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Description
This dissertation examines the impact of chief executive officers’ (CEO) numeracy on strategic decisions and outcomes. CEO numeracy refers to the capacity of a CEO to perform one or more mental activities on information and/or concepts that are numerical in nature. Although numeracy is widely studied in disciplines such as health sciences, education, and psychology and is commonly associated with superior and more effective decision making, it is largely missing from organizational scholarship. Numeracy is particularly relevant in the context of top management teams as the conditions in which executives operate compromise the effectiveness of strategic decision making. As such, I examine the effect of CEO numeracy on acquisition decisions and outcomes. Despite global growth in acquisition investments over the years, studies suggest that acquisitions more often erode instead of improve acquiring firm value. Therefore, I propose that CEO numeracy is negatively associated with acquisition decisions such as the number of acquisitions, value of acquisitions, and number of large acquisitions undertaken by a firm. Moreover, among CEOs that engage in acquisitions, I propose that more numerate CEOs will experience better acquisition-related outcomes compared to less numerate CEOs. Specifically, I hypothesize that CEO numeracy is negatively related to acquisition premiums and positively related to post-acquisition performance. I use a longitudinal sample comprised of 250 randomly selected U.S. based firms from the S&P 500 index to empirically test my hypothesized relationships. Furthermore, I use CEO-attributed text from earnings calls transcripts and a closed-language analytical approach to develop a novel and accessible measure of CEO numeracy. My analyses did not yield support for my hypotheses. I discuss potential theoretical and empirical explanations for the null findings in my research and propose directions to mitigate those issues in future research.
ContributorsAlbader, Latifa A H M H (Author) / Certo, S. Trevis (Thesis advisor) / Bundy, Jonathan (Committee member) / Zhu, David (Committee member) / Arizona State University (Publisher)
Created2023
Description
This dissertation examines the influence of inventor chief executive officers (CEOs) on major strategic outcomes, including strategic change, strategic distinctiveness, and stakeholder management. Inventor CEOs are those who hold at least one patent. Approximately 20 percent of firms in the innovation-intensive industries are managed by inventor CEOs. Famous CEOs like Jeff Bezos, Bill Gates, Steve Jobs, Sanjay Mehrotra, and Mark Zuckerberg are all examples of inventor CEOs. Despite the large presence of inventor CEOs in the business world, the management literature has not examined how they can affect firms’ strategic choices. Building on studies about inventors and strategic leadership, I identify a CEO’s background of being an inventor as an important type of experience that can influence major strategic outcomes. My theory explains why inventor CEOs have the unique attributes of divergent thinking and intrinsic motivation. These unique attributes of inventor CEOs lead them to pursue strategies that are deviant from the past, different from other firms, and responsive to diverse demands of multiple stakeholders. I build on theories about CEO power, firms’ slack resources, and industry dynamism to explain how they moderate the effect of inventor CEOs. Using a longitudinal database of S&P 1500 firms and their CEOs’ inventor background, I empirically test my theoretical predictions. I find that firms managed by inventor CEOs pursue more strategic change compared to other firms. The results of the analysis also show that CEO power and firm slack resources strengthen the influence of inventor CEOs on strategic change.
ContributorsKang, Yungu (Author) / Zhu, David (Thesis advisor) / Lange, Donald (Committee member) / Shropshire, Christine (Committee member) / Arizona State University (Publisher)
Created2021