You Are Great and I Am Great (Too): Examining New CEOs’ Social Influence Behaviors during Leadership Transition

Abstract

In this study, we examine new CEOs’ social influence behaviors in leadership transition periods. Taking charge is challenging for new CEOs, particularly when (a) predecessor CEOs stay on as board chairs, or (b) the stock market reacts negatively to new CEO appointments. We propose that new CEOs’ social influence behaviors may alter the adverse impacts of these factors on their early survival prospects. We examine two types of social influence behaviors displayed by new CEOs: (1) ingratiation toward predecessor CEOs and (2) self-promotion. We create proxies for such behaviors using a computer-aided content analysis of transcripts of new CEOs’ conference calls with securities analysts. We find that ingratiation toward predecessors reduces the adverse impact of predecessors’ remaining as board chairs while self-promotion mitigates the negative impact of negative stock market reactions. However, we also find evidence demonstrating that new CEOs’ social influence behaviors can backfire. Accordingly, our study makes important contributions to both the CEO succession literature and the social influence literature.

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