Succession Systems and Organizational Performance in Large Corporations.

Abstract

This dissertation explores the relationship between succession systems (SS)--the rules, methods, and procedures that surround succession events (changes in job incumbency) in organizations-- and a set of organization-level outcomes: corporate reputation, financial performance, turnover rates, and SS effectiveness. The succession process, the crux of the system, is the manner in which decisions to make the change, select c and idates, determine selection criteria, and choose a replacement are made. SSs are construed as inherently political and as one means by which organizations adapt to the vagaries of environmental constraint. In the appropriate development and deployment of its human assets, strategic choice is exercised in the advance of an organization's goals. Sociological and organization theory literatures are reviewed, then three heretofore disparate applied literatures--strategic planning, human resource management, and organization development--are integrated. A conceptual framework for the empirical assessment of SSs is constructed that comprises eight dimensions: formalization, control systems, resource allocation, information systems, political and technical criteria, staff role, and consistency between CEO succession and succession in the rest of the top echelon (i.e., three levels below CEO). The SSs of 235 large corporations are assessed via mail survey to key informants. Bivariate and multivariate tests of association are analyzed to see if, and to what extent, the characteristics of SSs are related to outcomes. Then the effects of seven contextual conditions (i.e., industry, size, age of firm, number of hierarchical levels, board composition, decentralization, and diversification) are accounted for. Over and above the effects of context, meaningful associations are observed. Comparisons within and across dimensions, and across outcomes, are examined, as are the effects of context on the nature of SSs. Although causality cannot be assessed in this cross-sectional design, the results support the contention that the system for developing and choosing leaders is a salient manifestation of strategic choice. Implications for theory and practice, and a plan for further study via in-depth, longitudinal case studies are presented.