EXECUTIVE SUCCESSION, STRATEGIC REORIENTATION AND PERFORMANCE GROWTH - A LONGITUDINAL-STUDY IN THE US CEMENT INDUSTRY

This research explores the performance consequences of CEO succession, executive team change, and strategic reorientation in different conte xts. Based on team demography and organization learning ideas, we argu e that CEO succession or executive team change enhances incremental or ganization change, while either strategic reorientation or the combina tion of CEO succession with executive team change triggers discontinuo us organization change. We hypothesize that these contrasting interven tion modes are appropriate in different contexts. A longitudinal study of the U.S. cement industry from 1918-1986 demonstrates that simple C EO succession is positively associated with subsequent performance whe n context is stable, but significantly more negatively associated with subsequent performance in turbulent contexts. Executive team change h as significant effects on organization adaptation in both stable and t urbulent contexts. Strategic reorientations are negatively associated with subsequent performance in stable contexts, but significantly more positively associated with subsequent performance in turbulent contex ts. As a set, these results reinforce a demographic approach to succes sion research and indicate that CEO succession, executive team change, and reorientation are each distinct and important levers shaping orga nization adaptation. The impacts of these levers are contingent on org anization context.