مقاله سال ۲۰۱۷

Do powerful CEOs influence corporate strategies and organizational performance? If so, in what ways? Are powerful CEOs attracted to risky and novel corporate strategies? Alternatively, do they instead prefer more measured and conservative actions? These questions continue to attract both scholarly and practitioner attention. The popular business press is ripe with discussions on powerful CEOs and their daring corporate actions (Helft, 2014). Corporate governance researchers have examined this issue under the broader “executive effects” literature using the upper echelons research tradition (Crossland, Zyung, Hiller, & Hambrick, 2014). More specifically, scholarly discussion on this topic has empirically examined the link between CEO power and organizational performance (Adams, Almeida, & Ferreira, 2005; Lee, Park, & Park, 2015; Tang, Crossan, & Rowe, 2011). Recent studies have also identified a significant relationship between CEO power and the choice of various corporate strategies such as mergers and acquisitions (Brown & Sarma, 2007; Chikh & Filbien, 2011). So far, growing empirical evidence of the influence of CEO power on both the choice of corporate strategies and organizational performance exists (Tang et al., 2011).

Despite the mounting evidence on the effect of powerful CEOs on organizational decision-making and performance, their role in shaping the firm’s innovation agenda is less clear. While current scholarly work has shown a significant link between powerful CEOs and the choice of certain corporate strategies, neither the corporate governance nor the organizational innovation literatures specifically outline whether and how powerful CEOs influence organizational innovation activities. Exploring the role of CEO power on organizational innovation is important for several reasons: first, CEOs hold a prominent structural position in the upper echelons and play a critical role in shaping strategic decisions (Crossland et al., 2014). Second, while other top management team members and board of directors are also involved in strategic decision-making, CEOs are expected to maintain an active and aggressive role in strategy formulation. CEOs are often expected by key stakeholders to be the principal architects of the firm’s innovation agenda (Berger, Dutta, Raffel, & Samuels, 2016). The purpose of this study is to explore the link between CEO power and the choice of organizational innovation strategies. Specifically, the relationship between CEO power and two types of organizational innovation strategies (exploratory and exploitative innovation) is empirically investigated (Mueller, Rosenbusch, & Bausch, 2013). Drawing from core arguments of Behavioral Agency Theory (Wiseman & Gomez-Mejia, 1998; Pepper & Gore, 2015), the differential impacts of powerful CEOs on organizational innovation activity is developed and empirically tested to extend the theory’s key tenets to innovation research with an emphasis on risktaking tendencies that surround innovation strategies. The current research proposes that firms led by powerful CEOs are more likely to pursue exploratory as opposed to exploitative innovations. Furthermore, this study argues that the link between CEO power and organizational innovation strategies is significantly strengthened when the CEO was recruited from outsider of the firm.

This study makes a number of contributions to the on-going scholarly research on the role of strategic leadership and firm innovation. First, this study improves scholarly understanding of the role these key leaders play in shaping the firm’s innovation agenda. Surprisingly, relatively little is known on how powerful CEOs impact organizational innovation (Berger et al., 2016). Second, this study contributes to research on strategic leadership and executive succession by highlighting the important role of CEO outsider/insider status in shaping the choice of organizational innovation strategies. Specifically, drawing from insights from behavioral agency theory and strategic leadership literature, the current study explores how the risk-taking tendencies of outsider CEOs might influence the choice of organizational innovation strategies. In doing so, this research extends the current work in corporate governance (Karaevli, 2007) and human capital transfer (Hamori & Koyuncu, 2015) literatures by exploring the implications of executive succession on organizational innovation. Additionally, this work provides practical insights on how the executive succession and selection process might be considered in developing the firm’s innovation agenda. In the following section, the major findings on CEO power and organizational outcomes as well as executive determinants of organizational innovation are reviewed.