Abstract

Scholars have argued that the transition from a Founder-CEO to an outsider is potentially the most critical succession event in the history of the firm (Hofer and Charan, 1982; Haveman and Khaire, 2004). Extensive research shows that organizational leaders, especially leaders at early stages of a business, have strong influences on company culture, strategic direction, and profits (e.g. Dalton and Kesner, 1984; Wasserman, 2001). Our broad research question is: What predicts founder-CEOs engagement after the transition event. For this largely unexplored research area, we start by examining personality effects. Decades of research show personality factors, especially the Big-5 personality, to predict a wide range of work behaviors including absenteeism, organizational citizenship behaviors, and ultimately work performance. As transitions are highly charged emotional events, we concentrated on Big-5 personality factors linked to people’s emotional responses, namely those of extraversion, neuroticism, and agreeableness.

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