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The literature on chief executive officer (CEO) succession has focused mostly on the effects of changes in leadership on organizational performance (Allen, Panian, & Lotz, 1979: Brown, 1982; Carroll, 1984; Tushman, Virany, & Romanelli, 1990) and even stock prices (Beatty & Zajac, 1987; Reinganum, 1985). But little is known about the impact that succession might have on organizations themselves: on the changes that occur in structure and decision-making processes. This research revisits the longitudinal data base of Miller and Friesen (1980b, 1984) to look into the question of just what it is that new CEOs do differently from their predecessors.
SCOPE AND VARIABLES
The study examined what happened after leadership changed in 36 mostly large, mostly U.S. corporations, each tracked using 20 years or more of secondary archival data. Miller and Friesen (1980b) examined 17 organizational variables, all drawn from a synthesis of the relevant literature, that group naturally into six basic dimensions of structure and process. The dimensions were intended to provide a rich description of organizational evolution. And, of particular importance here, changes in leadership were expected to have a major impact on most of those dimensions.
The structural dimensions include intelligence systems, such as controls and internal communication networks; structural complexity, which encompasses interunit differentiation and the use of technocrats; and concentration of power for making strategic and routine decisions. These three dimensions are respectively akin to the uncertainty reduction, differentiation, and structural integration components of Khandwalla's (1973, 1977) model of organizational adaptation. They are also very prominent in integrative reviews of the literature by Jackson and Morgan (1982), Mintzberg (1979), and Van de Ven (1976).
The dimensions of decision-making process include competitive aggressiveness, that is, risk taking, "proactiveness," innovativeness, and adaptiveness; intended rationality: the use of environmental scanning, analysis, long planning horizons, and multiplex perspectives in decision making; and integration: the codification of and complementarity among elements of strategy, and the presence of unifying traditions. These dimensions were respectively suggested by Mintzberg's (1973) entrepreneurial, planning, and adaptive modes of strategy making. Again, much prior research has dwelled on these dimensions (see the reviews by Fredrickson 1986! and Hart 1992!).
New leaders were expected to differ from their established predecessors along four of the above dimensions: they would disperse power more broadly,...