Antecedents and consequences of new CEO's origins and degrees of insiderness/outsiderness: A longitudinal study of the United States airline and chemical industries, 1972--2002

Empirical research offers little insight into what motivates different firms to choose CEOs with different degrees of insiderness (firm tenure) and outsiderness (whether the outsider is from the same, related or unrelated industry). Since a CEO succession represents an important mechanism for learning and adaptation, different degrees of a successor's insiderness or outsiderness present different opportunities to the firm from an organizational learning perspective.;This longitudinal study investigates the antecedents and consequences of these different types of succession events in two contrasting industries in terms of environmental uncertainty---the U.S. airline and the U.S. chemical industry---from 1972 to 2002. In a total of 90 firms, 163 succession events were observed. Findings challenge previous theory and empirical results of some the factors influencing new CEO selections and the outcomes of the new CEO's origin and firm and industry tenure and the post-succession TMT changes.;On the antecedents of new CEO selections, results indicate that while the sociopolitical factors are more effective on whether the new CEO will come from within or outside the firm, environmental factors tend to be stronger predictors of who will be selected as the new insider. None of the environmental and organizational factors significantly predict the industry origin (the same with, related, or unrelated to the focal firm's industry) of the new outsiders.;With regard to the consequences of succession events, although results clearly indicated that CEO successions are not disruptive events as some researchers had suggested earlier, whether they can be adaptive depends on the succession context, particularly the successor's firm tenure, under what firm performance conditions the new CEO has come on board, and what degrees of TMT changes he/she has made after the succession event. Insights gained from this study are expected to help boards, executive search firms, and others involved in executive selection in making CEO selections. The study also potentially helps new CEOs to manage TMT changes more effectively.