Exploring the Influence of CEO Extraversion and Openness to Experience on Firm Performance

Araujo-Cabrera, Yazmina; Suárez-Acosta, Miguel A.; Aguiar-Quintana, Teresa

doi:10.1177/1548051816655991

Cited by 38 publications

(35 citation statements)

References 98 publications

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“…Extraversion refers to a person's tendency to be sociable, gregarious, assertive, talkative, and active (e.g., Abatecola, Mandarelli, and Poggesi ). Extraverted leaders tend to have a preference for a high level of interaction, sharing key information, and focusing on generating solutions (Araujo‐Cabrera, Suarez‐Acosta, and Aguiar‐Quintana ; Barrick and Mount ; Judge, Heller, and Mount ). Moreover, they have been found to strive to influence others and to show their status and power (Barrick, Mount, and Judge ).…”

Section: Theoretical Backgroundmentioning

confidence: 99%

CEO Characteristics and Budgeting Practices in Emerging Market SMEs*

Zor

Linder

Endenich³

2019

Journal of Small Business Management

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Small and medium‐sized enterprises (SMEs) play an important role in the gross national product and employment in most emerging markets. However, little is known about their budgeting practices and, in particular, about the role of CEO characteristics for the adoption and extent of budget use. Drawing on a broad sample of manufacturing firms from Turkey, we shed light on the role of CEO characteristics for the adoption and extent of use of formal budgets. Our results suggest that apart from age and education, the CEO's openness to experience is an important factor for understanding budgeting practices in SMEs.

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Section: Theoretical Backgroundmentioning

confidence: 99%

CEO Characteristics and Budgeting Practices in Emerging Market SMEs*

Zor

Linder

Endenich³

2019

Journal of Small Business Management

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“…Gow, Kaplan, Larcker and Zakolyukina (2015) even find a negative impact of extraversion on firm performance. However, other studies suggest performance benefits from an extraverted CEO via higher strategic flexibility or better management team integration (Nadkarni and Herrmann, 2010;Araujo-Cabrera, Suarez-Acosta and Aguiar-Quintana, 2017). It has also been shown that extraverted CEOs are more likely to succeed in acquisitions (Malhotra, Reus, Zhu and Roelofson, 2018).…”

Section: Extraversion As a Ceo Stereotypementioning

confidence: 99%

The Effect of CEO Extraversion on Analyst Forecasts: Stereotypes and Similarity Bias

Becker

Medjedovic

Merkle

2019

The Financial Review

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In an experiment with professional analysts, we study their reliance on CEO personality information when producing financial forecasts. Drawing on social cognition research, we suggest analysts apply a stereotyping heuristic, believing that extraverted CEOs are more successful. The between‐subjects results with CEO extraversion as treatment variable confirm that analysts issue more favorable forecasts (earnings per share, long‐term earnings growth, and target price) for firms led by extraverted CEOs. Increased forecast uncertainty leads to even stronger stereotyping. Additionally, personality similarity between analysts and CEOs has a large effect on financial forecasts. Analysts issue more positive forecasts for CEOs similar to themselves.

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“…However, the vast majority of this research on the importance of extraversion for leadership has been conducted at lower levels of the organization (e.g. Araujo‐Cabrera, Suarez‐Acosta and Aguiar‐Quintana, 2017; Wang et al ., 2016), with limited research focusing on the importance of extraversion for leaders at the upper echelons.…”

Section: Introductionmentioning

confidence: 99%

What is (s)he Worth? Exploring Mechanisms and Boundary Conditions of the Relationship Between CEO Extraversion and Pay

Malhotra

Shen

Zhu

2020

British J of Management

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Integrating human capital theories and the status incongruity hypothesis at the upper echelons, we examine for whom extraversion, the personality trait that has been most strongly and consistently implicated in leader success, influences Chief Executive Officer (CEO) pay. To assess the personality traits of CEOs, we used a computerized text analysis approach on the language spoken by CEOs in conference calls. Using a sample of firms listed on the S&P 1500, we find that more extraverted CEOs earned higher pay, indicating that this was a trait valued by boards. Additionally, this relationship was due to enhanced firm performance; specifically, market performance. However, a critical boundary condition is that the relationship between CEO extraversion and pay was weaker for female (vs. male) CEOs, despite the market responding equally positively to extraverted female and male CEOs. Thus, the monetary benefits of higher levels of extraversion did not extend to female CEOs and likely reflects backlash. Supplemental analyses revealed that this devaluation of more extraverted female (vs. male) CEOs was mitigated when the CEO was also the chairperson of the board (i.e., CEO duality) or under conditions of greater female representation on the board of directors.

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Exploring the Influence of CEO Extraversion and Openness to Experience on Firm Performance

Cited by 38 publications

References 98 publications

CEO Characteristics and Budgeting Practices in Emerging Market SMEs*

CEO Characteristics and Budgeting Practices in Emerging Market SMEs*

The Effect of CEO Extraversion on Analyst Forecasts: Stereotypes and Similarity Bias

What is (s)he Worth? Exploring Mechanisms and Boundary Conditions of the Relationship Between CEO Extraversion and Pay

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