CEOs' experience and career success in Latin American firms

Abstract

PurposeThis study investigates the influence of experience – organisational tenure, international experience and springboard role – upon Chief Executive Officers’ (CEOs) time to the top and the time taken by CEOs to reach that position. As work and careers are embedded in economic and institutional environments, although prior Western career studies have explored this relationship, this study aims to determine the suitability of experience as a human capital attribute to explain CEO career success in Latin American firms.Design/methodology/approach169 Latin American firms were considered (America Economia, 2014). Biographical data about CEOs were manually collected and systematically crosschecked, and multiple hierarchical regressions were employed.FindingsOrganisational tenure and lifetime experience were found to reduce the time to the top. International experience delays the time to the top. International assignments closer to HQ do not exert an influence on time to the top. In multilatinas, promoted CEOs who have held Corporate springboard roles get faster to the top than those having held Divisional positions. Findings offer partial support to the human capital theory experience in Latin America, stressing the relevance of cultural, socio-economic and institutional factors.Practical implicationsThe identification of career success predictors may enhance the career decision-making processes of individuals and organisations.Originality/valueThis study contributes to human capital and career literature, being the first one to explore the relationship between experience and time to the top in CEOs working for Latin American firms.

Top managers' career variety and time to the top

“…We claim that time to the top is not necessarily equal to reaching the CEO position, but it is equal to reaching a management board position. With this approach, we extend previous studies focusing on the time it takes to become CEO (e.g., Blanco & Sastre Castillo, 2020;Georgakakis et al, 2016;Hamori & Kakarika, 2009;Rovelli & Curnis, 2020;Salvato et al, 2012). By considering the number of industries, employers, functions and countries, we offer a comprehensive perspective on career variety as a predictor of the time it takes to reach the top.…”

“…However, while human capital theory makes us assume that more career variety accelerates the ascent to the top, we know from previous studies that we reviewed above that this is not necessarily the case: for instance, employer variety as well as industry variety can be detrimental for social capital (Blanco & Sastre Castillo, 2020;Hamori & Kakarika, 2009). In addition, spending parts of the career in other countries increases country variety, but may isolate a potential C-suite candidate from power networks and the elite circles in the home country (Schmid & Wurster, 2017).…”

“…While existing studies already considered the links between the number of employers (Hamori & Kakarika, 2009), or the breadth of international work experience (Georgakakis et al, 2016;Hamori & Koyuncu, 2011;Schmid & Wurster, 2017) and top managers' career advancement, other dimensions of career variety, such as industry variety, have been neglected. This seems somewhat surprising, especially given the need to understand better careers of those who reach firms' top ranks and to explain how career variety influences the speed at which managers reach those top ranks (Blanco & Sastre Castillo, 2020;Koyuncu et al, 2017). In light of the important role that top managers and their careers have for firms, their strategies, success and failure (Gunz & Jalland, 1996;Liu et al, 2018; see, with a critical note, Fitza, 2014Fitza, , 2017, more insights into the career paths of top managers who make it to the C-suite are highly warranted.…”

Family firm CEOs: human capital and career success

“…Despite the fact that CEOs nowadays spend less time within one company than their colleagues did several decades ago, a greater proportion of their careers still takes place in the same firm (Koch et al , 2017). In Latin American companies, having spent one's entire professional career in a single firm -lifetime CEO- and having spent a larger fraction of the career in a firm have been found to reduce CEO time to the top (Blanco and Sastre Castillo, 2020).…”

“…While Hamori and Koyuncu (2011) and Georgakakis et al (2016) showed that CEOs with higher educational qualifications, in Europe and the United States, climbed the corporate ladder more quickly, Koch et al (2017) found that the time to the top of 100 Fortune CEOs, in the United States, who held a graduate degree did not differ significantly from those who lacked such credentials. In turn, with regard to experience, Hamori and Kakarika (2009) as well as Blanco and Sastre Castillo (2020), having examined respectively CEOs' careers in Europe and the United States, and in Latin America, found that executives who had spent a smaller fraction of their careers in their current organization or who had changed employers more often, had taken longer to reach the CEO post. Indeed, having spent one's entire professional career in a single company – lifetime CEO – was found to reduce the time to the top in Latin America.…”