Some Practical Aspects of a Merger

Toward a Stakeholder View of Upper Echelons: A Framework Synthesis Review and Future Research Agenda

“…Specifically, the responsibility for running organizations has long been seen as a shared activity (Cyert & March, 1963;Hambrick & Mason, 1984), and as noted earlier, evidence suggests that stakeholders (a) evaluate and react to the characteristics of executives in the TMT and on the board of directors individually and collectively (e.g., Adams et al, 2015;Jeong & Harrison, 2017) and (b) use various means and expend considerable effort to gather insights on characteristics that are more difficult to observe (e.g., Fuld, 2014;Hill et al, 2019). Future research can advance the stakeholder view of upper echelons by delving into the mechanisms by which characteristics of executives and groups therein affect stakeholder evaluations, such as uncovering the types of attention systems held by stakeholder groups, the means used to gain insight into less observable characteristics, and the resulting evaluations.…”

“…Given stakeholders' limited capacity for attention, there are limits to the referent organizational information that stakeholders pay attention to as an input to their own strategic choices, although evidence suggests that referent organizations' executives and those executives' characteristics are a particularly vital input (Fuld, 2014;Hill et al, 2019). Specifically, evidence suggests that stakeholders pay attention to the characteristics of executives in TMTs and boards of directors, individually (e.g., CEOs or board chairs) and collectively (e.g., TMT, board committee), meaning that the characteristics of executives and groups therein serve as inputs for stakeholders' evaluations and reactions (e.g., Adams, de Haan, Terjesen, & van Ees, Heider, 1958;Kelley, 1973).…”

“…2015; Jeong & Harrison, 2017). At the same time, certain characteristics of executives are more overtly visible, such as demography (e.g., gender and race); yet, interviews, biographical accounts, and empirical evidence suggest that stakeholders are actively paying attention to executives in organizations with which they have a stakeholder relationship, "assessing their strengths, weaknesses, and predilections" using various means and going to great lengths, some of which may not even be legal, to gain insight into their less observable characteristics (Fuld, 2014; see also Hill et al, 2019). Thus, building on extant theory and evidence, the stakeholder view of upper echelons starts from a notion that stakeholders evaluate executives and their myriad characteristics in organizations with which they have a stakeholder relationship (starting in the upper left-hand corner of Figure 1).…”

“…For example, studies show that when choosing a new CEO, the board of directors pays close attention to executive characteristics, such as prior CEO experience or hubris, which provide insight that the CEO may have the confidence and ability necessary to turn the organization around (e.g., Gomulya & Boeker, 2014;Hill, Recendes, & Yang, 2023). Direct competitors are likewise highly motivated to gain competitive insights by paying attention to the organization's executives and their characteristics (Fuld, 2014;Hill et al, 2019).…”

“…Another key aspect of the organization-stakeholder relationship that can influence which referent organization executive characteristics receive attention is the collaborative-adversarial nature of the relationship. Whereas stakeholders with an adversarial relationship likely look for characteristics offering insight into the strength or weakness of the adversary and related decision-making biases that may be taken advantage of, stakeholders with a more collaborative relationship will likely look for characteristics befitting a good or bad partner (e.g., Fuld, 2014;Miller & Wesley, 2010;Wesley, Kong, Lubojacky, Saxton, & Saxton, 2022).…”