The Nexus Between Ceo Succession, Ceo’s Subgroup Size Ratio and Strategic Change

Surprisingly, our understanding of how differing CEO successor backgrounds might impact the selection of their subgroup for strategic change is limited. To address this limitation, we introduce a new configurational concept of “size ratio of the CEO’s subgroup” and examined how different CEO successors backgrounds will reconfigure the size ratio of the CEO’s subgroup and their subsequent impact on strategic change. We tested our model with 1821 CEO successions in China. We found that the outsider and contender CEOs are more likely to increase size ratio of identity-based and knowledge-based CEO’s subgroup. Additionally, the size ratio of identity-based CEO’s subgroup is positively related to strategic change while moderate size ratio of knowledge-based CEO’s subgroup is beneficial to strategic change. Implications of our results are discussed.