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The Influence of German Top Executives on Corporate Policy and Firm Performance


Marcel Normann

The question of whether strategic leaders really matter is important to a wide array of topics. Three essays contribute to empirical top executive research on the relative importance of German CEOs and CFOs. The analyses are based on a unique dataset that includes observations from more than 300 CEOs and 100 CFOs working for 110 publicly listed German firms that operated in 10 different industries between 1983 and 2002. The first essay describes and analyzes characteristics of top executives. The second essay examines the existence and size of top executive-specific effects as well as industry-, company- and executive-level moderating factors. The third essay sheds light on the circumstances under which CEOs and CFOs matter the most (or least).


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1. Motivation, positioning, and outline


The questions of whether strategic leaders really matter, perhaps to a different extent, and under which conditions they matter more or less, are important to a wide array of topics, including studies of strategic decision processes, executive compensation, and governance regulation (e.g., Collins et al., 2009; Eisenhardt and Bourgeois 1988). Based on the idea that chief execu- tive officers (CEOs) wield dominant power and enjoy an exposed position in the board (Finkelstein, 1992), considerable research has attempted to clarify whether, and under what conditions, they have an impact on organizational outcomes (for overviews, see Bowman and Helfat, 2001; Carpenter, Gelet- kanycz, and Sanders, 2004).1 Researchers focus primarily on US settings to show that CEOs matter, and that environmental as well as individual factors affect the degree to which they matter (Crossland and Hambrick, 2007). They have found that CEOs influence firm strategies, policies, and structure (e.g., Boeker, 1997; Miller and Toulouse, 1986; Papadakis and Barwise, 2002) as well as performance (e.g., Chatterjee and Hambrick, 2007; Miller and Tou- louse, 1986). However, investigators have given less attention to the idea that other C-level leaders may matter as well, that strategic leaders’ impact may be different in national settings other than the US, and that their impact may depend on particular organizational factors. Despite lack of convincing evidence, most managers and academics would agree that, like the CEO, the chief financial officer (CFO) occupies a par- ticularly prominent position in the firm (Finkelstein, Hambrick, and Can- nella, 2009; Marcel, 2009; Tulimieri...

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