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Strategic management as cultivation and as compilation: The influence of firm development activity on top managers' turnover

Subject

Strategy and Entrepreneurship

Publishing details

Strategic and International Management Working Paper

Authors / Editors

Vermeulen F;Barkema H

Biographies

Publication Year

2002

Abstract

An increasing body of literature suggests that the personal characteristics of top managers influence the strategic development of the firms they head. In this paper, we wish to add a new perspective to this literature, and argue that the development path of a firm will also shape the manager. Involvement in strategic activities geared towards the internal development of the firm makes managers build up commitment and emotional investment in the organization. In contrast, managers who spend a lot of time buying and selling off businesses will build up little social capital within the firm. We apply this perspective to examine the influence of firm development activity on top managers' turnover, using event history analysis on the tenure of 437 top managers. The results show that internal reorganizations, as well as organic expansion decrease the likelihood that top managers will exit, irrespective of the firm's performance. Engaging in divestitures, as well as engaging in acquisitions increases the probability that a top manager will leave the firm. Overall, the results help paint a more complete picture of the relationship between top management and firm strategy.

Publication Notes

Record hidden from view as requested by faculty, March 2019

Series Number

SIM16

Series

Strategic and International Management Working Paper

Available on ECCH

No


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