Mastering the shift: exploring external CEO successions in a comparative case study

Abstract

This paper critically examines the claim made by previous research that explains CEO successions as a result of a linear process, influenced by isolated factors of causality succeeding one another. Thus, it seeks to provide a more nuanced understanding of the process of CEO successions, acknowledges the complexity, ambiguity, and unpredictability in its nature. It is based on a comparative case study of two companies that during the last decade have attempted to go through a CEO succession process, although only one attempt is successful, while the others are reversed to the initial state of power relations. Firstly, this study reveals - by applying the sociology of translation - that CEO successions could be viewed as a construction of power relations enabled through an embedded network of actors and therefore contributes to the need of a more grounded theory for analyzing CEO successions; secondly, that the legitimate spokesperson for change, through the four moments of problematization, interessement, enrolment and mobilization, facilitates stability, effectiveness and long-term economic sustainability for companies that undergo the process of CEO succession; thirdly, from a managerial and corporate governance perspective, this enables those stakeholders to participate, by assuming an active role and negotiate with the same network of actors that they are asked to respond to. As a result, the company could take advantage of the translation of generational transition within the network of actors to assure a sustainable business while creating a more robust and faithful alliance to tackle future challenges.