Power and Managerial Dismissal: Scapegoating at the Top

Boeker, Warren

doi:10.2307/2393450

Cited by 547 publications

(406 citation statements)

References 29 publications

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“…This is supported by the findings in large-company succession studies, which consistently show that the rate of succession is much lower when the CEO's company is performing well or is meeting board expectations than when firm performance is low or falls short of board expectations (Grusky 1963, Allen et al 1979, Jensen 1986, Puffer and Weintrop 1991, Boecker 1992, Cannella and Lubatkin 1993, Useem 1993. Therefore, I pose the following hypothesis:…”

Section: Shipping the First Productmentioning

confidence: 72%

Founder-CEO Succession and the Paradox of Entrepreneurial Success

Wasserman

2003

Organization Science

404

140

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In the last few decades, we have developed a substantial body of knowledge about CEO succession. However, except for some studies of family businesses that lack direct applicability to nonfamily CEO succession, the past studies of succession have not examined the very first succession event in a firm, when the Founder-CEO is replaced, on a largescale basis. The critical differences between later-stage succession and Founder-CEO succession include the higher level of attachment between Founder-CEOs and the firms they create, the much larger equity holdings of Founder-CEOs (which give them much more control of the firm), the fact that many Founder-CEOs remain in the firm (even though it is being run by their successors), and the fact that nearly all earlystage succession events involve outside successors (in contrast to later-stage succession research, which has focused on the insider-outsider distinction). These differences make it hard to extrapolate from later-stage succession findings to Founder-CEO succession. Therefore, in order to examine Founder-CEO succession, I used field research and grounded theory building to study the factors that should affect Founder-CEO succession in Internet start-ups. I find that there are two central intertemporal events that may affect Founder-CEO succession: The completion of product development and the raising of each round of financing from outside investors. I develop testable hypotheses about how each of these events affect the rate of succession, and then test these hypotheses using an eventhistory analysis of a unique dataset containing the succession histories of 202 Internet firms. My findings point to multiple "paradoxes of success" in which the Founder-CEO's success at achieving critical milestones actually causes the chance of Founder-CEO succession to rise dramatically.

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Section: Shipping the First Productmentioning

confidence: 72%

Founder-CEO Succession and the Paradox of Entrepreneurial Success

Wasserman

2003

Organization Science

404

140

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“…For example, top executives gain power over the board so the board conforms to the executives' self-serving request of high pay (Bebchuk & Fried, 2009). Also, executives are aware that they can be made scapegoats when performance declines even when such decline is beyond their control (Boeker, 1992;Wiersema & Bantel, 2006). Requesting a high compensation package is as if buying insurance for situations when they can be blamed for bad luck.…”

Section: Luck As Counterfactualmentioning

confidence: 99%

“…The implication is that failed executives should not necessarily get fired because they may just be in the wrong place at the wrong time. However, many executives who experience extreme failures are fired and treated as scapegoats (Boeker, 1992;Wiersema & Bantel, 2006).…”

Section: Crick and Watson's Discovery Of The 'Double Helix' Structurementioning

confidence: 99%

Good Night, and Good Luck: Perspectives on Luck in Management Scholarship

Liu

Rond

2016

The Academy of Management Annals

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It is not insignificant that seminal contributions to management scholarship have highlighted luck as an alternative explanation for performance differences between individuals and organizations. Yet it has rarely taken center-stage in scholarship. The principal purpose of this paper is to provide a systematic review of the application of luck in the management literature and in such foundation disciplines as economics, sociology, and psychology. Our analysis finds five common perspectives on luck: (a) luck as Attribution; (b) luck as Randomness; (c) luck as Counterfactual; (d) luck as Undeserved; and (e) luck as Serendipity. We outline various ways in which research on luck may be advanced along each of these perspectives, and develop an underexplored, sixth, perspective on (f) 'luck as Leveler' to provide a possible solution to such issues as social inequality and (unwarranted) executive compensation.

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“…The outcomes we study-changes in domain, leadership, and performance-are embedded in a complex system of relationships. Good performance solidifies incumbent executives' positions (Harrison et al 1988, Boeker 1992. Regulatory punctuations degrade performance and prompt CEO succession (Singh et al 1991), whether for technical reasons (Grusky 1963) or because of ritual scapegoating (Gamson and Scotch 1964).…”

Section: Model Specification and Estimationmentioning

confidence: 99%

Organizational Environments in Flux: The Impact of Regulatory Punctuations on Organizational Domains, CEO Succession, and Performance

Haveman

Russo

Meyer

2001

Organization Science

182

126

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A central debate in organizational theory concerns how organizations evolve. There are two diametrically opposing viewpoints. Adaptation theories predict that change occurs as fluid organizations adjust to meet shifting environmental demands, while selection theories predict that change occurs through the differential selection and replacement of inert organizations as environmental demands vary over time. Our paper bridges these polar opposites by using a punctuated equilibrium framework to examine organizations' responses to discontinuous industrylevel change. This framework recognizes that the histories of many industries are occasionally punctuated by dramatic exogenous shocks, such as radical technological innovation, social and political turmoil, major changes in government regulation, and economic crashes. Our central thesis is that such environmental punctuations dramatically reduce pressures and rewards for organizational inertia and thereby alter both organizations' propensities for change and their survival chances following change.We focus on one form of punctuation, major regulatory change, and study firms in two industries: general hospitals and savings and loan associations. For organizations in both industries, we examine three important outcomes: shifts in organizational domain, CEO succession, and changes in financial performance. Our analyses show that punctuational regulatory change prompts shifts in organizational domains and executive leadership. Additionally, post-punctuation domain change and post-punctuation CEO succession both affect subsequent performance. We discuss our results in light of current thinking about the content and process effects of core organizational change, which has been developed in the context of stable environments. Finally, we argue for the development of more temporally sensitive theories of organizational action. (Organizational Evolution; Punctuated Equilibrium; Deregulation; Organizational Change; Organizational Inertia; Organizational Performance; CEO Succession) Change in the core attributes of organizations is difficult and fraught with peril. Organizational ecologists have proposed that when organizations change, resources are diverted from operating to reorganizing, which reduces efficiency and survival chances (Hannan andFreeman 1984, 1989;Amburgey et al. 1993; Barnett and Carroll 1995). These process effects of core change-the costs associated with redirecting resources from operations to reorganization, learning new routines, and building new relations with exchange partners-are expected to be negative. In contrast, the content effects of core change-the impact of adjusting to fit environmental demands-may be positive or negative, depending on the luck and skill of organizational decision makers and implementers. Considering process and content effects together, core organizational change is likely to impair performance and may even lead to failure.Despite the inherent riskiness of core organizational change, it is sometimes necessary and...

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Power and Managerial Dismissal: Scapegoating at the Top

Cited by 547 publications

References 29 publications

Founder-CEO Succession and the Paradox of Entrepreneurial Success

Founder-CEO Succession and the Paradox of Entrepreneurial Success

Good Night, and Good Luck: Perspectives on Luck in Management Scholarship

Organizational Environments in Flux: The Impact of Regulatory Punctuations on Organizational Domains, CEO Succession, and Performance

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