The role of chief executive tenure for public organizations' hiring of management consultants

Abstract

Public organizations increasingly rely on management consultants to access expertise, impose reforms, and drive organizational change, and spend large sums each year on their services. Despite this, we know little about the antecedents of public organizations' use of management consulting services. Drawing on upper echelon theory, a longitudinal hypothesis‐testing study of the hiring of management consultants in 72 Swedish public organizations, and interviews with Swedish chief executives (CEs), we find an inverted U‐shaped relationship between CE tenure and public organizations' use of management consulting services. We also find that this relationship is moderated by CEs' previous experience and managerial discretion. These findings contribute to theorizing on the use of management consulting services and the influence of CEs in public organizations.

Good corporate governance and corporate sustainability performance in Indonesia: A triple bottom line approach

“…As proposed by Elkington and Rowlands (1999), corporate sustainability is operationalized through the concept of the triple bottom line (TBL) consisting of economic, social and environmental factors. Markley and Davis (2007) and Pemer et al (2020) have also proved that companies focusing on TBL have increased their competitive advantage. Thus, sustainability theory underlies the crucial roles of BoC and TMT in implementing GCG that can balance economic, social and environmental activities to achieve CSP.…”

“…The concept of sustainability is currently growing and applied in the context of corporate sustainability. Artiach et al (2010) and Pemer et al (2020) both stated that businesses and investment will improve through balancing the needs of current and future stakeholders. As proposed by Elkington and Rowlands (1999), corporate sustainability is operationalized through the concept of the triple bottom line (TBL) consisting of economic, social and environmental factors.…”

“…In upper echelons theory, Hambrick and Mason (1984) explained that company performance is judged by the decision making of the company's top executives. Several of the previous studies have used the characteristics of the top executives such as age, ethnicity, experience, education and functional background as proxies to be observed (Pemer et al, 2020;Petrovsky et al, 2015). Proxies in the form of individual psychology form the perspective of the top executives when interpreting social, economic and environmental problems and responding to how top executives deal with these problems (Petrovsky et al, 2015;Strand, 2014).…”

The management consultancy effect: Demand inflation and its consequences in the sourcing of external knowledge

“…Of all the control variables employed in the regression model, only size appeared to have a marked effect on expenditure, with larger trusts more likely to engage with MCs. Following Pemer et al (2020), we also looked at whether Chief Executive Officer tenure had any effect on the use of MC services, but the results were not significant. As such, our analysis confirms H1 and the assumption that the use of MC services will be subject to demand inflation.…”

Consultancies in public administration

“…Other scholars have noted cases where public servants feel that consultancies provide their proposals and work with gravitas useful for impression management (Clark & Salaman, 1998; Saint‐Martin, 2004). In Sweden, for example, chief executives in public organizations are now more likely to rely on consultants than their junior colleagues to push through policies (Pemer et al, 2020). Evidence also suggests that for some national public administrations, the selection of consultancies is strongly informed by personal ties and price markers, with little concern about operational differences among consultancies (Sporrong, 2011).…”