Influence Of The Chronological Age And Managerial Tenure To The Management Style
Keywords:
CEO, age, leader age, tenure, management style, psychology.Abstract
According to upper echelons theory, the observable traits of top executives, like age and tenure, systematically influence their leadership style and strategic decisions. However, there is still conflicting data regarding how a CEO`s years in office and biological age affect risk-taking, management style and organizational effectiveness. Although these effects are small and influenced by culture and industry, meta-analytic data based on more than 160 primary studies indicates that elder leaders are typically seen as less transformational, less transactional and more passive. When it comes to investment plans, innovation and leverage elder CEOs generally show less risk-taking and frequently put stability ahead of rapid expansion. Research on closely owned companies demonstrates that while the likelihood of survival rises, firm growth and profitability decrease as CEOs get older. Research on tenure reveals non-linear patterns: whereas very lengthy tenure might be related with strategic rigidity or “staleness in the saddle” early and mid-tenure are frequently linked to strategic experimentation, risk-taking and improved environment-strategy fit. According to recent evaluations, tenure should be viewed as a dynamic life-cycle process rather than a single linear predictor.
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