to the succession planning processes were investigated. Yet, despite this increased activity, results did not provide a clearer understanding of the hypothesized relationships nor a consistent model of antecedents, consequences, or contingencies.

Future Directions

Developing and testing theory is similar to putting together a jigsaw puzzle. Individual pieces of the puzzle are linked together, first in pairs, then in blocks. As more blocks are formed, the puzzle picture emerges. Finally, as the underlying picture takes form, remaining individual pieces are placed to complete the picture. Two factors make puzzles challenging yet doable. First, in most cases, builders are provided an initial picture of the finished puzzle. Second, there is a predetermined number of pieces, all of which fit the picture. In many ways, succession theory and testing is analogous to a puzzle. Yet, as this review suggests, there is no clear picture of the final project and the package contains some pieces that may not fit, while at the same time missing others that are needed. Naturally, this makes completing the puzzle difficult. What is needed is a clarification of the overall picture and an account of missing and/or extraneous pieces. These issues are explored as part of setting a future agenda for succession research.

Focusing on the Overall Succession Model

Three factors have blurred our understanding of the overall succession picture. First, while succession was pursued across a variety of scientific disciplines, no single, systematic picture emerged across these disciplines. Rather, each viewed succession from a unique vantage point. Sociologists, for example, were concerned with bureaucratization and the processes by which organizations adapted to their changing external environment. Social theorists focused on various types of leadership changes and how these changes related to organizational effectiveness. Sociological models of succession, therefore, predominately focused on change and the transfer of power at the organizational level of analysis.

In contrast, researchers in organizational behavior, human resource management, and industrial/organization psychology adopted a different viewpoint. Considered within the context of career transitions, succession research addressed concerns about stages of the process, ways of managing the process, and individuals’ methods of coping with the trauma of succession. As such, these behavioral models were focused on the individual level of analysis.

Finally, researchers in strategy treated succession as one aspect by which organizations aligned themselves within a competitive environment and arranged internal resources to maximize competitive advantage. Often the focus was on matching characteristics of the CEO with competitive needs of the organization and on identifying how different types of CEOs impacted where (corporate strategy) and how (business strategy) firms competed. In addition, strategy and finance researchers commonly looked at succession within the context of the market for corporate control. Succession was a means for the market to discipline inefficient and ineffective managers.

As this discussion suggests, researchers did not use a common picture to describe succession. It is not surprising, therefore, that other aspects of the research process also lacked consistency. Take, for example, the term “successful succession.” Some authors defined this term as the time when a vacancy was filled. Others defined success as a minimum of short-term organizational disruption. To still others, success was based on the market’s reaction. Another effect of our multi-disciplinary approach was the way research questions were asked. In some instances, succession was viewed as an independent variable through which other phenomenon, such as bureaucracy or the market for corporate control, were investigated. At other times, succession was the dependent variable, reflecting how factors such as pre-succession performance or predecessor departure influenced the process. Still others were content to study the contingency nature of succession’s role within the firm.

Importantly, we are not suggesting that having multiple disciplinary approaches has been ineffective or inappropriate. On the contrary, multiple perspectives are a helpful and necessary part of the evolution of any social research stream. What we are suggesting, however, is that it is time to step back, away from the individual pieces, and assess the whole picture. At this stage, research directed toward synthesis and clarification can help researchers on several fronts. First, it will help in calibrating and positioning the most important factors in the succession equation. Second, it will help isolate extraneous factors for potential elimination. And third, it will help focus attention on missing pieces–gaps in the picture that should be filled.

As a starting point for the above recommendations, we offer the model in Figure 1. Admittedly, the model is simplistic in its form; it is intended to be. At this stage we feel it is more important to be inclusive rather than exclusive, especially given the mixed results of succession studies. We also wish to acknowledge that this is but one possible model. We encourage others to challenge the view we put forward. We see such debate as a necessary and important stage in this research stream.

As suggested in Figure 1 there are at least four key components to the succession event: (1) antecedents; (2) the event itself; (3) consequences; and (4) contingencies. Yet, within each of these areas, relevant variables have received varying degrees of attention. Some have received extensive investigation, while others have been the subject of little or no work. At a minimum, therefore, this model offers insight into some of the identifiable gaps in the succession literature. Still another advantage of the model is that it allows us to identify some broad conclusions which characterize the succession literature to date. Among these conclusions are the following. First, succession is recognized as ubiquitous and important for organizational performance and even survival. This is especially true for smaller organizations that are in the process of moving from founder to professional management. Indeed, a majority of the research cited in Tables 1 through 3 suggests not only that leaders matter, but that who they are and how they come into power has important ramifications for their firms. Second, beyond its role as a consequence of succession, organizational performance is also an antecedent. As an antecedent, poor financial performance influences firms in a number of ways (e.g., frequency, successor origin). Third, succession is potentially disruptive to the internal functioning of the organization. Therefore, curbing these negative effects is an important goal of any succession process. Furthermore, we know that the level of disruption is affected by the size of the organization, its ownership structure, how and by whom the succession process is managed, and the ability of the successor to manage the post-succession transition. As these last two points suggest, factors which are both external (e.g., increased uncertainty) and internal (e.g., family or staff structure) to the organization can and do affect both the succession process and its outcomes. Fourth, our survey of existing work suggests that the succession process is calculated, systematic, and political.(3) Obviously, these are just a few examples of some very broad conclusions. As new, more refined models emerge, our conclusions should become more specific and more helpful in a prescriptive sense.

Filling In the Gaps

Although in the near term, researchers need to gain perspective on the overall picture of succession, we do not recommend abandoning the research approaches currently underway. Indeed, four interdependent tasks are necessary if we are to gain a fuller understanding of the puzzle. First, we must sort through the variables investigated so far in an effort to identify those which are still relevant and those which are not.

Second, we must fit the existing pieces together. Research to date has been unable to identified relationships between variables on a consistent basis. Also important at this stage is to avoid the temptation to force fit pieces together. In other words, we must find the best fit. In both these search efforts, we as researchers must be accepting of replication and experimentation. Too often research that accomplishes the former is dismissed as lacking uniqueness, and research that accomplishes the latter is criticized for ignoring past findings. Yet, at this stage of research, such criticisms may be counterproductive.

Third, we must continue to search for gaps in the puzzle. Are there variables which have not received our attention, but which are essential in developing a complete model of succession? Here again, researchers who investigate this question are often penalized for experimentation and failing to uncover significant relationships. We believe, however, that in many cases, failing to find significance (especially in relationships buoyed by theory or practice) can be as informative and interesting as the reverse.

Finally, we must communicate our recognition and understanding of the pieces to those who live the reality of succession. Practicing managers are interested in the results of our work. They are interested in both the overall picture and the pieces as they search for answers about how to improve the process. Therefore, we should proceed with an eye toward application and prescription.

Exploring New Methodologies

As with any scientific process, the clarification of the succession picture and the selection and fitting of the pieces requires a variety of methodologies. With notable exceptions (e.g., Hart, 1987; Friedman, 1990; Wills, 1992; Zajac, 1990), most succession research since the 1960s has relied on archival data sources and highly quantitative analysis techniques. While both the size and dimensions of the sample populations have enhanced the generalizability of results, the results themselves have not become clearer. This suggests that some of the questions necessary to understand the succession puzzle may be better handled using other approaches. More qualitative and longitudinal methods, for example, may improve our understanding of the phenomenon. Greater use of experimental and quasi-experimental designs (perhaps using role play and simulations) may also offer new insights. Researchers may even find it helpful to increase their use of case studies and survey research. These new approaches to succession may be especially well suited to answering key process questions and improving our knowledge about CEO succession as a whole.

It may also be important to become more precise in our operationalizations of succession constructs. Researchers focusing on successor origin, for instance, have begun to call for greater construct validity. Indeed, the trend in this area is to treat origin as a continuous variable rather than a categorical variable. Furthermore, the mixed results of the past suggest that this variable may not be a function of tenure within a firm, but it may capture another dimension such as industry origin. Similarly, we recommend reexamining how variables such as performance are operationalized. Newer studies have begun to explore the entire time period between succession events and across life cycle stages. These longitudinal approaches look quite promising, and work in the area should be continued.


In this study we presented a review of the literature and a preliminary model of the CEO succession process designed to integrate this literature. Our model represents a starting point, however. If anything, it is the proverbial “tip of the iceberg.” We urge researchers to forge ahead. Yet at the same time, we feel this future work should be directed toward three key areas. First, it should focus on identifying a basic model which uses a multi-disciplinary perspective. Second, researchers should continue their efforts to identify how the various succession variables fit together and where gaps in the literature exist. Finally, researchers should explore the possibility of new methodologies. Our point is that we have much work ahead of us on the succession agenda. Yet, we should not be afraid to step backwards or sideways in our pursuit. And, while there is likely to be a constant tension between these areas, gaining focus, retracing some of our past steps (often with new methods), and exploring uncharted territories are all necessary if we are to fully understanding the subject of CEO succession.


1. A fifth area of research focused on processes issues. Vance (1964) was one of the first researchers to explore this sub-area. His work focused on understanding the succession process and the board’s role in that process. Because the attention to this area remained modest until the 1970s and 1980s, however, this area is covered in a later section.

2. Importantly, however, in a study of 270 chief executive officers, Shetty and Perry (1976) found succession from outside the industry was quite rare (5.2%).

3. As suggested by March (1978), the term “calculated” refers to behavior which is consequential, connected to goals and future outcomes, and controlled by intention. “Systematic” suggests that the behavior reflects historic rules which have evolved and accumulated over time within the organization and of which the succession participants may not be totally aware. And, “political” implies that the behavior is the result of self-interested but interdependent individuals and groups using power to influence the organization to further their own interests.


Allen, M. P. (1981). Managerial power and tenure in the large corporation. Social Forces, 60: 484-494.

Allen, M. P. & Panian, S. K. (1982). Power, performance, and succession in the large corporation. Administrative Science Quarterly, 27: 538-547.

Allen, M. P., Panian, S. K. & Lotz, R. E. (1979). Managerial succession and organizational performance: A recalcitrant problem revisited. Administrative Science Quarterly, 24: 167-180.

Ang, J. & Chua, J. (1981). Corporate bankruptcy and job losses among top level managers. Financial Management, (Winter): 70-74.

Beatty, R. P. & Zajac, E. J. (1987). CEO change and firm performance in large corporations: Succession effects and manager shifts. Strategic Management Journal, 8: 305-317.

COPYRIGHT 1994 JAI Press, Inc.

COPYRIGHT 2004 Gale Group

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