Corporate Strategy And Executive Turnover

The research on the consequences of the strategic role of companies is a topic that has been widely concerned by scholars at home and abroad in recent years.Miles&Snow(1978,2003)proposed to divide corporate strategy into prospectors,ana--lyzers,and defenders,this classification has been generally recognized by the academic community.Most of the studies on the consequences of corporate strategy in the existing literature focus on the aspects of operating performance,investment and financing behavior etc.,but rarely connected with the senior managers of the executives of the strategy.With the increasingly fierce phenomenon of executive turnover at home and abroad,corporate strategy provides a new perspective for the study of the relationship between traditional executive change and performance.Based on the data of A-share listed companies in China from 2003 to 2018,this paper analyzes the moderating effect of corporate strategy on corporate performance and executive turnover.The study found that:(1)Company strategy will significantly affect the sensitivity of executive turnover to performance.Compared with defenders,the more aggressive the company strategy is,the less likely the executive will change due to poor performance.This shows that prospectors are more tolerant of executives.In order to develop new products and new markets,tolerance of failure is the key to prospectors;(2)After distinguishing the nature of property rights,it is found that the moderating effect of corporate strategy on executive turnover and performance is mainly reflected in non-state-owned enterprises.This shows that the appointment and removal of senior managers in state-owned enterprises in China still has a strong political color,and the manager market in state-owned enterprises is relatively closed.Therefore,the fault tolerance effect under the guidance of corporate strategy has not been brought into play in state-owned enterprises;(3)After the introduction of fault-tolerant mechanism,through grouping tests on the different shareholding ratios of institutional investors and senior managers,it is found that prospectors has more significant positive moderating effect on senior manager change and performance in enterprises with lower institutional investors' shareholding.This shows that China's institutional investor market is not fully developed,and most institutional investors are pursuing short-term returns.Therefore,the tolerance of prospectors to poor performance of senior executives is limited when the proportion of institutional investors is high.In the sample with a high proportion of senior management shares,neither defenders nor prospectors has significant moderating effect on senior management and performance.This shows that as an incentive measure,executive shareholding can enhance the voice of executives,thus changing the tolerance of different strategic enterprises to poor performance of executives to a certain extent.This study enriches the research on the economic consequences of the company's strategy and combines the company's strategy with its operating performance and senior management changes.At the same time,it expands the research on executive change and provides a new explanation for the relationship between executive change and business performance.It provides some theoretical guidance for the executive incentive under the guidance of different corporate strategies.For prospectors,a simple standard incentive mechanism is not enough to maintain the stability of executives,but also should be combined with fault-tolerant incentive mechanism.