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PERSONNEL PSYCHOLOGY
2016, 69, 775–862
DO CEOs MATTER TO FIRM STRATEGIC ACTIONS
AND FIRM PERFORMANCE? A META-ANALYTIC
INVESTIGATION BASED ON UPPER ECHELONS
THEORY
GANG WANG
Florida State University
R. MICHAEL HOLMES JR.
Florida State University
IN-SUE OH
Temple University
WEICHUN ZHU
The Pennsylvania State University
What roles do CEOs play in firm performance? Toaddress this question,
the management field has accumulated a substantial amount of research
over the past 3 decades built on upper echelons theory (UET), which
posits that CEO characteristics manifest in firm strategic actions and, in
this way, future firm performance. Hence, there is a need to systemati-
cally amass and take stock of prior empirical findings for UET testing
and development. We use meta-analytic techniques to synthesize prior
UET research on the relationships among commonly studied CEO char-
acteristics, firm strategic actions, and future firm performance. Based on
308 studies, meta-analytic results generally support UET’s predictions
with a few exceptions: CEO characteristics (i.e., tenure, formal educa-
tion, prior career experience, and positive self-concept) are significantly
associated with firm strategic actions, which in turn are significantly
related to future firm performance. Moreover, CEO characteristics (i.e.,
age, tenure, formal education, and prior career experience) are positively
related to future firm performance. In addition, fine-grained analyses
have revealed interesting and important relationships between specific
measures of CEO characteristics (e.g., CEO prior task experience) and
firm outcomes (e.g., firm strategic actions that match with CEO prior
We thank Drs. Donald C. Hambrick, Bruce T. Lamont, Chad Van Iddekinge, Kibeom
Lee, John Haleblian, and Huy Le for their valuable comments on an early version of
this paper and/or assistance. We also thank all the authors of the primary studies, who
collectively made this meta-analysis possible. The first author also appreciates the support
of Florida State University’s First Year Assistant Professor Program.
Correspondence and requests for reprints should be addressed to Gang Wang, Depart-
ment of Management, College of Business, Florida State University, 821 Academic Way,
P.O. Box 3061110, Tallahassee, FL 32306; gwang5@fsu.edu.
C
2015 Wiley Periodicals, Inc. doi: 10.1111/peps.12140
775
776 PERSONNEL PSYCHOLOGY
task experience). Implications for theory, future research, and practice
are discussed.
Scholarly attention to chief executive officers (CEOs) remains ro-
bust (Baum, Bird, & Singh, 2011; Hambrick & Quigley, 2014). Two
critical questions that have repeatedly drawn scientific inquiries are:
“Do CEOs matter to firm performance?” and “How may CEOs influ-
ence firm performance?” In many ways, these two questions have long
been central to the strategic management field (e.g., Rumelt, Schendel,
& Teece, 1991). Increasingly, they also have been capturing the attention
of scholars in organizational behavior and human resource management
(e.g., Colbert, Barrick, & Bradley, 2014; Peterson, Galvin, & Lange,
2012).
Upper echelons theory (UET) is an important theoretical perspective
to address such questions (Hambrick & Mason, 1984). The core thesis
of UET is that top executives’ “experiences, values, and personalities . . .
affect their choices” (Hambrick, 2007, p. 334) “and, through these choices,
organizational performance” (Hambrick & Mason, 1984, p. 197). The
importance of UET is evident in the 2,304 citations (Web of Science as
of December 2015) of Hambrick and Mason’s (1984) seminal article that
introduced the theory, the 354 citations (Web of Science as of December
2015) of Hambrick’s (2007) article that updated and extended the theory,
the many narrative review articles that have examined particular aspects
of UET research (e.g., Carpenter, Geletkanycz, & Sanders, 2004), and the
many books that have reviewed UET research and have taken the theory
in new directions (e.g., Finkelstein, Hambrick, & Cannella, 2009).
Given the large volume of studies that UET has generated over the
past 3 decades and some inconsistencies in the empirical findings, we
argue that it is time to begin taking stock of empirical studies that have
examined UET and to push the theory forward. Meta-analysis allows
us to synthesize empirical evidence quantitatively across primary stud-
ies and resolve inconsistent findings, thus providing an important plat-
form for theory testing, refinement, and development (Schmidt & Hunter,
2014). In this way, meta-analysis has the potential to calibrate and ad-
vance some of the knowledge accumulated through the application of
UET (Bergh et al., 2016). Thus, the major purpose of this paper is to meta-
analytically examine relationships among CEO characteristics, firm strate-
gic actions (which result from CEOs’ strategic choices), and future firm
performance.
Our central theoretical model relates to UET’s core thesis about
the effects of CEOs on firm behavior and performance (Hambrick,
2007; Hambrick & Mason, 1984). As Figure 1 shows, we evaluate
and extend a process model whereby CEO characteristics influence
GANG WANG ET AL. 777
CEO positive self-concept CEO personality traits
Core self-evaluations
Disaggregated with
reference to research on core
self-evaluations (e.g., Judge,
Locke, & Durham, 1997)
Disaggregated with reference to
Finkelstein et al. (2009)’s
typology
Disaggregated according to
the HEXACO six-factor
personality framework
(Ashton & Lee, 2005)
Charisma
Need for achievement
Positive affectivity
Risk orientation
Need for power
Promotion and prevention
focus
Positive self-regard
Locus of control
Charisma
Need for achievement
Positive affectivity
Risk orientation
Need for power
Promotion and prevention
focus
(Low in) humility
(Low in) Emotionality
Extraversion
Agreeableness
Conscientiousness
Openness to experience
Charisma
CEO age
CEO tenure
CEO formal education
CEO prior career experience
1.1 Throughput experience
1.2 Non-throughput experience
1.3 International experience
1.4 General experience
2.1 Task experience
2.2 Job experience
2.3 Organizational experience
2.4 Industry experience
Firm strategic actions
Strategic scope
Acquisition
Divestiture
International
diversification
Product diversification
Strategic risk
Advertising intensity
Capital investment
Firm risk taking
Leverage
Product innovation
Strategic change
Future firm
performance
Profitability
Growth
Survival
Efficiency
H7a
H1
H2
H3
H4
H5
H6
H7e
H7b H7c
H7d
Figure 1: The Theoretical Model of This Study.
Note. H=Hypothesis.
778 PERSONNEL PSYCHOLOGY
future firm performance by shaping firms’ strategic actions. This meta-
analysis distinguishes both broad and narrow operationalizations of im-
portant UET constructs. In doing so, we provide both a comprehen-
sive and a fine-grained analysis of UET’s predictions about the role
of CEOs.
In particular, we focus on two groups of CEO characteristics. The first
group concerns CEO experience, which captures CEO background char-
acteristics that provide much of the knowledge and values CEOs bring
to bear when making judgments and decisions that affect firm strategy.
We consider four indicators of CEO experience: age, tenure as CEO, for-
mal education, and prior career experience. We chose these indicators
for several reasons. First, they are observable and measureable charac-
teristics that are central to UET’s predictions about the roles of CEOs in
firm outcomes, such as performance (Hambrick & Mason, 1984). Sec-
ond, they are among the most frequently studied CEO characteristics in
the UET literature (Finkelstein et al., 2009), making them prime can-
didates for meta-analysis. Third, UET research on these variables has
produced mixed empirical findings, thus warranting meta-analytic clarifi-
cation. Scholars have found, for example, that tenure as CEO is positively
(McClelland, Liang, & Barker III, 2010), negatively (Nadkarni & Her-
mann, 2010), or not related (Balkin, Markman, & Gomez-Mejia, 2000)
to firm performance. Likewise, scholars have found positive (Fischer &
Pollock, 2004) or negative (Zhang & Rajagopalan, 2010) relationships
between CEO age and firm performance.
The second group of CEO characteristics we consider relates to CEO
personality. Personality is a “relatively permanent, ingrained disposition”
that affects how CEOs attend to and process information about the en-
vironment, the firm, and their own capabilities (Finkelstein et al., 2009,
p. 70). Of the many paradigms of personality, the most prominent is the
five-factor model (FFM) of personality often studied in the micro literature
(e.g., Barrick & Mount, 1991; Costa & McCrae, 1992; Digman, 1990).
However, with few exceptions (e.g., Colbert et al., 2014; Nadkarni & Her-
rmann, 2010; Peterson, Smith, Martorana, & Owens, 2003), the FFM has
received little attention in UET research, partly because CEOs often are
unwilling to respond to lengthy psychological scales to operationalize the
FFM (Hambrick, 2007). Instead, UET research has often focused on sev-
eral individual personality constructs—such as narcissism and (internal)
locus of control—that relate to a person’s positive self-concept (Hiller &
Hambrick, 2005).
Positive self-concept is a core dispositional construct that is related
to the core self-evaluations (CSE) construct proposed by Judge and his
colleagues (e.g., Judge, Erez, & Bono, 1998; Judge, Erez, Bono, & Thore-
sen, 2002, 2003; Judge et al., 1997). Specifically, positive self-concept
GANG WANG ET AL. 779
depicts the extent to which individuals favorably regard themselves, their
competence, and their ability to influence their environments (Hiller &
Hambrick, 2005; Judge et al., 1998). We chose to focus on personality
constructs related to positive self-concept because most UET research
on CEO personality relies on these constructs. Typically, UET scholars
examine single aspects of positive self-concept using concise scales that
tap specific constructs (e.g., locus of control; Boone, de Brabander, &
Witteloostuijn, 1996; Miller, de Vries, & Toulouse, 1982) or using con-
tent analysis (e.g., Hayward & Hambrick, 1997; Simon & Houghton,
2003). A meta-analysis of this growing literature advances the field’s
understanding of the relationships between CEO personality (in particu-
lar, positive self-concept and related constructs) and important firm out-
comes, including which aspects of CEO personality appear to matter
and how.
In summary, this meta-analysis contributes to the management litera-
ture and to UET in important ways. Although there is broad agreement
that CEO experience and personality matter to the firm (Hambrick, 2007),
there is no systematic meta-analytic evaluation of empirical studies that
examined relationships between these CEO characteristics and firm out-
comes. Such a meta-analytic evaluation advances knowledge about the
role of CEO attributes in firm outcomes by (a) testing UET predictions
about the effects of CEOs on firm strategic actions and future firm perfor-
mance, (b) providing more accurate effect size estimates (Bosco, Aguinis,
Singh, Filed, & Pierce, 2015), (c) shedding light on the predictive validity
and strategic value of UET, and (d) offering evidence-based implications
for future research (Cohen, 1988; Combs, 2010). Overall, our study syn-
thesizes and consolidates disparate findings on CEO characteristics, firm
strategic actions, and future firm performance; provides a more complete
and thorough picture of this literature; and identifies future research di-
rections to move UET forward.
Upper Echelons Theory
UET “is built on the premise of bounded rationality” (Hambrick, 2007,
p. 334), which refers to human limitations in “accessing, processing, and
using information” (Holmes, Bromiley, Devers, Holcomb, & McGuire,
2011, p. 1072; Simon, 1957). Hambrick and Mason (1984) argued that, due
to these limitations, CEOs’ cognitive bases and personality traits influence
their field of vision (i.e., the direction of their attention), perception (i.e.,
what they notice), and interpretation (i.e., how they attach meaning).
In this way, CEOs’ cognitive bases and personality traits shape their
strategic choices by influencing “their personalized interpretation of the
strategic situations they face” (Hambrick, 2007, p. 334; see also Beyer,
780 PERSONNEL PSYCHOLOGY
Chattopadhyay, George, Glick, & Pugliese, 1997; Dearborn & Simon,
1958; Walsh, 1988).
Because it is difficult to collect psychometric data on the cognitive
bases and personal values of CEOs, UET suggests that researchers can
examine “observable managerial characteristics as indicators” of these
variables instead (Hambrick & Mason, 1984, p. 196). Thus, UET scholars
often have focused on demographic characteristics, such as age or formal
education, which are indicators of CEO experience. Recently, scholars
also have directed more attention to CEO personality, often by using
psychological scales or indirect indicators (e.g., via content analysis) to
study single personality constructs, such as CSE or narcissism (Chatterjee
& Hambrick, 2007; Simsek, 2007).
According to UET, CEO characteristics manifest in firm strategic ac-
tions, which in turn shape future firm performance.1UET predicts that
firm behavior is a reflection of the choices its CEO makes. Thus, the firm’s
use of different strategies and the financial resources it spends on them
are indicators of firm strategic actions. By firm strategic actions, we mean
important, large-scale, and long-term firm-level undertakings that involve
significant resource commitments and some degree of irreversibility (at
least in the short term). Strategic actions are expensive investments that
tend to alter the firm’s scope (i.e., the product and service markets in
which it competes), usually involve significant risk, and often are used
to make changes or adjustments to firm strategy. Examples include ac-
quisitions, entry into international markets, product diversification, cap-
ital investments, and investments in innovation (e.g., R&D spending).
Strategic actions are different from smaller-scale and more incremental
operational decisions—such as inventory or pricing—which are short-
term focused and more amendable to formal, optimizing, and calculable
solutions (Child, 1972; Connelly, Tihanyi, Certo, & Hitt, 2010).
Hypothesis Development
CEO Age
In UET, CEO age (i.e., the length of time that a CEO has lived) is
considered to be an important indicator of CEO experience. Hambrick
and Mason (1984) argued that firms led by younger CEOs take more
risk, which manifests in more or larger-scale strategic actions. Younger
1In the empirical portion of our study, we analyze both aggregate measures of firm
strategic actions and also more specific measures that indicate different types of strategic
actions. We do likewise for the different indicators of future firm performance that are
available. The Discussion section interprets these results in detail.
GANG WANG ET AL. 781
CEOs have had fewer opportunities to accumulate wealth and knowledge
during their lives. Lured by the prospect of large financial returns, they may
initiate aggressive strategic actions to generate personal and organizational
wealth (Yim, 2013). However, due to their limited experiences, they often
lack the complex and well-developed cognitive schema that older CEOs
have. In turn, younger CEOs have greater difficulty seeing, understanding,
and appreciating the possibility that their strategic choices might produce
returns below what they envision. Therefore, they might initiate more or
spend more on strategic actions overall.
By contrast, older CEOs may initiate limited strategic actions. Because
their cognitive schema has had more time to mature and solidify, older
CEOs might be less willing or able to learn and integrate new information
quickly. In addition, they have had more time to accumulate wealth and
have an interest in protecting this wealth in preparation for advanced age.
As a result, older CEOs might be more committed to the status quo and less
likely to task risk (Serfling, 2014). Likewise, Hitt and Tyler (1991) found
that older executives evaluated riskier (e.g., larger) acquisition targets less
favorably than younger executives did. Using similar reasoning, scholars
have found that older CEOs tend to engage in less R&D spending (Barker
& Mueller, 2002) and international diversification (Herrmann, 2002) as
well. Thus, we posit a negative relationship between CEO age and firm
strategic actions.
Hypothesis 1: As CEO age increases, firm strategic actions decrease.
CEO Tenure
CEO tenure, which refers to the length of time a person has occu-
pied the CEO position in the firm, is also an important indicator of CEO
experience. CEO tenure is among the most studied CEO characteristics
in UET research (Finkelstein et al., 2009). In general, UET studies sug-
gest longer-tenured CEOs initiate fewer strategic actions. In fact, some
UET scholars use CEO tenure to proxy constructs like persistence, com-
mitment to the status quo, and rigidity (Finkelstein & Hambrick, 1990).
At least two factors support a negative relationship between CEO tenure
and firm strategic actions. First, as their career advances, CEOs are more
concerned about their legacies and are less willing to pursue new initia-
tives and launch risky investments that threaten those legacies (Matta &
Beamish, 2008). Second, during their tenure, CEOs accumulate power,
knowledge, and skills to resist pressure from other stakeholders (Meyer,
1975). Longer-tenured CEOs, for example, have had more opportunities
to handpick subordinates (Miller, 1991) and nominate board members
(e.g., Westphal, 1999). Through these selections, CEOs can minimize
782 PERSONNEL PSYCHOLOGY
dissent and surround themselves with people who have worldviews sim-
ilar to their own (Acharya & Pollock, 2013; Zajac & Westphal, 1996a).
Thus, as tenure increases, CEO autonomy may increase, and the pressure
CEOs receive from other constituencies may decrease. As a result, CEOs
often become “stale in the saddle,” and their willingness to initiate or fund
new strategic actions declines as their tenure as CEO increases (Miller,
1991, p. 34).
Conversely, CEOs tend to confront power struggles early in their
tenure. During this time, for example, they are at higher risk of dismissal
(Shen & Cannella, 2002). Thus, CEOs are motivated to prove their com-
petence and demonstrate their power, often by investing in major strategic
actions, early in their tenure (e.g., Prendergast & Stole, 1996). For exam-
ple, strategic actions to change the firm’s scope or strategy are a way for
CEOs to exert their authority and begin to implement their visions for the
firm. In addition, new CEOs may seek to co-opt or appease knowledge-
able top management team or board members who provide mentoring and
support early in their tenure (Shen, 2003; Westphal, 1998). In turn, they
may authorize strategic actions that are favored by these powerful individ-
uals. Last, because short-tenured CEOs have less experience in the CEO
position, it might be necessary for them to experiment with the different
strategic actions available (Hambrick & Fukutomi, 1991). Thus, we posit
a negative relationship between CEO tenure and firm strategic actions.
Hypothesis 2: As CEO tenure increases, firm strategic actions de-
crease.
CEO Formal Education
The third indicator of CEO experience, CEO formal education, refers
to the amount of formal schooling CEOs had or to the number of post-
secondary degrees they held. Wally and Baum (1994) argued that CEO
formal education is a proxy of CEO cognitive ability, which helps CEOs
acquire and process more complex information and make decisions faster
(see also Hunter, 1986). Formal education also may indicate a CEO’s
innate curiosity and openness to novel concepts. Thus, as Thomas, Litscert,
and Ramaswamy (1991) argued, individuals with more formal education
often are more receptive to new ideas. Similarly, formal education provides
opportunities for CEOs to accumulate rich knowledge bases and skill sets.
In turn, formal education may equip CEOs with the absorptive capacity
necessary to understand and process information about changing business
environments, new technologies, and so on.
In support of these arguments, Kimberly and Evanisko (1981) found
that formal education was positively related to individuals’ receptivity to
GANG WANG ET AL. 783
innovation and change (see also Becker, 1964; Ng & Feldman, 2009; and
Rogers & Shoemaker, 1971). By extension, CEO formal education may
increase CEOs’ desire to pursue more novel, complex, and significant
firm strategies. Thus, we predict that CEO formal education promotes
firm strategic actions.
Hypothesis 3: As CEO formal education increases, firm strategic ac-
tions increase.
CEO Prior Career Experience
UET suggests that CEO prior career experience, which refers to the
amount of time CEOs spent working in various roles and positions before
becoming CEOs, also shapes their strategic choices. CEOs bring orienta-
tions and perspectives based on their prior career experiences to the CEO
position. According to UET, these prior career experiences affect CEOs’
strategic choices by shaping the information they seek and notice, how
they interpret the information, and how they utilize it to make decisions
(Hambrick & Mason, 1984).
UET research has focused mainly on three related types of CEO prior
career experience. First, most UET research has examined CEO functional
experience, which refers to the CEO’s background in the primary business
disciplines and operational areas that are common across organizations.
For example, throughput experience is concerned with implementing and
monitoring the production process that transforms inputs (e.g., raw ma-
terials) into outputs (e.g., products and services), and output experience
is concerned with the product development, sales, and marketing pro-
cesses (Barker & Mueller, 2002; Datta & Rajagopalan, 1998). Second,
UET researchers have studied CEO experience with particular strategic
actions, most notably international experience (e.g., whether the CEO had
worked in foreign operations; Khavul, Benson, & Datta, 2010). Third,
UET scholars have examined CEOs’ general career experiences, such
as industry experience (e.g., the number of years the CEO had worked
in his/her firm’s industry before becoming the CEO; Simsek, 2007) and
prior career experience in executive-level positions at other firms before
becoming the CEO (e.g., whether the CEO had held other CEO positions
previously; Zhang, 2008).
Although CEOs accrue prior career experiences in different areas, we
argue that the simple accumulation of career experience in any area may
increase the CEOs willingness to engage in strategic actions. Researchers
have long argued that managers’ prior career experiences influence the
knowledge, skills, attitudes, values, and information processing that they
bring to bear when making future judgments and decisions about firm
784 PERSONNEL PSYCHOLOGY
strategy (Dearborn & Simon, 1958; Lawrence & Lorsch, 1967). For ex-
ample, they learn about and interpret future goals, problems and potential
solutions, and business opportunities in light of their accumulated prior
career experiences. More generally, prior career experiences provide a
template that helps CEOs sort through information to identify and evalu-
ate the decision alternatives that they face, thus affecting their preferences
and strategic choices.
The rich repertoire of knowledge and skills that CEOs develop through
their accumulated prior career experiences is likely to increase their confi-
dence that they can understand and competently handle the situations they
confront. Further, as prior career experience increases, CEOs become
more comfortable searching for and processing information to make de-
cisions. This experience also provides exposure to models and prototypes
for implementing the decisions made. Thus, as CEO prior career expe-
rience increases, it is less likely that indecision will prevent the CEOs
from making adjustments to firm scope, funding risky investments, spear-
heading strategic change, and so on. In this way, CEOs may become more
comfortable pursuing strategic actions as their prior career experiences in-
creases. Therefore, we argue that there is a positive relationship between
CEO prior career experience and firm strategic actions.
Hypothesis 4: As CEO prior career experience increases, firm strate-
gic actions increase.
CEO Positive Self-Concept
Relative to the volume of UET research on CEO experience, there
is less UET research on CEO personality. However, UET research on
CEO personality is growing and beginning to shed new light on firm
strategic actions. As noted, UET research on CEO personality typically
examines a range of related constructs that reflect CEOs’ positive self-
concept, which refers to a broad construct that describes the extent to
which CEOs positively evaluate themselves and their ability to influence
their environments. Individuals with positive self-concept hold favorable
self-images and are more likely to view themselves as exceptional, potent,
admirable, and important (Finkelstein et al., 2009; Hiller & Hambrick,
2005; Judge et al., 1997).
CEO positive self-concept influences firm strategic actions by affect-
ing CEO decision making in at least two important ways. First, CEOs’
positive self-concept influences their perceptions about which alternative
strategic actions are available, attractive, and likely to yield profits (e.g.,
Malmendier & Tate, 2005). For example, the positive emotions character-
istic of positive self-concept might lead CEOs to process more information
GANG WANG ET AL. 785
overall and attend more to positive cues (Baron, 2008; Isen & Shalker,
1982). By extension, they may identify more opportunities to engage in
strategic actions and also view those opportunities more favorably. Sec-
ond, individuals with more positive self-concept tend to be more confident,
hold more optimistic outcome expectancy, and set higher goals (Barrick,
Mount, & Gupta, 2003; Judge & Ilies, 2002; Lee, Sheldon, & Turban,
2003). Thus, as positive self-concept increases, CEOs are more confident
in themselves and their capabilities, are less focused on their own limita-
tions, experience less anxiety, and are more comfortable making decisions
to pursue “large-stakes initiatives” (Hiller & Hambrick, 2005, p. 311).
Empirical research in UET generally supports this prediction. Chat-
terjee and Hambrick (2007), for example, found that CEO narcissism was
positively related to the number and size of firm acquisitions. Similarly,
Chatterjee and Hambrick (2011) found that CEO narcissism was posi-
tively related to spending on R&D, capital expenditures, and mergers and
acquisitions. In line with these findings, Miller et al. (1982) found that
top executives including CEOs with an internal locus of control initiated
more innovative firm strategies. Thus, we predict a positive relationship
between CEO positive self-concept and firms’ strategic actions.
Hypothesis 5: As CEO positive self-concept increases, firm strategic
actions increase.
Firm Strategic Actions and Firm Performance
Firm performance refers to the firm’s degree of economic success
(Venkatraman & Ramanujam, 1986). Hambrick and Mason (1984) argued
that strategic actions have performance implications but did not explic-
itly address whether the relationship was positive or negative. However,
subsequent UET research offers at least two reasons to expect a positive
relationship between strategic actions and future firm performance. First,
strategic actions benefit future firm performance by enabling firms to
pursue potentially profitable opportunities (e.g., Simsek, 2007). Second,
engaging in strategic actions suggests firms are proactive, risk taking, and
willing to change. Such attributes help firms navigate and take advan-
tage of favorable market conditions (e.g., new technologies) and perhaps
avoid adverse conditions (e.g., aggressive moves by rivals; Nadkarni &
Herrmann, 2010).
More generally, firms must be able to offer innovative products and
services, adjust their strategies, and diversify into new product and interna-
tional markets to compete in today’s hypercompetitive and fast-changing
economy (e.g., Hitt, Keats, & DeMarie, 1998; Nerkar & Roberts, 2004).
Conversely, firms that maintain commitments to the status quo are prone to
786 PERSONNEL PSYCHOLOGY
adhere to obsolete products and services, lose market share, and perform
worse (D’Aveni, Dagnino, & Smith, 2010; McDougall & Oviatt, 1996),
particularly as the environment changes over time (Grewal & Tansuhaj,
2001; Grimm & Smith, 1991). Thus, we predict a positive relationship
between firms’ strategic actions and future firm performance.
Hypothesis 6: As firm strategic actions increase, future firm perfor-
mance increases.
UET suggests that the aforementioned CEO characteristics would re-
late to future firm performance in two broad ways. First, as argued earlier,
the CEO characteristics may influence future firm performance by shap-
ing the strategic actions firms pursue. For instance, we expect CEO age
to be negatively associated with future firm performance, because it has
a negative relationship with firm strategic actions (Hypothesis 1), which
are positively related to future firm performance (Hypothesis 6). Parallel
logic supports a negative relationship between CEO tenure and future firm
performance and a positive relationship of CEO formal education, CEO
prior career experience, and CEO positive self-concept with future firm
performance respectively.
Second, CEO characteristics influence future firm performance in ways
not directly tied to firm strategic actions. In particular, CEOs also shape
day-to-day operational decisions, such as the hiring of other top manage-
ment team members; managing relationships with investors, regulators,
and other stakeholders; and pricing and inventory management processes.
In addition, they are responsible for building and maintaining organiza-
tional culture, which in turn shapes the composition of the firm’s workforce
and guides the decision making of lower-level employees.
CEO characteristics influence these aspects of the business as well.
For example, according to UET, CEO age and CEO tenure are associated
with greater complacency with and commitment to the status quo. There-
fore, firms led by older or longer-tenured CEOs might be more susceptible
to stagnation and adherence to outdated business processes. Conversely,
CEO formal education and CEO prior career experience likely enrich
CEOs’ cognitive schema, openness to new ideas, and access to important
social networks. Thus, these two characteristics might positively con-
tribute to the firm’s flexibility, willingness to experiment, and access to
financial and human capital. Finally, CEO positive self-concept is associ-
ated with confidence, optimism, and decisiveness, all of which are likely
to produce more vibrant and productive organizations. Taken together,
these arguments suggest that CEO age and tenure might relate negatively
to future firm performance, whereas CEO formal education, prior career
GANG WANG ET AL. 787
experience, and positive self-concept might relate positively to future firm
performance.
Hypothesis 7: CEO age (Hypothesis 7a) and CEO tenure (Hypothesis
7b) are negatively associated with future firm perfor-
mance, whereas CEO formal education (Hypothesis
7c), CEO prior career experience (Hypothesis 7d), and
CEO positive self-concept (Hypothesis 7e) are posi-
tively associated with future firm performance.
Method
Literature Search and Criteria for Inclusion
We conducted an extensive electronic and manual search to identify
relevant primary studies. The search included published articles, doc-
toral dissertations and master’s theses, and research reports available
as of March 2015. For the electronic search, we examined databases
including ABI/INFORM Global, PsycINFO, EBSCO, Web of Sci-
ence, ProQuest Dissertation, and Google Scholar using combinations
of the following key words: chief executive officer, CEO, strategic ac-
tions/change/choices/risks, and firm performance/profitability. We also
searched the aforementioned databases for primary studies that cited
Hambrick and Mason (1984), the seminal work that introduced UET
to the literature. For the manual search, we consulted narrative re-
views (e.g., Finkelstein et al., 2009; Hambrick, 2007), conference
proceedings (e.g., Academy of Management Annual Meeting and Strate-
gic Management Society Annual International Conference), and in-press
articles in major journals that had published relevant studies in the past
(e.g., Academy of Management Journal,Strategic Management Journal,
Personnel Psychology, Journal of Applied Psychology, etc.).
Our initial search resulted in over one thousand studies. Only pri-
mary studies that met the following criteria were included. First, the
studies had to measure at least one of the focal CEO characteristics de-
scribed above. Second, they had to report at least one correlation (or the
information to compute such a correlation) between a CEO character-
istic and either dependent variable of interest (i.e., strategic actions or
firm performance). Third, we only included studies written in English.
Fourth, for unpublished studies (e.g., doctoral dissertations or working
papers), we only included information that did not also appear in later
journal publications. Three hundred eight studies (315 samples) met
these criteria and were contained in the meta-analysis. Of these stud-
ies, 258 (261 samples) were published or in press, and 50 (54 samples)
788 PERSONNEL PSYCHOLOGY
were unpublished. The reference list and Appendix 1 present all the
studies.
Coding of Information2
The first and third authors examined the primary studies independently
and developed a coding protocol based on the conceptual definitions of
each construct. The first author initially coded all the studies and dis-
cussed with the third author whenever ambiguities arose. After the first
round of coding, the other authors individually checked the first author’s
coding accuracy. No discrepancy was detected in 94% of the studies. Dis-
agreements and typographical errors detected in the remaining 6% of the
primary studies were resolved or corrected through a series of discus-
sions among the coauthors and by referring back to the original studies.
Figure 1 provides a summary of the coding scheme we used.
CEO Characteristics
CEO age was operationalized as the length of time (e.g., years) a CEO
had lived when data were collected. CEO tenure was operationalized
as the length of time the person had held the CEO position. In a few
studies, CEO firm tenure and TMT/board tenure were measured. Although
these measures usually correlate with CEO position tenure, which is our
focus, they are conceptually different variables. Thus, these measures were
excluded. Importantly, however, the results essentially are identical with
or without these measures. CEO formal education was operationalized
as CEO education level,years of schooling, and the number of post-
secondary degrees. A few studies focused on CEO elite education instead
of CEO education level (e.g., Bigley & Wiersema, 2002; Chikh & Filbien,
2011). To operationalize CEO formal education in terms of both quantity
and quality, we also included those studies. Again, the results with or
without CEO elite education essentially are identical.
CEO Prior Career Experience
According to our conceptualization of CEO prior career experience,
we operationalized it with variables that differentiated CEOs in terms
of their experience in major functions (e.g., throughput experience), with
particular strategic actions (e.g., acquisition experience), in particular jobs
2Following Aguinis, Pierce, Bosco, Dalton, and Dalton (2011), we prepared a table with
all of the codes used in this study. To conserve space, we do not include it in the paper, but
it is available upon request from the first author.
GANG WANG ET AL. 789
(e.g., as CEO of another firm), or in the industry (e.g., industry experience)
before becoming CEOs.3We began by aggregating all of the individual
measures into an overall measure of CEO prior career experience.
In addition to this broad measure of CEO prior career experience, we
also sorted the individual measures of this construct into more homoge-
nous and intelligible categories to capture different types of prior career
experience. Based on theory and prior empirical findings, we used two
independent categorization schemes to group the variables (see Figure 1).
In the first scheme, which is based on Hambrick and Mason’s (1984)
typology, we grouped the measures into four categories: (a) CEO prior
throughput experience, (b) CEO prior nonthroughput experience, (c) CEO
prior international experience, and (d) CEO prior general experience. As
noted above, CEO prior throughput experience refers to experience in
functional areas that implement or monitor the firm’s production pro-
cess. Examples include experience in functional areas such as production,
manufacturing, process engineering, and accounting.
CEO prior nonthroughput experience refers to experience in func-
tional areas that support the firm’s production process but are not directly
involved in it. Hambrick and Mason (1984) used the terms “output experi-
ence” (e.g., sales, product development) and “peripheral experience” (e.g.,
law) to refer to the variables that we place in this category. Following prior
researchers (e.g., Chen, 2008; Zhang & Rajagopalan, 2010), we grouped
output and peripheral experience together, because both are separate from
production.
CEO prior international experience refers service outside the firm’s
home country. Although not part of Hambrick and Mason’s (1984) typol-
ogy, firms confront international opportunities (e.g., exporting to foreign
customers) and threats (e.g., rising oil prices driven by foreign consump-
tion) even if they do not have international operations per se. Also, due
to globalization, international experience is more important today than it
was when UET was first published. Thus, we felt it important to include
this variable as a separate category.
CEO prior general experience captures experience unconnected to a
functional area (i.e., “career experiences other than the functional track”;
3Based on our conceptualization of CEO prior career experience, we excluded measures
in which CEO prior career experience in one functional area or position was compared with
that in other functional areas (e.g., Ocasio & Kim, 1999). For instance, Ocasio and Kim
(1999) created four dummy variables to represent different functional experiences and, in
turn, used a baseline group to make comparisons about the value of different experiences.
We excluded these measures, because establishing the relative merits of different career
experiences is not our primary focus. Likewise, summarizing UET research, Finkelstein
et al. (2009, p. 104) argued that there is “no evidence of a generally advantageous functional
profile for top executives.”
790 PERSONNEL PSYCHOLOGY
Hambrick & Mason, 1984, p. 199). Examples include experience as an
executive and experience as a CEO of another firm.
The second categorization scheme is mainly built on Qui´
nones, Ford,
and Teachout’s (1995) framework of work experience and guided us to
categorize the measures of CEO prior career experience into four cat-
egories: (a) CEO prior task experience; (b) CEO prior job experience;
(c) CEO prior organizational experience; and (d) CEO prior industry
experience.
Qui´
nones et al. (1995) proposed that work experience could be exam-
ined along two dimensions: level of specificity and measurement modes.
Level of specificity differentiates work experience based on the “specific
tasks, jobs, or organizations” in which it occurred (Qui´
nones et al., 1995,
p. 891). Measurement mode differentiates measures of work experience
based on amount (e.g., the number of times a task was completed), time
(e.g., how long the task has been performed), and type (e.g., the extent
to which the task is novel or complex). Because most measures of CEO
prior career experience were based on time, we decided to categorize the
specific measures based on their level of specificity. In addition, consis-
tent with Tesluk and Jacobs (1998), we added a fourth level of specificity:
industry experience.
CEO prior task experience captures experience on particular tasks,
such as production, product development, or international expansion.
Thus, we categorized experience in the functional areas and with par-
ticular strategic actions as CEO prior task experience.
CEO prior job experience captures experience in work roles that are
similar to the CEO position. Examples include experience as an executive
or as a CEO of another firm before taking the current CEO position. Such
positions are analogous to the CEO’s current job.
CEO prior organizational experience captures the CEO’s experience
in the focal organization before becoming its CEO. It includes tenure in
the focal organization before becoming its CEO and experience as the
focal organization’s heir apparent.
Finally, CEO prior industry experience captures experience in the
firm’s product or service sector. Thus, it includes measures of industry
experience before becoming the CEO.
CEO Positive Self-Concept
Based on our conceptualization of CEO positive self-concept, we oper-
ationalized this variable with indicators that closely reflect the core of the
construct, which refers to the extent to which people positively evaluate
themselves and their ability to influence their environments. Examples in-
clude CSE, hubris, need for achievement, and negative affectivity (reverse
GANG WANG ET AL. 791
scored; see Appendix 2 for more detail). We aggregated the variables into
a broad measure of CEO positive self-concept.
However, because the construct space for CEO positive self-concept
is broad, we grouped the individual measures into narrower and more
homogeneous constructs as well (see Figure 1). First, we constructed
a measure of CEO CSE that is narrower than the CEO positive self-
concept construct. Notably, CSE has also been studied in UET research
(Hiller & Hambrick, 2005; Simsek, 2007; Simsek, Heavey, & Veiga,
2010). Judge et al. (2003, p. 304) defined CSE as a “basic, fundamental
appraisal of one’s worthiness, effectiveness, and capability as a person.”
In particular, Judge and his colleagues have argued that four lower-tier
constructs indicate CSE: (a) self-esteem, (b) generalized self-efficacy, (c)
neuroticism (reversed), and (d) locus of control.
Thus, following Judge and his colleagues’ and UET researchers’ theo-
retical and empirical research, we grouped the direct measure of CSE and
the lower-tier indirect measures into the CEO CSE variable. Moreover,
given the high correlation between negative affectivity and neuroticism
(Watson, Wiese, Vaidya, & Tellegen, 1999), we also included negative af-
fectivity as a measure of CSE. In addition, we included related measures
involving hubris, narcissism, overconfidence, optimism, and positive psy-
chological traits (defined as “the extent to which individuals tend to be
hopeful, optimistic, and resilient in general”; Peterson, Walumbwa, By-
ron, & Myrowitz, 2009, p. 348). We included these measures in CSE,
because all of them reflect a person’s self-appraised “worthiness, effec-
tiveness, and capability” (Judge et al., 2003, p. 304). Although some are
not desirable traits, they nonetheless are very closely related to self-esteem
and generalized self-efficacy from CSE (Hiller & Hambrick, 2005).
Second, we constructed another variable, CEO positive self-regard,
which is narrower than either the CEO positive self-concept or the CEO
CSE variables. We based this construct on Finkelstein et al.’s (2009)
typology. Finkelstein et al. (2009, p. 82) sorted the “personality factors
. . . that have been subjects of considerable theory and research” into three
categories: (a) positive self-regard, (b) locus of control, and (c) charisma.
They also argued that CEO positive self-regard is a meta-construct that
includes four dimensions: “core self-evaluation, narcissism, hubris, and
overconfidence” (2009, p. 77). Thus, the CEO positive self-regard measure
is nearly equivalent to the CEO CSE measure above. The only difference
is that the measure of CEO positive self-regard does not include locus of
control. Because Finkelstein et al. analyzed CEO locus of control and CEO
charisma as separate constructs, we also considered these two variables to
be different from CEO positive self-regard and analyzed them separately.
Some of the variables that were included in the broad measure of CEO
positive self-concept did not fit into the constructs of CEO CSE and CEO
792 PERSONNEL PSYCHOLOGY
positive self-regard (or locus of control or charisma): (a) need for achieve-
ment,(b)positive affect,(c)risk orientation,(d)need for power, and (e)
promotion and prevention focus. Thus, following Chapman, Uggerslev,
Carroll, Piasentin, and Jones (2005), we considered these variables sepa-
rately when the number of primary studies was sufficient.
Finally, we categorized the specific measures of CEO personality traits
in the UET literature using the HEXACO taxonomy (Ashton & Lee, 2005,
2007): (a) honesty-humility, (b) emotionality, (c) extraversion, (d) consci-
entiousness, (e) agreeableness, and (f) openness to experience. In addition
to the specific measures included in the first two categorization schemes,
this grouping scheme also allowed us to include four of the five FFM
personality traits (i.e., agreeableness, conscientiousness, openness to ex-
perience, and extraversion) and tolerance for ambiguity that were excluded
when we focused on measures that reflect CEO positive self-concept. We
chose HEXACO over the FFM because research suggests that the honest-
humility factor in the HEXACO framework could contain the measures
reflecting CEO grandiose self-concept (e.g., hubris, overconfidence, nar-
cissism), and the other five factors of the HEXACO framework are almost
equivalent to the FFM factors (Ashton & Lee, 2005, 2007; Oh, Guay et al.,
2014, Oh, Le et al., 2014). We also considered a seventh variable, CEO
charisma, which falls outside HEXACO.
Humility contains measures of CEO narcissism, hubris, and overconfi-
dence. CEOs high in these measures were expected to be low on humility
and modesty (Finkelstein et al., 2009; Lee & Ashton, 2005; Li & Tang,
2010). We dropped the word “honesty” from the honesty-humility term,
because we lacked studies on CEO honesty.
Emotionality is HEXACO’s counterpart to the FFM’s neuroticism con-
struct. We grouped CEO emotional stability,CSE,self-efficacy,(internal)
locus of control,optimism,positive psychological traits,negative affectiv-
ity (reverse coded), and prevention focus (reverse coded) into this category.
Judge and colleagues have shown that locus of control and self-efficacy are
highly correlated with emotional stability and that CSE is a higher-order
factor indicated by emotional stability. Further, CEOs high in optimism
and positive psychological traits often believe that good things will hap-
pen, experience less anxiety or insecurity, and, thus, are low in neuroticism
(Costa & McCrae, 1992). In contrast, CEOs high in prevention focus are
concerned about security and responsibility (Higgins & Spiegel, 2004)
and, therefore, high in neuroticism.
Extraversion consists of positive affectivity,need for power,risk ori-
entation, and promotion focus in light of Watson and Clark’s (1997)
schematic model of extraversion with six specific facets (e.g., positive
affectivity, ascendance, venturesome).
GANG WANG ET AL. 793
Agreeableness includes measures of CEO agreeableness only. How-
ever, due to an insufficient number of primary studies (k<3), we could
not analyze this variable.
Conscientiousness contains two items, CEO conscientiousness and
need for achievement. We included the latter variable, as it is widely
regarded as a subdimension of conscientiousness (Barrick & Mount, 1991,
1993; Costa & McCrae, 1992; Zhao & Siebert, 2006).
Openness to experience includes openness to experience and toler-
ance for ambiguity. Prior research shows that tolerance for ambiguity was
highly correlated with openness to experience (e.g., Costa & McCrae,
1992). Thus, in line with prior researchers (Zhao & Seibert, 2006), we
assigned tolerance for ambiguity to openness to experience. Again, how-
ever, due to insufficient primary studies (k<3), we could not analyze this
variable.
Firm Strategic Actions
Scholars have measured firm strategic actions in several ways. Based
on prior research, we grouped the indicators of firm strategic actions into
10 Tier-1 categories: (a) acquisition, (b) international diversification, (c)
product diversification, (d) divestiture, (e) advertising intensity, (f) capital
investment, (g) firm risk taking, (h) leverage, (i) product innovation, and
(j) strategic change (see Appendix 3 for more detail). For example, the
acquisition category includes the number of acquisitions and the cost of
acquisitions. We aggregated these variables into a broad measure of firm
strategic actions.
Although the above measures broadly reflect firm strategic actions,
they capture unique aspects of the construct. Thus, to have a more fine-
grained picture, whenever possible (i.e., when kࣙ3), we analyzed each
of these 10 variables by themselves. Moreover, we also grouped the 10
variables into three Tier-2 categories: (a) strategic scope, (b) strategic risk,
and (c) strategic change (see Figure 1). Each category corresponds to a
specific purpose for engaging in firm strategic actions and also corresponds
to a body of literature in the management field.
Strategic scope refers to the composition of geographic and product
markets in which a firm competes (Holcomb, Holmes, & Hitt, 2006). Four
of the Tier-1 variables are closely related to strategic scope: acquisition,
divestiture, international diversification, and product diversification. All
four of these strategic actions are common ways for firms to add or subtract
new product and geographic markets to or from the firm’s existing strategic
scope.
Strategic risk refers to “strategic actions involving . . . research and de-
velopment (R&D) expenditures, capital investment, and long-term debt”
794 PERSONNEL PSYCHOLOGY
(Devers, McNamara, Wiseman, & Arrfelt, 2008, p. 550). Thus, it captures
the risks of innovation, capital spending, and leverage (i.e., long-term
debt). Supporting Devers et al. (2008), Miller and Bromiley (1990) found
that capital investment, leverage, and product innovation (in the form of
R&D) had large and unique factor loadings on the same strategic risk
factor. Thus, we used product innovation (e.g., R&D), capital investment,
and leverage to measure this construct. In addition, because advertising
intensity and firm risk taking bear a strong resemblance to the three mea-
sures used in Miller and Bromiley (1990), we also included these two
variables. These five Tier-1 variables affect a firm’s risk but do not nec-
essarily affect its scope (e.g., Devers et al., 2008; Miller & Bromiley,
1990).
Strategic change refers to “a difference in the form, quality, or state
over time in an organization’s alignment with its external environment”
(Rajagopalan & Spreitzer, 1997, p. 49). It includes the last Tier-1 firm
strategic action. We analyzed this Tier-1 variable by itself, because re-
search in this area is a unique theoretical domain (see Helfat & Martin,
2015; Rajagopalan & Spreitzer, 1997 for reviews). In addition, most of
the primary studies assessed strategic change using measures of strategic
scope and strategic risk (e.g., Chatterjee & Hambrick, 2007).
Future Firm Performance
Because it takes time for CEO characteristics to shape firm perfor-
mance (Hambrick & Mason, 1984), we argue that it was appropriate to
measure firm performance after the assessment of the CEO characteristics.
As such, we focused on future firm performance in relation to the CEO
characteristics as an appropriate dependent variable.
Following Hambrick and Mason (1984), we focused on firm perfor-
mance measures related to profitability, growth, and survival. The major-
ity of the primary studies operationalized future firm performance using
accounting-based measures of profitability, such as net income, return on
assets (ROA), or return on equity (ROE). These accounting-based mea-
sures align with the core tenets of UET (Agle, Nagarajan, Sonnenfeld,
& Srinivasan, 2006; Colbert et al., 2014).4In a few studies, future firm
performance was assessed with growth and survival. Growth measures
include sales growth and employee growth, and survival measures in-
clude bankruptcy and liquidation. Both growth and survival positively
4Market-based performance reflects investors’ evaluations of the firm’s future growth
prospects, not the actual or realized financial implications of their strategic actions per
se. In fact, market-based performance never appeared in Hambrick and Mason (1984) or
Hambrick (2007). Thus, we focused on accounting-based measures.
GANG WANG ET AL. 795
contribute to profitability (Baum, 1996). In this respect, profitability,
growth, and survival reflect the pursuit of similar objectives. In addi-
tion, efficiency was used in a few studies to measure future firm perfor-
mance. We included it because it contributes to profitability, growth, and
survival (Van de Ven, Hudson, & Schroeder, 1984). In most cases, the
results were essentially the same whether we focused only on profitability
or also included the three nonprofitability measures (i.e., growth, survival,
and efficiency).
Although market-based performance and concurrent firm performance
are not parts of our theoretical investigation, we meta-analyzed the rela-
tionships of the CEO characteristics and firm strategic actions with these
firm performance measures for informational purposes whenever possi-
ble (see Appendix 4). Market-based performance was operationalized
using measures like shareholder returns, earning per share, or Tobin’s Q.
Concurrent firm performance was measured with the above future firm
performance indicators but was assessed at the same time as the CEO
characteristics. In a few cases, perceived firm performance (i.e., subjec-
tive ratings of firm performance) was also used to measure concurrent
firm performance.
Meta-Analytic Techniques
We estimated true-score relationships among the variables using
Schmidt and Hunter’s (2014) random-effects meta-analysis methods.
We individually corrected each effect size for measurement error in
the predictor and outcome variables. Notably, most primary studies re-
lied on secondary data and did not report reliability (e.g., coefficient
alpha). In line with prior research (e.g., Bommer, Johnson, Rich, Pod-
sakoff, & MacKenzie, 1995; Combs, Liu, Hall, & Ketchen, 2006), we
replaced the missing reliability of those variables with .80. Following
Aytug, Rothstein, Zhou, and Kern’s (2012) suggestions, we performed
sensitivity analysis to see whether replacing missing reliabilities with
different values, such as 1 or .90, would result in significant differ-
ences. In most cases, the differences were negligible: the largest dif-
ference was a R2value of .004 (mean =.0004; SD =.0007). For meta-
analytic calculations, the Schmidt–Le meta-analysis package program
(VG6 Module–individual correction methods for correlations; Schmidt &
Le, 2004) was used. In addition prior researchers have argued that at least
three studies from two different researchers are needed to have a good
estimate of a relationship (e.g., Chambless & Hollon, 1998; Oh, Guay
et al., 2014) Thus, to obtain good empirical evidence, we set the
minimum cutoff number of primary studies for each meta-analysis to
three.
796 PERSONNEL PSYCHOLOGY
To ensure that each sample contributed only once to each meta-analytic
estimate, we checked that we did not duplicate correlations from the same
sample. In cases where primary studies reported multiple estimates of the
same relationship (e.g., CEO tenure with different yet related indicators
of future firm performance), we computed a composite correlation if the
necessary information was reported, and we used the mean across the
estimates otherwise.
We reported estimated true-score/corrected (rc) and observed/
uncorrected (r) mean correlations, the number of studies (k), combined
sample sizes (N), 80% credibility intervals (CVs; i.e., the variability in the
individual correlations across the studies), 95% confidence intervals (CIs;
i.e., the error band around corrected mean correlations), the percentage of
the total variance accounted for by statistical artifacts (VAR), and the chi-
square (Q) test for the homogeneity of corrected correlations (rc) across
studies.
Results
CEO Age and Firm Strategic Actions
Hypothesis 1 predicted that CEO age would be negatively related to
firm strategic actions. As Table 1 shows, the corrected mean correlation
between CEO age and firm strategic actions (rc=.01; k=71; N=
124,709) and its 95% CI [−.02, .03] indicate that CEO age was not
significantly related to the broad measure of firm strategic actions. A
similar pattern of insignificant relationship was observed when the broad
measure was broken into the three categories: strategic scope, strategic
risk, and strategic change. However, within the category of strategic scope,
CEO age had a significantly negative relationship with firm international
diversification (rc=−.05; k=4; N=1,779; 95% CI [−.10, −.01]);
and within the category of strategic risk, CEO age was significantly and
negatively related to firm risk taking (rc=−.18; k=3; N=16,646; 95%
CI [−.31, −.05]) and product innovation (rc=−.11; k=19; N=30,323;
95% CI [−.14, −.08]). Given that the 95% CIs of firm risk taking and
product innovation did not overlap with the 95% CI of the broad measure
of firm strategic actions, we conducted additional analyses by excluding
the two variables from the broad measure of firm strategic actions and from
strategic risk. As Table 1 shows, when the two variables were excluded,
CEO age had a significantly positive relationship with the broad measure
of firm strategic actions but an insignificant relationship with strategic
risk. In general, with a few exceptions, the above results failed to support
Hypothesis 1.
GANG WANG ET AL. 797
TABL E 1
Meta-Analytic Correlations Between CEO Age and Firm Strategic Actions
Varia b l e MR kN rr
cSDrc80% CV SErc95% CI VAR Q
Firm strategic actions .79\.72 71 124,709 .01 .01 .11 (−.13, .14) .01 (−.02, .03) 8 903.41∗∗
Strategic scope .78\.72 18 10,777 .03 .03 .09 (−.09, .15) .02 (−.02, .07) 24 73.59∗
Acquisition .80\.75 3 1,745 .04 .05 .07 (−.04, .13) .05 (−.04, .14) 38 7.86∗∗
International diversification .80\.80 4 1,779 −.04 −.05 .00 (−.05, −.05) .02 (−.10, −.01) 100 2.96
Product diversification .77\.72 10 6,119 .04 .04 .12 (−.11, .19) .04 (−.04, .12) 18 56.00∗∗
Strategic risk .80\.73 41 101,428 .00 .00 .10 (−.12, .13) .02 (−.03, .03) 7 628.56∗∗
Advertising intensity .80\.80 5 15,340 −.03 −.03 .05 (−.10, .03) .02 (−.08, .02) 16 31.72∗∗
Capital investment .80\.80 4 7,339 .03 .04 .07 (−.04, .13) .04 (−.03, .11) 15 26.07∗∗
Firm risk taking .80\.80 3 16,646 −.14 −.18 .12 (−.33, −.01) .07 (−.31, −.05) 2 156.00∗∗
Leverage .80\.80 27 88,855 .01 .02 .08 (−.08, .11) .02 (−.01, .05) 8 357.45∗∗
Product innovation .80\.77 19 30,323 −.09 −.11 .06 (−.19, −.04) .02 (−.14, −.08) 21 92.03∗∗
Strategic change .80\.68 17 15,444 .02 .03 .19 (−.21, .27) .05 (−.06, .12) 6 269.60∗
Firm strategic actions .80\.71 62 120,689 .02 .03 .09 (−.08, .15) .01 (.01, .06) 10 608.48∗∗
without firm risk taking
and product innovation
Strategic risk without .80\.78 32 97,994 .02 .02 .07 (−.07, .12) .01 (−.01, .05) 9 367.33∗∗
firm risk taking and
product innovation
Note. MR =mean reliability (predictor\criterion); k=number of effect sizes in each meta-analysis; N=combined sample size; r=sample-
size weighted mean uncorrected correlation; rc=estimated corrected mean correlation; SDrc=standard deviation of the estimated corrected mean
correlation; CV =credibility interval; SErc=estimated standard error for the corrected mean correlation; CI =confidence interval; VAR =percentage
of observed variance accounted for by statistical artifacts; Q=the chi-square-test for the homogeneity of corrected correlations (rc) across studies.
∗p<.05. ∗∗p<.01.
798 PERSONNEL PSYCHOLOGY
CEO Tenure and Firm Strategic Actions
Hypothesis 2 posited that CEO tenure would be negatively related
to firm strategic actions. The results in Table 2 show that CEO tenure
had a significantly negative relationship with the broad measure of firm
strategic actions (rc=−.04; k=116; N=161,261; 95% CI [−.06,
−.03]). Moreover, CEO tenure was significantly and negatively related to
strategic risk (rc=−.04; k=73; N=133,332; 95% CI [−.05, −.02]) and
strategic change (rc=−.06; k=20; N=22,640; 95% CI [−.11, −.01]).
Further scrutiny suggests that, although CEO tenure was not related to
strategic scope, it had a significant and negative relationship with product
diversification (rc=−.04; k=30; N=27,267; 95% CI [−.07, −.01]).
Because the 95% CI of acquisition did not overlap with that of the broad
measure of firm strategic actions, we did additional sensitivity analyses
by excluding this variable from the broad measure of strategic actions and
from strategic scope. The results in Table 2 indicate that with or without
this variable, the relationships of CEO tenure with the broad measure of
firm strategic actions and with strategic scope were essentially the same.
In summary, the above results largely supported Hypothesis 2 with some
exceptions.
CEO Formal Education and Firm Strategic Actions
Hypothesis 3 predicted that CEO formal education would be positively
associated with firm strategic actions. As Table 3 shows, CEO formal
education was positively related to the broad measure of firm strategic
actions (rc=.07; k=32; N=35,190; 95% CI [.05, .10]). In addition,
CEO formal education was positively related to all of the three categories
of firm strategic actions: strategic scope (rc=.11; k=7; N=3,617; 95%
CI [.07, .14]), strategic risk (rc=.10; k=12; N=12,758; 95% CI [.05,
.14]), and strategic change (rc=.07; k=8; N=3,644; 95% CI [.02, .12]).
However, there were some exceptions within strategic risk. CEO formal
education was not significantly related to leverage or product innovation.
Taken together, however, the results generally supported Hypothesis 3.
CEO Prior Career Experience and Firm Strategic Actions
Hypothesis 4 predicted that CEO prior career experience would be
positively related to firm strategic actions. The results in Table 4.1 reveal
that the broad measure of CEO prior career experience had a significant
and positive relationship with the broad measure of firm strategic actions
(rc=.09; k=37; N=33,182; 95% CI [.05, .13]). Moreover, CEO prior
GANG WANG ET AL. 799
TABL E 2
Meta-Analytic Correlations Between CEO Tenure and Firm Strategic Actions
Varia b l e MR kN rr
cSDrc80% CV SErc95% CI VAR Q
Firm strategic actions .79\.71 116 161,261 −.03 −.04 .07 (−.14, .05) .01 (−.06, −.03) 18 632.79∗∗
Strategic scope .80\.66 42 38,233 −.02 −.02 .08 (−.13, .09) .01 (−.05, .00) 22 187.08∗∗
Acquisition .80\.80 4 8,009 .02 .03 .05 (−.03, .09) .03 (−.02, .08) 26 15.47∗∗
International diversification .80\.76 12 6,634 .01 .01 .08 (−.08, .11) .03 (−.04, .06) 33 36.06∗∗
Product diversification .80\.68 30 27,267 −.03 −.04 .08 (−.14, .06) .02 (−.07, −.01) 24 122.68∗∗
Strategic risk .79\.76 73 133,332 −.03 −.04 .06 (−.11, .04) .01 (−.05, −.02) 20 367.58∗∗
Advertising intensity .80\.80 9 22,676 .00 .00 .02 (−.02, .03) .01 (−.02, .02) 64 14.11
Capital investment .77\.80 10 10,383 .01 .01 .12 (−.15, .17) .04 (−.07, .09) 9 110.10∗∗
Firm risk taking .79\.79 6 1,806 −.06 −.07 .00 (−.07, −.07) .02 (−.12, −.03) 100 5.53
Leverage .80\.80 39 100,715 −.03 −.04 .07 (−.12, .05) .01 (−.06, −.01) 12 333.48∗∗
Product innovation .79\.73 37 43,728 −.03 −.04 .07 (−.13, .05) .01 (−.06, −.01) 22 169.19∗∗
Strategic change .80\.74 20 22,640 −.04 −.06 .11 (−.20, .07) .02 (−.11, −.01) 13 157.10∗∗
Firm strategic actions .79\.72 115 160,551 −.03 −.04 .06 (−.11, .04) .01 (−.05, −.02) 18 644.86∗∗
without acquisition
Strategic scope .79\.69 38 31,445 −.02 −.03 .09 (−.14, .08) .02 (−.06, −.00) 23 162.04∗∗
without acquisition
Note. MR =mean reliability (predictor\criterion); k=number of effect sizes in each meta-analysis; N=combined sample size; r=sample-
size weighted mean uncorrected correlation; rc=estimated corrected mean correlation; SDrc=standard deviation of the estimated corrected mean
correlation; CV =credibility interval; SErc=estimated standard error for the corrected mean correlation; CI =confidence interval; VAR =percentage
of observed variance accounted for by statistical artifacts; Q =the chi-square-test for the homogeneity of corrected correlations (rc) across studies.
∗p<.05. ∗∗p<.01.
800 PERSONNEL PSYCHOLOGY
TABL E 3
Meta-Analytic Correlations Between CEO Formal Education and Firm Strategic Actions
Varia b l e MR kN rr
cSDrc80% CV SErc95% CI VAR Q
Firm strategic actions .78\.71 32 35,190 .05 .07 .06 (−.01, .15) .01 (.05, .10) 31 104.88∗∗
Strategic scope .80\.80 7 3,617 .08 .11 .01 (.10, .11) .02 (.07, .14) 98 7.11
International diversification .80\.80 4 2,894 .08 .10 .03 (.06, .13) .02 (.05, .14) 75 5.33
Product diversification .80\.80 3 723 .11 .14 .00 (.14, .14) .04 (.07, .21) 100 1.04
Strategic risk .74\.73 12 12,758 .06 .10 .08 (−.01, .20) .02 (.05, .14) 25 48.36∗∗
Leverage .70\.80 8 10,792 .03 .04 .09 (−.07, .15) .03 (−.03, .10) 16 50.97∗∗
Product innovation .80\.74 5 4,756 .04 .05 .10 (−.08, .18) .05 (−.05, .14) 15 33.23∗∗
Strategic change .77\.73 8 3,644 .06 .07 .05 (.01, .13) .02 (.02, .12) 63 12.66∗
Note. MR =mean reliability (predictor\criterion); k=number of effect sizes in each meta-analysis; N=combined sample size; r=sample-
size weighted mean uncorrected correlation; rc=estimated corrected mean correlation; SDrc=standard deviation of the estimated corrected mean
correlation; CV =credibility interval; SErc=estimated standard error for the corrected mean correlation; CI =confidence interval; VAR =percentage
of observed variance accounted for by statistical artifacts; Q=the chi-square-test for the homogeneity of corrected correlations (rc) across studies.
∗p<.05. ∗∗p<.01.
GANG WANG ET AL. 801
TABL E 4 . 1
Meta-Analytic Correlations Between CEO Prior Career Experience (Broad Construct) and Firm Strategic Actions
Varia b l e MR kN rr
cSDrc80% CV SErc95% CI VAR Q
Firm strategic actions .75\.66 37 33,182 .06 .09 .13 (−.07, .26) .02 (.05, .13) 13 293.27∗∗
Strategic scope .77\.69 18 13,453 .07 .07 .16 (−.13, .27) .04 (.00, .15) 9 201.30∗∗
Acquisition .77\.69 7 8,298 .07 .07 .15 (−.14, .18) .06 (−.05, .19) 7 106.37∗∗
Divestiture .80\.80 3 1,432 .03 .04 .00 (.04, .04) .03 (−.01, .09) 100 0.17
International diversification .69\.80 5 3,287 .24 .35 .11 (.20, .49) .05 (.24, .45) 19 26.22∗∗
Product diversification .80\.72 9 7,814 −.01 .01 .07 (−.08, .10) .03 (−.04, .06) 36 24.77∗∗
Strategic risk .72\.80 15 18,421 .07 .10 .08 (−.01, .20) .02 (.05, .14) 17 88.17∗∗
Leverage .73\.80 9 16,491 .04 .06 .02 (.04, .08) .01 (.04, .08) 80 11.30
Product innovation .68\.66 10 9,329 .16 .23 .11 (.09, .37) .04 (.16, .30) 13 76.42∗∗
Strategic change .80\.72 10 4,657 .04 .05 .09 (−.06, .16) .03 (−.01, .11) 33 30.44∗∗
Firm strategic actions without .76\.69 29 29,922 .03 .04 .08 (−.07, .15) .02 (.00, .07) 20 143.59∗∗
international diversification
and product innovation
Strategic scope without .76\.68 14 11,615 .04 .04 .13 (−.07, .23) .04 (−.03, .11) 11 124.62∗∗
international diversification
Strategic risk without .73\.80 9 16,491 .07 .11 .06 (.03, .18) .02 (.06, .15) 21 42.31∗∗
product innovation
Note. MR =mean reliability (predictor\criterion); k=number of effect sizes in each meta-analysis; N=combined sample size; r=sample-
size weighted mean uncorrected correlation; rc=estimated corrected mean correlation; SDrc=standard deviation of the estimated corrected mean
correlation; CV =credibility interval; SErc=estimated standard error for the corrected mean correlation; CI =confidence interval; VAR =percentage
of observed variance accounted for by statistical artifacts; Q=the chi-square-test for the homogeneity of corrected correlations (rc) across studies.
∗p<.05. ∗∗p<.01.
802 PERSONNEL PSYCHOLOGY
career experience was significantly related to two of the three categories:
strategic scope (rc=.07; k=18; N=13,453; 95% CI [.00, .15]) and
strategic risk (rc=.10; k=15; N=18,421; 95% CI [.05, .14]). However,
within strategic scope, CEO prior career experience was not significantly
related to acquisition, divestiture, or product diversification. In addition,
more detailed examination divulges that the 95% CIs of international di-
versification and product innovation did not overlap with that of the broad
measure of firm strategic actions or that of any other specific measures
of firm strategic actions. To assess the influence of these variables, we
excluded them from the broad measure of firm strategic actions, from
strategic scope, and from strategic risk. The results indicate that the re-
lationship between CEO prior career experience and the broad measure
of firm strategic actions remains positive when product innovation and
international diversification were excluded. In addition, the relationship
between CEO prior career experience and strategic risk remains positive
without product innovation, whereas the relationship between CEO prior
career experience and strategic scope was insignificant when international
diversification was excluded from strategic scope. In summary, the above
results generally supported Hypothesis 4 with some exceptions.
In addition, to gain a more fine-grained picture, we examined the
smaller categories of CEO prior career experience described earlier. First,
we considered CEO throughput experience, CEO nonthroughput experi-
ence, CEO international experience, and CEO general experience. The
results in Table 4.2 show that the first three of these variables were signifi-
cantly and positively related to the broad measure of firm strategic actions.
The small number of primary studies did not allow us to break down these
particular results further. However, the number of primary studies did
allow us to analyze CEO general experience further. We found that, al-
though this variable was not related to the broad measure of firm strategic
actions, it had a significant and positive relationship with strategic risk (rc
=.04; k=12; N=10,277; 95% CI [.00, .08]).
Alternatively, as shown in Table 4.3, when the specific measures of
CEO prior career experience were regrouped according to Qui´
nones et al.’s
(1995) typology, only CEO task experience had a significant and positive
relationship with the broad measure of firm strategic actions. It was also
positively related to two categories of firm strategic actions: strategic
scope and strategic risk. In addition, we broke down the specific measures
of firm strategic actions according to whether or not they directly matched
with CEO prior task experience. Sample matches include CEO prior inter-
national experience and firm international diversification (e.g., Herrmann,
2002) and CEO prior R&D functional experience and firm new product
development and R&D investment (e.g., Deeds, DeCarolis, & Coombs,
2000). As Table 4.3 shows, CEO task experience had a much stronger
GANG WANG ET AL. 803
TABL E 4 . 2
Meta-Analytic Correlations Between CEO Prior Career Experience (Disaggregated According to Functional Background) and Firm
Strategic Actions
Varia b l e MR kN r r
cSDrc80% CV SErc95% CI VAR Q
CEO prior throughput experience
Firm strategic actions .80\.72 9 7,387 .05 .06 .03 (.02, .09) .01 (.03, .09) 75 12.03
CEO prior non-throughput (output and peripheral) experience
Firm strategic actions .80\.51 11 6,983 .04 .16 .21 (−.10, .43) .06 (.04, .29) 14 75.96∗∗
CEO prior international experience
Firm strategic actions .80\.76 7 9,792 .17 .21 .07 (.13, .30) .03 (.16, .26) 19 36.02∗∗
CEO prior general experience
Firm strategic actions .77\.69 21 4,551 .00 .00 .03 (−.04, .04) .02 (−.03, .03) 68 30.86
Strategic scope .80\.72 7 7,334 −.03 −.04 .09 (−.16, .08) .04 (−.12, .03) 15 47.60∗∗
Strategic risk .75\.66 12 10,277 .02 .04 .06 (−.04, .12) .02 (.00, .08) 42 28.79∗∗
Strategic change .80\.75 5 1,003 .02 .02 .11 (−.12, .16) .06 (−.09, .13) 41 12.3∗
Note. MR =mean reliability (predictor\criterion); k=number of effect sizes in each meta-analysis; N=combined sample size; r=sample-
size weighted mean uncorrected correlation; rc=estimated corrected mean correlation; SDrc=standard deviation of the estimated corrected mean
correlation; CV =credibility interval; SErc=estimated standard error for the corrected mean correlation; CI =confidence interval; VAR =percentage
of observed variance accounted for by statistical artifacts; Q=the chi-square-test for the homogeneity of corrected correlations (rc) across studies.
∗p<.05. ∗∗p<.01.
804 PERSONNEL PSYCHOLOGY
TABL E 4 . 3
Meta-Analytic Correlations Between CEO Prior Career Experience (Disaggregated according to Level of Specificity) and Firm
Strategic Actions
Varia b l e MR kN rr
cSDrc80% CV SErc95% CI VAR Q
CEO prior industry experience
Firm strategic actions .80\.78 5 1,206 .00 −.01 .00 (−.01, −.01) .03 (−.06, .05) 100 4.51
CEO prior organizational experience
Firm strategic actions .72\.71 4 4,585 .01 .01 .05 (−.06, .07) .03 (−.05, .06) 37 10.72∗∗
CEO prior job experience
Firm strategic actions .66\.73 8 8,193 .00 .00 .00 (.00, .00) .01 (−.02, .02) 100 7.58
CEO prior task experience
Firm strategic actions .78\.64 22 22,211 .09 .10 .14 (−.07, .28) .03 (.04, .16) 8 268.86∗∗
Strategic scope .75\.69 11 8,812 .10 .23 .22 (−.05, .50) .07 (.10, .36) 8 134.94∗∗
Strategic risk .80\.63 13 14,096 .08 .11 .08 (.02, .21) .02 (.07, .16) 21 62.25∗∗
CEO prior task experience
Strategic actions that .80\.64 13 5,694 .16 .24 .14 (.06, .42) .04 (16., .32) 18 70.73∗∗
directly match with CEO
prior task experience
Strategic actions that do not .80\.64 14 19,192 .07 .11 .09 (−.01, .22) .02 (06., .15) 16 88.70∗∗
directly match with CEO
prior task experience
Note. MR =mean reliability (predictor\criterion); k=number of effect sizes in each meta-analysis; N=combined sample size; r=sample-
size weighted mean uncorrected correlation; rc=estimated corrected mean correlation; SDrc=standard deviation of the estimated corrected mean
correlation; CV =credibility interval; SErc=estimated standard error for the corrected mean correlation; CI =confidence interval; VAR =percentage
of observed variance accounted for by statistical artifacts; Q=the chi-square-test for the homogeneity of corrected correlations (rc) across studies.
∗p<.05. ∗∗p<.01.
GANG WANG ET AL. 805
positive relationship with firm strategic actions when there was a direct
match (rc=.24; k=13; N=5,694; 95% CI [.16, .32]) than when there
was not a direct match (rc=.11; k=14; N=19,192; 95% CI [.06, .15]).
CEO Positive Self-Concept and Firm Strategic Actions
Hypothesis 5 predicted that CEO positive self-concept would be posi-
tively related to firm strategic actions. The results in Table 5.1 demonstrate
that the broad measure of CEO positive self-concept was positively re-
lated to the broad measure of firm strategic actions (rc=.10; k=32; N
=22,923; 95% CI [.05, .14]). However, CEO positive self-concept was
only positively associated with the category of strategic risk (rc=.14; k
=13; N=10,850; 95% CI [.08, .21]). Further, within strategic risk, CEO
positive self-concept was particularly positively related to firm risk taking.
In general, the results supported Hypothesis 5 with some exceptions.
In addition, as shown in Table 5.2, we disaggregated the broad mea-
sure of CEO positive self-concept into narrower constructs. We found that
CEO CSE, charisma, and need for achievement all were significantly and
positively related to the broad measure of firm strategic actions. Specifi-
cally, however, CEO CSE was significantly and positively related only to
strategic risk. Moreover, within strategic risk, CEO CSE was specifically
positively related to firm risk taking. Although CEO CSE was not related
to strategic scope, it was significantly and positively related to acquisition.
Alternatively, as illustrated in Table 5.3, when the broad measure CEO
positive self-concept was disaggregated according to Finkelstein et al.’s
(2009) typology, CEO positive self-regard was positively associated with
the broad measure of firm strategic actions, whereas CEO locus of control
was not (the results for CEO charisma and need for achievement were
reported above). Like CEO CSE, CEO positive self-regard was positively
related to strategic risk as well as acquisitions, firm risk taking, and product
innovation.
Finally, Table 5.4 shows the results for the HEXACO framework.
CEO humility, emotionality, extraversion, and charisma were all signif-
icantly related to firm strategic actions, but CEO conscientiousness was
not. Specifically, CEOs’ grandiose self-concept (i.e., lack of humility)
was positively related to strategic risk as well as firm risk taking and
acquisition.
Firm Strategic Actions and Future Firm Performance
Hypothesis 6 predicted that firm strategic actions would be positively
related to future firm performance. As Table 6.1 presents, the broad
806 PERSONNEL PSYCHOLOGY
TABL E 5 . 1
Meta-Analytic Correlations Between CEO Positive Self-Concept (Broad Construct) and Firm Strategic Actions
Varia b l e MR kN rr
cSDrc80% CV SErc95% CI VAR Q
Firm strategic actions .73\.70 32 22,923 .06 .10 .12 (−.06, .25) .02 (.05, .14) 18 176.84∗∗
Strategic scope .64\.65 12 10,172 .04 .04 .10 (−.09, .17) .03 (−.02, .10) 20 60.21∗∗
Acquisition .62\.64 6 3,889 .07 .13 .19 (−.11, .37) .08 (−.02, .28) 14 41.66∗∗
Product diversification .67\.80 7 6,779 .02 .03 .06 (−.06, .11) .03 (−.03, .08) 30 23.27∗∗
Strategic risk .73\.72 13 10,850 .11 .14 .11 (.00, .29) .03 (.08, .21) 17 77.64∗∗
Firm risk taking .76\.72 6 5,531 .14 .18 .08 (.08, .28) .04 (.11, .25) 20 29.56∗∗
Leverage .81\.80 4 7,155 .03 .04 .08 (−.07, .14) .04 (−.05, .12) 11 36.80∗∗
Product innovation .70\.81 7 6,184 .08 .09 .17 (−.13, .30) .07 (−.04, .21) 7 97.64∗∗
Strategic change .81\.58 11 8,361 .05 .08 .18 (−.15, .32) .06 (−.03, .19) 11 102.60∗∗
Note. MR =mean reliability (predictor\criterion); k=number of effect sizes in each meta-analysis; N=combined sample size; r=sample-
size weighted mean uncorrected correlation; rc=estimated corrected mean correlation; SDrc=standard deviation of the estimated corrected mean
correlation; CV =credibility interval; SErc=estimated standard error for the corrected mean correlation; CI =confidence interval; VAR =percentage
of observed variance accounted for by statistical artifacts; Q=the chi-square-test for the homogeneity of corrected correlations (rc) across studies.
∗p<.05. ∗∗p<.01.
GANG WANG ET AL. 807
TABL E 5 . 2
Meta-Analytic Correlations Between CEO Positive Self-Concept (Disaggregated With Reference to Research on Core
Self-Evaluations) and Firm Strategic Actions
Varia b l e MR kN rr
cSDrc80% CV SErc95% CI VAR Q
CEO core self-evaluations
Firm strategic actions .71\.68 25 19,197 .06 .09 .13 (−.08, .25) .03 (.03, .14) 14 176.18∗∗
Strategic scope .65\.53 9 6,744 .04 .04 .11 (−.10, .18) .04 (−.03, .12) 18 50.29∗∗
Acquisition .71\.59 5 1,367 .11 .12 .25 (−.20, .44) .11 (.00, .07) 11 44.73∗∗
Product diversification .64\.80 6 5,977 .03 .04 .03 (−.00, .08) .02 (−.10, .35) 62 9.66
Strategic risk .70\.70 9 10,552 .08 .10 .09 (−.02, .22) .03 (.04, .17) 15 59.16∗∗
Firm risk taking .75\.76 5 5,480 .14 .18 .08 (.08, .28) .04 (.11, .26) 17 28.91∗∗
Leverage .84\.80 4 7,155 .03 .04 .08 (−.07, .14) .04 (−.05, .12) 11 36.93∗∗
Product innovation .64\.80 4 5,937 .07 .08 .17 (−.14, .30) .09 (−.09, .25) 4 62.25∗∗
Strategic change .75\.68 10 7,559 .02 .04 .16 (−.17, .25) .05 (−.06, .15) 15 92.41∗∗
CEO charisma
Firm strategic actions .75\.51 3 1,045 .06 .11 .07 (.02, .20) .05 (.01, .21) 51 5.89
CEO need for achievement
Firm strategic actions .81\.83 3 271 .14 .17 .00 (.17, .17) .06 (.05, .29) 100 .99
Note. MR =mean reliability (predictor\criterion); k=number of effect sizes in each meta-analysis; N=combined sample size; r=sample-
size weighted mean uncorrected correlation; rc=estimated corrected mean correlation; SDrc=standard deviation of the estimated corrected mean
correlation; CV =credibility interval; SErc=estimated standard error for the corrected mean correlation; CI =confidence interval; VAR =percentage
of observed variance accounted for by statistical artifacts; Q=the chi-square-test for the homogeneity of corrected correlations (rc) across studies.
∗p<.05. ∗∗p<.01.
808 PERSONNEL PSYCHOLOGY
TABL E 5 . 3
Meta-Analytic Correlations Between CEO Positive Self-Concept (Disaggregated With Reference to Finkelstein et al. 2009) and Firm
Strategic Actions
Varia b l e MR kN rr
cSDrc80% CV SErc95% CI VAR Q
CEO positive self-regard
Firm strategic actions .71\.65 20 18,819 .06 .09 .13 (−.08, .26) .03 (.03, .15) 12 166.76∗∗
Strategic scope .66\.46 7 6,660 .04 .04 .11 (−.10, .18) .04 (−.05, .12) 14 49.20∗∗
Acquisition .71\.59 5 1,367 .11 .12 .25 (−.20, .44) .11 (.00, .07) 11 44.73∗∗
Product diversification .63\.80 5 5,938 .03 .04 .03 (−.01, .08) .02 (−.00, .08) 56 8.99
Strategic risk .70\.70 9 10,552 .08 .10 .09 (−.02, .22) .03 (.04, .17) 15 59.16∗∗
Firm risk taking .75\.76 5 5,480 .14 .18 .08 (.08, .28) .04 (.11, .26) 17 28.91∗∗
Leverage .84\.80 4 7,155 .03 .04 .08 (−.07, .14) .04 (−.05, .12) 11 36.93∗∗
Product innovation .64\.64 3 5,026 .04 .04 .15 (−.15, .23) .09 (−.13, .21) 5 62.25∗∗
Strategic change .73\.63 7 7,265 .02 .06 .17 (−.16, .27) .06 (−.07, .18) 12 57.58∗∗
CEO locus of control
Firm strategic actions .71\.80 5 378 .02 .02 .12 (−.13, .17) .07 (−.13, .16) 62 8.07
CEO charisma
Firm strategic actions .75\.51 3 1,045 .06 .11 .07 (.02, .20) .05 (.01, .21) 51 5.89
CEO need for achievement
Firm strategic actions .81\.83 3 271 .14 .17 .00 (.17, .17) .06 (.05, .29) 100 .99
Note. MR =mean reliability (predictor\criterion); k=number of effect sizes in each meta-analysis; N=combined sample size; r=sample-
size weighted mean uncorrected correlation; rc=estimated corrected mean correlation; SDrc=standard deviation of the estimated corrected mean
correlation; CV =credibility interval; SErc=estimated standard error for the corrected mean correlation; CI =confidence interval; VAR =percentage
of observed variance accounted for by statistical artifacts; Q=the chi-square-test for the homogeneity of corrected correlations (rc) across studies.
∗p<.05. ∗∗p<.01.
GANG WANG ET AL. 809
TABL E 5 . 4
Meta-Analytic Correlations Between CEO Personality Traits (Disaggregated With Reference to the HEXACO Six-Factor Personality
Framework) and Firm Strategic Actions
Varia b l e MR kN r r
cSDrc80% CV SErc95% CI VAR Q
CEO (low in) humility (grandiose self-concept)
Firm strategic actions .74\.56 14 16,889 .06 .09 .12 (−.06, .25) .03 (.03, .16) 12 119.05∗∗
Strategic scope .66\.46 7 6,660 .04 .04 .11 (−.10, .18) .04 (−.05, .12) 14 49.20∗∗
Acquisition .71\.55 5 1,367 .11 .12 .25 (−.20, .44) .11 (.00, .07) 11 44.73∗∗
Product diversification .63\.80 5 5,938 .03 .04 .03 (−.01, .08) .02 (−.00, .08) 56 8.99
CEO (low in) humility (grandiose self-concept)
Strategic risk .71\.70 7 10,369 .08 .10 .09 (−.02, .22) .04 (.03, .17) 12 56.94∗∗
Firm risk taking .80\.80 3 5,297 .14 .18 .08 (.08, .29) .05 (.08, .28) 11 28.37∗∗
Leverage .81\.71 4 7,155 .03 .04 .08 (−.07, .14) .04 (−.05, .12) 11 36.93∗∗
Product innovation .62\.68 4 5,937 .07 .10 .08 (−.01, .20) .04 (.01, .18) 17 23.13∗∗
Strategic change .80\.63 3 5,518 .02 .05 .09 (−.07, .17) .06 (−.06, .16) 19 15.46∗∗
CEO (low in) emotionality
Firm strategic actions .74\.78 12 4,830 .06 .07 .11 (−.07, .20) .03 (.00, .13) 25 48.16∗∗
Strategic change .80\.79 7 2,041 .03 .04 .17 (−.15, .27) .07 (−.09, .17) 16 42.75∗∗
CEO extraversion
Firm strategic actions .77\.79 6 4,150 .06 .08 .08 (−.02, .18) .04 (.01, .15) 26 23.10∗∗
CEO conscientiousness
Firm strategic actions .80\.83 4 466 −.01 −.01 .19 (−.26, .23) .11 (−.23, .20) 26 15.47∗∗
CEO charisma
Firm strategic actions .75\.51 3 1,045 .06 .11 .07 (.02, .20) .05 (.01, .21) 51 5.89
Note. MR =mean reliability (predictor\criterion); k=number of effect sizes in each meta-analysis; N=combined sample size; r=sample-
size weighted mean uncorrected correlation; rc=estimated corrected mean correlation; SDrc=standard deviation of the estimated corrected mean
correlation; CV =credibility interval; SErc=estimated standard error for the corrected mean correlation; CI =confidence interval; VAR =percentage
of observed variance accounted for by statistical artifacts; Q=the chi-square-test for the homogeneity of corrected correlations (rc) across studies.
∗p<.05. ∗∗p<.01.
810 PERSONNEL PSYCHOLOGY
TABL E 6 . 1
Meta-Analytic Correlations Between Firm Strategic Actions and Future Firm Performance
Varia b l e MR kN r r
cSDrc80% CV SErc95% CI VAR Q
Firm strategic actions
Future firm performance .68\.76 17 8,632 .09 .14 .14 (−.04, .32) .04 (.07, .21) 16 107.83∗∗
Profitability .68\.76 16 8,512 .09 .14 .14 (−.04, .31) .04 (.07, .21) 16 102.47∗∗
Strategic scope
Future firm performance .80\.72 5 1,714 .02 .03 .00 (.03, .03) .03 (−.01, .11) 100 .45
Product diversification
Future firm performance .80\.72 5 1,714 .02 .03 .00 (.03, .03) .03 (−.01, .11) 100 .45
Strategic risk
Future firm performance .80\.69 8 3,511 −.01 −.01 .08 (−.11, .09) .03 (−.08, .05) 44 18.16∗
Advertising spending
Future firm performance .80\.72 4 2,233 .07 .08 .11 (−.06, .23) .06 (−.04, .20) 19 20.52∗∗
Capital investment
Future firm performance .80\.73 5 2,832 −.07 −.09 .00 (−.09, −.09) .02 (−.13, −.06) 100 4.79
Leverage
Future firm performance .80\.83 3 14,726 .08 .10 .02 (.07, .13) .01 (.07, .13) 43 6.92∗
Product innovation
Future firm performance .80\.73 5 2,420 .04 .04 .10 (−.08, .16) .05 (−.05, .14) 28 17.56∗∗
Strategic change
Future firm performance .78\.80 6 4,299 .20 .24 .13 (.07, .41) .06 (.13, .35) 10 58.02∗∗
Firm strategic actions without capital investment
Future firm performance .69\.74 17 8,632 .11 .16 .15 (−.03, .35) .04 (.09, 23) 14 119.84∗∗
Strategic risk without capital investment
Future firm performance .64\.77 7 2,912 .05 .06 .14 (−.11, .24) .06 (−.04, 17) 23 30.67∗∗
Note. MR =mean reliability (predictor\criterion); k=number of effect sizes in each meta-analysis; N=combined sample size; r=sample-
size weighted mean uncorrected correlation; rc=estimated corrected mean correlation; SDrc=standard deviation of the estimated corrected mean
correlation; CV =credibility interval; SErc=estimated standard error for the corrected mean correlation; CI =confidence interval; VAR =percentage
of observed variance accounted for by statistical artifacts; Q=the chi-square-test for the homogeneity of corrected correlations (rc) across studies.
∗p<.05. ∗∗p<.01.
GANG WANG ET AL. 811
measure of firm strategic actions was positively related to the broad mea-
sure of future firm performance (rc=.14; k=17; N=8,632; 95% CI
[.07, .21]). In addition, firm strategic actions also had a significant and
positive relationship with the narrower measure, future firm profitability
(rc=.14; k=16; N=8,512; 95% CI [.07, .21]). However, only one
of the three categories of firm strategic actions—strategic change—was
positively related to future firm performance (rc=.24; k=6; N=4,299;
95% CI [.13, .35]). Within strategic risk, however, capital investment had
a negative relationship with future firm performance (rc=−.09; k=5; N
=2,832; 95% CI [−.13, −.06]). Because the 95% CI of capital investment
did not overlap with the 95% CI of the broad measure of firm strategic ac-
tions nor with the 95% CIs of the other specific measures of firm strategic
actions, we performed a sensitivity analysis by excluding capital invest-
ment. As Table 6.1 shows, the results were essentially the same with and
without this variable. Therefore, in sum, the results generally supported
Hypothesis 6 with some exceptions.
CEO Characteristics and Future Firm Performance
Hypothesis 7 posited that CEO age (7a) and tenure (7b) would be
negatively associated with future firm performance, whereas CEO formal
education (7c), prior career experience (7d), and positive self-concepts
(7e) would be positively related to future firm performance. The results in
Table 6.2 indicate that CEO age and tenure were positively associated with
future firm performance in general and profitability in particular. Thus,
Hypotheses 7a and 7b were not supported. Consistent with Hypothesis 7c,
CEO formal education was positively related to future firm performance
including profitability. As Table 6.3 summarizes, when broadly measured,
CEO prior career experience had a positive relationship with the broad
measure of future firm performance but not with the narrow measure,
future firm profitability. Thus, Hypothesis 7d received mixed support.
Further, as Tables 6.4 and 6.5 show, when the broad measure of CEO prior
career experience was broken down into subcategories, only CEO general
career experience and CEO prior industry experience were positively
related to the broad measure of future firm performance.
Finally, Table 6.6 shows that the broad construct of CEO positive self-
concept was not significantly related to future firm performance in general
nor to future firm profitability or growth in particular. Thus, Hypothesis
7e was not supported. Moreover, as shown in Table 6.7, the narrower con-
structs of CEO CSE and CEO positive self-regard also were not related
to any of the future firm performance measures. In fact, only charisma
was positively related to future firm performance. Further, Table 6.8
demonstrates that of the variables in the HEXACO framework, only CEO
812 PERSONNEL PSYCHOLOGY
TABL E 6 . 2
Meta-Analytic Correlations of CEO Age, Tenure, and Formal Education With Future Firm Performance
Varia b l e MR kN rr
cSDrc80% CV SErc95% CI VAR Q
CEO age
Future firm performance .80\.80 24 14,009 .05 .06 .08 (−.04, .17) .02 (.03, .10) 30 79.73∗∗
Profitability .80\.80 21 13,662 .05 .07 .07 (−.03, .16) .02 (.03, .11) 30 69.08∗∗
CEO tenure
Future firm performance .75\.74 29 18,213 .05 .08 .05 (.01, .15) .01 (.05, .10) 52 56.03∗∗
Profitability .75\.74 28 18,187 .05 .08 .05 (.01, .15) .01 (.05, .10) 50 55.63∗∗
CEO formal education
Future firm performance .80\.74 13 3,527 .04 .05 .03 (.01, .09) .02 (.01, .09) 88 14.77
Profitability .80\.74 11 3,237 .04 .05 .03 (.01, .09) .02 (.01, .09) 88 12.49
Note. MR =mean reliability (predictor\criterion); k=number of effect sizes in each meta-analysis; N=combined sample size; r=sample-
size weighted mean uncorrected correlation; rc=estimated corrected mean correlation; SDrc=standard deviation of the estimated corrected mean
correlation; CV =credibility interval; SErc=estimated standard error for the corrected mean correlation; CI =confidence interval; VAR =percentage
of observed variance accounted for by statistical artifacts; Q=the chi-square-test for the homogeneity of corrected correlations (rc) across studies.
∗p<.05. ∗∗p<.01.
GANG WANG ET AL. 813
TABL E 6 . 3
Meta-Analytic Correlations Between CEO Prior Career Experience (Broad Construct) and Future Firm Performance
Varia b l e MR kN rr
cSDrc80% CV SErc95% CI VAR Q
CEO prior career experience
Future firm performance .74\.76 14 6,957 .06 .08 .12 (−.07, .23) .03 (.01, .14) 21 65.18∗∗
Profitability .73\.81 12 6,645 .01 .02 .08 (−.08, .12) .03 (−.03, .07) 33 36.26∗∗
Note. MR =mean reliability (predictor\criterion); k=number of effect sizes in each meta-analysis; N=combined sample size; r=sample-
size weighted mean uncorrected correlation; rc=estimated corrected mean correlation; SDrc=standard deviation of the estimated corrected mean
correlation; CV =credibility interval; SErc=estimated standard error for the corrected mean correlation; CI =confidence interval; VAR =percentage
of observed variance accounted for by statistical artifacts; Q=the chi-square-test for the homogeneity of corrected correlations (rc) across studies.
∗p<.05. ∗∗p<.01.
814 PERSONNEL PSYCHOLOGY
TABL E 6 . 4
Meta-Analytic Correlations Between CEO Prior Career Experience (Disaggregated According to Functional Background) and Future
Firm Performance
Varia b l e MR kN rr
cSDrc80% CV SErc95% CI VAR Q
CEO prior non-throughput(output and peripheral) experience
Future firm performance .80\.76 4 953 .02 .03 .07 (−.07, .12) .05 (−.07, .12) 55 7.24
CEO prior general experience
Future firm performance .77\.76 10 6,205 .06 .08 .11 (−.07, .22) .04 (.01, .15) 19 53.99∗∗
Profitability .76\.82 8 5,866 .01 .01 .06 (−.06, .08) .02 (−.04, .06) 39 20.52∗∗
Note. MR =mean reliability (predictor\criterion); k=number of effect sizes in each meta-analysis; N=combined sample size; r=sample-
size weighted mean uncorrected correlation; rc=estimated corrected mean correlation; SDrc=standard deviation of the estimated corrected mean
correlation; CV =credibility interval; SErc=estimated standard error for the corrected mean correlation; CI =confidence interval; VAR =percentage
of observed variance accounted for by statistical artifacts; Q=the chi-square-test for the homogeneity of corrected correlations (rc) across studies.
∗p<.05. ∗∗p<.01.
GANG WANG ET AL. 815
TABL E 6 . 5
Meta-Analytic Correlations Between CEO Prior Career Experience (Disaggregated According to Level of Specificity) and Future Firm
Performance
Varia b l e MR kN r r
cSDrc80% CV SErc95% CI VAR Q
CEO prior industry experience
Future firm performance .74\.79 6 3,792 .10 .13 .12 (−.02, .28) .05 (.03, .23) 18 33.18∗∗
Profitability .73\.79 5 3,681 .01 .01 .05 (−.06, .08) .03 (−.05, .07) 44 11.48∗
CEO prior job experience
Future firm performance .80\.71 6 2,500 −.04 −.05 .04 (−.11, .00) .03 (−.11, −.00) 85 7.03
Profitability .80\.71 4 2,188 −.05 −.06 .03 (−.10, −.03) .03 (−.12, −.01) 77 5.2
CEO prior task experience
Future firm performance .66\.80 4 1,052 −.02 .01 .17 (−.21, .23) .09 (−.17, .19) 19 20.76∗∗
Profitability .66\.80 4 1,052 −.02 .01 .17 (−.21, .23) .09 (−.17, .19) 19 20.76∗∗
Note. MR =mean reliability (predictor\criterion); k=number of effect sizes in each meta-analysis; N=combined sample size; r=sample-
size weighted mean uncorrected correlation; rc=estimated corrected mean correlation; SDrc=standard deviation of the estimated corrected mean
correlation; CV =credibility interval; SErc=estimated standard error for the corrected mean correlation; CI =confidence interval; VAR =percentage
of observed variance accounted for by statistical artifacts; Q=the chi-square-test for the homogeneity of corrected correlations (rc) across studies.
∗p<.05. ∗∗p<.01.
816 PERSONNEL PSYCHOLOGY
TABL E 6 . 6
Meta-Analytic Correlations Between CEO Positive Self-Concept (Broad Construct) and Future Firm Performance
Varia b l e MR kN rr
cSDrc80% CV SErc95% CI VAR Q
CEO positive self-concept
Future firm performance .77\.70 15 1,986 .07 .07 .29 (−.29, .44) .08 (−.08, .22) 16 96.26∗∗
Profitability .77\.67 9 1,154 .07 .06 .33 (−.37, .48) .11 (−.17, .28) 13 70.13∗∗
Growth .72\.74 4 687 .10 .12 .26 (−.21, .46) .14 (−.14, .39) 14 27.83∗∗
Note. MR =mean reliability (predictor\criterion); k=number of effect sizes in each meta-analysis; N=combined sample size; r=sample-
size weighted mean uncorrected correlation; rc=estimated corrected mean correlation; SDrc=standard deviation of the estimated corrected mean
correlation; CV =credibility interval; SErc=estimated standard error for the corrected mean correlation; CI =confidence interval; VAR =percentage
of observed variance accounted for by statistical artifacts; Q=the chi-square-test for the homogeneity of corrected correlations (rc) across studies.
∗p<.05. ∗∗p<.01.
GANG WANG ET AL. 817
TABL E 6 . 7
Meta-Analytic Correlations Between CEO Positive Self-Concept (Disaggregated With Reference to Research on Core Self-Evaluations/
Finkelstein et al. [2009]) and Future Firm Performance
Varia b l e M R kN rr
cSDrc80% CV SErc95% CI VAR Q
CEO core self-evaluations (positive self-regard)
Future firm performance .75\.74 9 1,529 .06 .04 .32 (−.37, .45) .11 (−.17, .26) 10 86.74∗
Profitability .80\.74 5 859 .04 .00 .36 (−.45, .46) .16 (−.32, .32) 8 59.20∗∗
CEO charisma
Future firm performance .92\.62 4 395 .14 .18 .10 (.04, .31) .07 (.04, .32) 62 6.5
Profitability .90\.57 3 245 .18 .27 .12 (.12, .42) .09 (.09, .45) 65 4.64
Note. MR =mean reliability (predictor\criterion); k=number of effect sizes in each meta-analysis; N=combined sample size; r=sample-
size weighted mean uncorrected correlation; rc=estimated corrected mean correlation; SDrc=standard deviation of the estimated corrected mean
correlation; CV =credibility interval; SErc=estimated standard error for the corrected mean correlation; CI =confidence interval; VAR =percentage
of observed variance accounted for by statistical artifacts; Q=the chi-square-test for the homogeneity of corrected correlations (rc) across studies.
∗p<.05. ∗∗p<.01.
818 PERSONNEL PSYCHOLOGY
TABL E 6 . 8
Meta-Analytic Correlations Between CEO Personality Traits (Disaggregated With Reference to the HEXACO Six-Factor Personality
Framework) and Future Firm Performance
Varia b l e MR kN r r
cSDrc80% CV SErc95% CI VAR Q
CEO (low in) emotionality
Future firm performance .75\.79 7 1,080 .04 .03 .30 (−.36, .41) .12 (−.20, .26) 12 60.59∗∗
Profitability .81\.86 3 410 −.05 −.05 .32 (−.46, .35) .19 (−.43, .32) 9 31.72∗∗
CEO extraversion
Future firm performance .78\.78 7 784 .08 .10 .24 (−.20, .41) .10 (−.09, .29) 21 33.87∗∗
Profitability .76\.76 4 460 .21 .27 .18 (.03, .50) .10 (.07, .47) 27 14.53∗
CEO conscientiousness
Future firm performance .84\.77 4 450 −.07 −.09 .19 (−.34, .16) .11 (−.30, .12) 27 14.99∗∗
Profitability .86\.76 3 339 −.13 −.16 .18 (−.39, .07) .12 (−.39, .06) 29 10.35∗
CEO charisma
Future firm performance .92\.62 4 395 .14 .18 .10 (.04, .31) .07 (.04, .32) 62 6.5
Profitability .90\.57 3 245 .18 .27 .12 (.12, .42) .09 (.09, .45) 65 4.64
Note. MR =mean reliability (predictor\criterion); k=number of effect sizes in each meta-analysis; N=combined sample size; r=sample-
size weighted mean uncorrected correlation; rc=estimated corrected mean correlation; SDrc=standard deviation of the estimated corrected mean
correlation; CV =credibility interval; SErc=estimated standard error for the corrected mean correlation; CI =confidence interval; VAR =percentage
of observed variance accounted for by statistical artifacts; Q=the chi-square-test for the homogeneity of corrected correlations (rc) across studies.
∗p<.05. ∗∗p<.01.
GANG WANG ET AL. 819
extraversion had a positive relationship with future firm profitability. Thus,
overall, the results provide limited support for the direct effects of CEO
personality on future firm performance.
Discussion
To take stock of empirical research on UET, we used meta-analysis
to examine the relationships among CEO characteristics, firm strategic
actions, and future firm performance. The results broadly support UET
and, importantly, also reveal more nuanced relationships. This research has
theoretical and practical implications and suggests many future research
directions.
Theoretical Implications
CEO characteristics and firm strategic actions. This study contributes
to UET in many ways. First, it reconciles mixed findings, reveals fine-
grained relations, and advances knowledge about the size of the true
correlations between commonly studied CEO characteristics and firm
strategic actions. Specifically, contrary to expectations, CEO age did not
predict the broad indicator of firm strategic actions. This finding is counter
to age stereotypes that older workers, including executives, are less ag-
gressive and more risk averse. However, the nuanced analyses revealed
that not all firm strategic actions are equal: CEO age had relatively strong
negative relationships with firm risk taking and product innovation. One
reason may be that the intensity of competition and the frequency and
scale of technology changes in the modern economy have increased the
importance of risk taking and product innovation. Younger CEOs may be
more familiar and comfortable with these two strategic actions than older
CEOs. In fact, CEO age was positively related to firm strategic actions
when these two variables were omitted. Thus, our findings caution against
making broad generalizations about the preferences of older CEOs.
Unlike CEO age, CEO tenure was negatively related to the broad
measure of firm strategic actions. Again, the analyses of the specific cate-
gories and types of strategic actions provided important insights. Specifi-
cally, CEO tenure had a negative relationship with the broad strategic risk
measure, with most of the individual indicators of strategic risk, and with
strategic change. These results support the view that longer-tenured CEOs
tend to be more resistant to change and are more risk averse. Conversely,
CEO tenure had little bearing on strategic scope.
Moreover, consistent with our expectations, CEO formal education
was positively related to firm strategic actions, both broadly and narrowly
measured. “Since top executives are many years beyond their formal
820 PERSONNEL PSYCHOLOGY
education” (Finkelstein et al., 2009, p. 106), it is a bit surprising to find that
their education experiences are reflected in their firms’ strategic actions.
Given that most CEOs hold a bachelor’s degree (Hambrick, Black, &
Fredrickson, 1992), it stands to reason that the positive effects of CEO
formal education are attributable mostly to their graduate training, perhaps
more specifically to their MBA degrees (Bertrand & Schoar, 2003). To
some extent, the positive effect of CEO formal education might reflect
the heavy emphasis on taking and implementing strategic actions in most
MBA programs (Hambrick et al., 1992).
It turned out that CEO prior career experience had complex but im-
portant relationships with firm strategic actions. The positive association
between the broad measure of CEO prior career experience and the broad
measure of firm strategic actions support our arguments that more prior
career experience in any given area, position, or role would prepare CEOs
to take more firm strategic actions, perhaps by equipping them with more
knowledge and confidence.
More nuanced patterns of relationship emerged when the broad mea-
sures were broken into narrower categories. Specifically, CEO throughout
and CEO nonthroughput experiences were positive and significant pre-
dictors of the broad measure of firm strategic actions, suggesting that
experiences in the functional areas help CEOs learn to process infor-
mation, solve business problems, and navigate through ambiguous and
complex information in general. Also, though not part of Hambrick and
Mason’s framework, CEO prior international experience seems to be im-
portant. We found that this variable also was positively related to the broad
firm strategic actions measure. This finding supports the view that expo-
sure to unfamiliar problems and foreign cultures equips people to handle
a variety of future challenges, including those that lack an international
component (e.g., Daily, Certo, & Dalton, 2000). Surprisingly, however,
CEO prior general experience had little bearing on firm strategic actions.
Perhaps these general experiences lack the richness of experiences in the
functional areas or in international settings.
Interestingly, when the measures of CEO prior career experience were
categorized by level of specificity (Qui´
nones et al., 1995), CEO prior task
experience was the only significant and positive predictor of the broad
measure of firm strategic actions. This pattern is similar to that reported
in Qui´
nones et al. (1995), who found that employee work experience
measured at the task level was more highly related to employee job per-
formance than was employee work experience measured at higher levels
(job and organizational levels). One explanation is that task experience
may be a better indicator “of what individuals actually do” (Qui´
nones
et al., 1995, p. 904). Because making strategic choices is a major job
responsibility for CEOs, a clear implication is that researchers studying
GANG WANG ET AL. 821
firm strategic actions should seek, whenever possible, to measure CEO
prior experience at more precise levels of specificity.
On a related note, CEO prior task experience had significantly stronger
relationships with firm strategic actions when the measures of task ex-
periences (e.g., international experience) matched the measures of firm
strategic actions (e.g., firm international diversification) than when the
measures did not match (e.g., international experience and advertising
intensity). This finding is consistent with the attention-based view: “what
decision-makers do depends on what issues and answers they focus their
attention on” (Ocasio, 1997, p. 187). CEOs with prior work experience
in particular task areas attend to information that fits with this experi-
ence, leading to a preference for strategic actions in those areas (e.g.,
Cho & Hambrick, 2006; Ocasio, 2011). For example, CEOs with more
product development experience might prefer greater spending on R&D.
Thus, CEO prior task experience could be an important focus of future
research on firm strategic actions, especially those strategic actions that
align with the focal experience. Taken together, our study shows that the
operationalization of CEO prior career experience affects the magnitude
of its relationship with firm strategic actions.
Finally, the findings suggest CEO personality may shape firm strategic
actions. When CEO personality was operationalized with CEO positive
self-concept as a broad construct, it had a positive relationship with the
broad measure of firm strategic actions. This finding suggests that CEOs
who evaluate themselves and their ability to influence their environment
positively are more likely to engage in strategic actions, possibly due to
their ambition and confidence (Hiller & Hambrick, 2005). The positive
relationship of the broad measure of CEO positive self-concept with the
measure of strategic risk also supports this conclusion.
A similar patter emerged when the broad measure of CEO positive
self-concept was broken down into the narrower constructs, CEO CSE
and CEO positive self-regard. Both of these two variables also were
positively related to the broad measure of firm strategic actions and to
strategic risk. In addition, the 95% CIs of these variables substantially
overlapped. This pattern of relationship suggests that the positive asso-
ciation between CEO positive self-concept and firm strategic actions is
relatively robust with respect to how CEO positive self-concept was oper-
ationalized. Notably, the insignificant relationship between CEO locus of
control and firm strategic actions is counter to the favorable view of locus
of control commonly found in the strategy literature (Finkelstein et al.,
2009).
In addition, the results based on the HEXACO framework indicate
that some of the CEO personality traits were valid predictors of firm
strategic actions. The positive relationship for CEO humility suggests that
822 PERSONNEL PSYCHOLOGY
grandiose self-concept (which indicates a lack of humility) leads to bolder
strategic moves (e.g., Chatterjee & Hambrick, 2007, 2011). Likewise, the
positive relationship for CEO emotionality (which indicates a lack of emo-
tionality) supports research on CSE arguing that positive self-evaluations
relate to more significant strategic initiatives (Hiller & Hambrick, 2005).
In addition, the positive relationship for CEO extraversion (and its pos-
itive relationship with future firm profitability) is consistent with prior
findings in the leadership literature that extraversion is a strong predictor
of leadership behaviors and effectiveness (e.g., Barrick & Mount, 1991;
Bono & Judge, 2004; Colbert, Choi, Judge, & Wang, 2012).
Relationships With Future Firm Performance
Second, the present research advances UET by clarifying the relation-
ships of firm strategic actions and the CEO characteristics with future firm
performance. A central tenet of UET is that firm strategic actions transmit
the influences of CEO characteristics on firm performance. Consistent
with our expectations, the broad measure of firm strategic actions was
positively related to future firm performance and to the measure of future
firm profitability in particular. When the broad measure of firm strate-
gic actions was replaced with the more homogenous categories of firm
strategic actions and the individual measures, the 95% CIs overlapped
substantially with only one exception. Thus, contributing to UET, the cur-
rent study shows that the relationship between firm strategic actions and
future firm performance is generally positive and also meta-analytically
reveals the true magnitude of this relationship. These findings are rele-
vant to long-standing debates about whether executives’ pursuit of firm
strategic actions is in the firm’s best interests (e.g., Tosi, Werner, Katz, &
G´
omez-Mej´
ıa, 2000).
In addition, the findings show that CEO characteristics predict fu-
ture firm performance. Specifically, contrary to our expectations, CEO
age and tenure were positively associated with future firm performance.
Whereas we predicted that older and longer-tenured CEOs might be more
complacent and less aggressive, perhaps hurting future firm performance,
the positive relationships we found suggest that other factors might be at
work. For example, perhaps older and longer-tenured CEOs have more
legitimacy, stronger networks, and better access to resources (Pfeffer &
Salancik, 1978). If so, their firms might perform better as a result. Simi-
larly, age and tenure might produce greater organizational commitment,
which might improve future firm performance by reducing opportunism
and agency costs (e.g., Gong, Law, Chang, & Xin, 2009). Thus, more
research on how CEO age and tenure may affect future firm performance
is needed.
GANG WANG ET AL. 823
As expected, CEO formal education was positively related to future
firm performance. It may be that highly educated CEOs have better train-
ing, greater cognitive development, and a richer knowledge base, perhaps
increasing future firm performance by improving their decision making
and promoting more pertinent strategic actions (Dragoni, Oh, Vankatwyk,
& Tesluk, 2011).
Once again, CEO prior career experience had fine-grained relation-
ships with future firm performance. First, the broad measure of CEO prior
career experience was positively related to the broad measure of future
firm performance but not to profitability necessarily. However, because
the 95% CI of the broad measure of future firm performance overlapped
with the 95% CI of profitability substantially, we contend that the true re-
lationship of CEO prior career experience with these two variables are not
significantly different from one another. Nevertheless, it remains possible
that CEO prior career experience’s relationship with some firm perfor-
mance indicators, such as efficiency, may differ from its relationship with
profitability.
Second, again, the subcategory analyses reveal interesting patterns.
Whereas the specific CEO prior career experiences variables (e.g.,
throughput, nonthroughput, job, and task experiences) were more valid
predictors of firm strategic actions, the general experiences were more
valid predictors of future firm performance. Specifically, CEO prior gen-
eral experience and CEO prior industry experience were positively related
to future firm performance, but the more specific experiences were not.
Although these results seem inconsistent at first glance, they are consis-
tent with research on learning transfer (Morrison & Brantner, 1992) and
human capital (Murphy & Z´
abojnik, 2007). Literature on learning trans-
fer suggests that people tend to “follow templates and decision making
shortcuts [in] their current ‘knowledge corridor,’” making it harder for
them to learn and perform in other domains (Hamori & Koyuncu, 2015,
p. 27). Similarly, human capital research posits that human capital accu-
mulated in particular tasks and jobs transfers imperfectly and sometimes
suboptimally to other settings (Ployhart, Nyberg, Reilly, & Maltarich,
2014). As a result, whereas more specific experiences may interfere with
future learning and performance in new contexts, the general experiences
may transfer more easily. Thus, more general experiences might more
positively contribute to future firm performance.
Finally, CEO positive self-concept was an invalid predictor of future
firm performance. Further, the subcategory analyses revealed that only
one of these variables—CEO charisma—had a significant relationship
with future firm performance. In addition, CEO extraversion showed a
significant relationship with future firm profitability. Thus, it may be that
CEO personality traits are too distal from future firm performance to have
824 PERSONNEL PSYCHOLOGY
meaningful effects. Relatedly, the effect of CEO positive self-concept
on future firm performance might depend primarily on its relationships
with firm strategic actions (e.g., Simsek, 2007). Alternately, perhaps other
individual differences—such as decision-making style (Epstein, Pacini,
Dene-Raj, & Heier, 1996)—warrant investigation instead.
Future Research Agenda
This meta-analysis suggests several future research directions. First,
despite the positive firm strategic actions–future firm performance rela-
tionship, most of the CEO characteristics were positively related to future
firm performance but had weak or negative relationships with firm strate-
gic actions. Thus, whereas the majority of the literature has focused on
firm strategic actions, it appears that CEOs influence future firm perfor-
mance in other ways as well. For example, whereas UET focuses on firm
strategic actions by examining major resource reallocation decisions (e.g.,
acquisitions), smaller scale and more incremental operational actions ini-
tiated by CEOs might be important too. Although few studies examine
the effects of CEOs on such operational actions, we encourage scholars to
consider how CEOs shape pricing decisions, inventory management, cash
flow management, and so on. In addition, it may be that CEOs influence
future firm performance by affecting the behavior and composition of
their top management teams (TMT). Simsek (2007), for example, found
that CEO tenure was positively related to TMT risk-taking propensity,
which led to increased firm entrepreneurial initiatives and financial per-
formance. In short, we need theoretical and empirical research to identify
additional mediators of the CEO characteristics–future firm performance
relationship.
Second, CEO prior career experience needs more attention. In partic-
ular, as noted above, the use of specific versus general measures of CEO
prior career experience appears to matter. As a result, we encourage future
researchers to draw on Qui´
nones et al. (1995), Tesluk and Jacobs (1998),
and other microlevel frameworks to operationalize CEO prior career ex-
perience at different levels of specificity. On a related note, our study
revealed that most of the CEO prior career experience measures focus
on the time spent in various functional areas, jobs, industries, and so on.
Supplementing these measures with richer indicators might provide fresh
insights. For example, Crossland, Zyung, Hiller, and Hambrick (2014) re-
cently measured the variety of CEO experiences as the number of different
industries, firms, and functional areas in which s/he had worked. Likewise,
Qui´
nones et al. (1995) and Tesluk and Jacobs (1998) argued that the type,
or quality, of the experience might matter too. In this regard, we suspect
that prior career experience in more innovative, higher growth, and more
GANG WANG ET AL. 825
diversified firms or in more dynamic, less concentrated, and more global
industries might provide richer learning experiences.
Third, theory and the findings of the present study suggest that CEO
CSE (Judge et al., 1998) and extraversion are two personality traits that
hold the greatest promise of being valid and significant predictors of ef-
fective leadership, firm strategic actions, and firm performance (Hiller &
Hambrick, 2005; Judge, Bono, Ilies, & Gerhardt, 2002), and thus war-
rant more research attention. Hiller and Hambrick (2005), for example,
argued that “CSE should be adopted as a robust, well-validated umbrella
construct for research on executive self-concept.” (p. 297). They further
argued that high CSE CEOs are “not only sure of the wisdom of their
decisions per se, but also sure of their abilities to successfully implement
their decisions” (p. 311). Our findings that CEO CSE and lack of emo-
tionality related positively to firm strategic actions provide some support
for these arguments. Given the strong theoretical reasoning and mounting
evidence that CSE explains significant variance in employee motivation
and performance (Chang, Ferris, Johnson, Rosen, & Tan, 2012; Judge &
Bono, 2001), we encourage UET scholars to use CSE to study specific firm
strategic actions (e.g., international diversification) and firm performance
metrics (e.g., firm growth) that have received less attention.
In addition, CEO extraversion also tends to manifest its influences
on firm strategic actions and performance. Extraverts often have a strong
desire for power, status, influence, and prestige in organizations, and
are energetic, ambitious, and motivated to get ahead of others (Barrick,
Mount, & Li, 2013; Gray, 1987; Hogan, 1983; Stewart, 1996). Further, the
positive affect they frequently experience energizes them to set ambitious
goals, to be optimistic about the outcomes of their decisions, and to excel
(Baron, 2008; Kaplan Bradley, Luchman, & Haynes, 2009; Seo, Barrett,
& Bartunek, 2004). Thus, extraverted CEOs tend to frequently initiate
noticeably large-scale strategic actions and strive to achieve better firm
performance to outperform their counterparts. Supporting our arguments,
our fine-grained analyses based on the HEXACO framework show that
CEO extraversion was positively related to firm strategic actions and future
firm profitability. However, given the relatively small number of studies
involved in these meta-analyses, more future research on the relationships
of CEO extraversion with firm strategic actions and performance is needed.
Last, we encourage researchers to explore interplays among the CEO
characteristics. There are ways that the CEOs’ characteristics could in-
teractively influence their strategic choices and future firm performance.
For instance, CEO characteristics such as CSE and prior career experi-
ence might interact to affect firm outcomes: CEOs high in CSE might be
more confident and willing to draw on their prior career experience to
make strategic decisions (Hiller & Hambrick, 2005; Ployhart et al., 2014).
826 PERSONNEL PSYCHOLOGY
More generally, exploring interactions between CEO experience and CEO
personality could prove valuable.
Practical Significance
Although the effect sizes of the relationships were sometimes small
in magnitude, they are practically significant. First, consider CEO tenure,
the most commonly studied UET variable. The size of the population
effect of CEO tenure on future firm performance is 67% as large as the
corresponding effect of aggregated employee human capital reported by
Crook, Todd, Combs, Woehr, and Ketchen, (2011, see Table 2). It is
striking that a single person’s tenure as CEO has an effect two-thirds as
large as the effect of the firm’s entire human capital resources.
Second, because the outcome is firm financial performance, even
“small” effect sizes can have practical significance. For example, the
results in Table 6 suggest that, all else being equal, an increase in CEO
tenure by one standard deviation is related to a future firm profitability
increase of .08 standard deviation. If we apply this relationship to the
sample of companies included in Agle et al. (2006), one standard devia-
tion increase in CEO tenure would translate into an average increase of
$62.4 million in net income5among the companies. As another example,
according to binomial effect size displays (BESD; Rosenthal & Rubin,
1982), the correlation of .05 between CEO education level (assuming
there are dichotomies like high versus low education level) and firm per-
formance (assuming successful versus unsuccessful dichotomies) means
that companies with highly educated CEOs have 5% higher success rates
than those of other companies (52.5% success rates vs. 47.5% success
rates).
Finally, following Aguinis et al.’s (2010) recommendations, we con-
sulted practitioners about the practical significance of the findings using
“narrative inquiry.” Two senior HR consultants (both holding PhDs in I-O
psychology) at a large U.S. consulting firm noted that the magnitudes of
the CEO characteristics–future firm performance relationships are practi-
cally and strategically valuable to HR practitioners, because uncertainty
5We used ROA as an index of future firm financial performance because it was the most
frequently used measure of firm financial performance. Agle et al. (2006) reported a mean
future ROA (i.e., industry-adjusted ROA, after 1992) of 5.94 % with a standard deviation
of 12.00%. In this case, one standard deviation increase in CEO tenure would translate to
an increase of 0.96% in ROA. In other words, the mean ROA would increase from 5.94%
to 6.90%, a 16% increase. Given that the mean total assets of the sample firms in Agle et al.
was 6.5 billion U.S. dollars and that ROA is the ratio of net income to total assets, 0.96%
increase in ROA means that the average net income for the sample firms would increase by
62.4 million US dollars (0.96% ×6.5 billion U.S. dollars).
GANG WANG ET AL. 827
in the business environment makes future firm performance difficult to
predict. Further, the relationships provide direct evidence that HR practi-
tioners can use to convince boards and investors about the value of using
CEO demographics, experiences, and personality as selection tools.
Practical Implications
This study also has practical implications. Specifically, understanding
whether CEO characteristics shape firm strategic actions is important, not
only because they influence future firm performance but also because they
have important social implications. For example, firms usually reshuffle
their workforces following acquisitions, often by downsizing (Hitt, Harri-
son, & Ireland, 2001). Likewise, investments in product innovation create
jobs, economic growth, and technological advances that alter how peo-
ple function in society (Schumpeter, 1934). Thus, more generally, it is
important to study how CEOs influence the strategic actions their firms
undertake.
In addition, the meta-analytic results provide insight not only into
whether CEOs matter, but also how they matter. For example, we found
that firms tend to perform better when their CEOs are older, longer-
tenured, better educated, have more prior career experience, and score
high on extraversion and charisma. As implied above, these results can
help organizational decision makers make CEO selection and retention
decisions. For example, boards should give new CEOs adequate time
to accumulate the knowledge they need. In addition, this meta-analysis
informs decisions about whether to hire or retain CEOs with specific char-
acteristics, depending on the firm’s particular needs. The findings suggest,
for example, that long-tenured CEOs are less likely to initiate risky strate-
gic actions. Thus, such CEOs may be less desirable for companies in need
of large-scale turnaround.
Study Limitations
This study has limitations. First, reverse causality cannot be ruled
out completely (Aguinis et al., 2010; Aguinis & Vandenberg, 2014). For
instance, the positive correlation between CEO formal education and firm
strategic actions might exist because more action-oriented firms hire more
educated CEOs. This causality problem has long been an issue in UET
research, not simply in this meta-analysis (Hambrick, 2007).
Second, as indicated by the significant Q statistics in Tables 1 to 6,
there is heterogeneity in many of the correlations, suggesting the possibil-
ity of moderators. For example, research on managerial discretion suggests
that industry may limit CEOs’ influences on firm outcomes (Hambrick &
828 PERSONNEL PSYCHOLOGY
Finkelstein, 1987). Constrained by the availability of primary studies, we
could not test our hypotheses across different industries. As primary stud-
ies accumulate, future research should address this issue. Alternatively,
study artifacts such as low construct validity in the CEO characteristics
and firm outcomes might have contributed to the heterogeneity across the
primary studies (Schmidt & Hunter, 2014). In most cases, secondary data
reported by publicly traded firms were used to form measures of firm
strategic actions and firm performance. Although such measures appear
to be objective, they also depend on factors that have little to do with firm
strategic actions or performance (Dalton & Agunis, 2013; Venkatraman &
Ramanujam, 1986). For example, ROA could be a reflection of economic
conditions, such as recessions, in addition to firm performance.
Conclusions
Largely supporting UET, this study provides evidence that CEO char-
acteristics are related to firm strategic actions and performance, and also
offers information about the true size of these effects. Specifically, we
found that CEO tenure was negatively related to firm strategic actions,
whereas CEO formal education, prior career experience (prior task ex-
perience in particular), and positive self-concept were positively related
to firm strategic actions. Moreover, CEO age, tenure, formal education,
and prior career experience were positively related to future firm perfor-
mance. By synthesizing what the field has learned from UET, we hope
that our study spurs and redirects future research on this very important
management theory in particular and on TMTs and CEOs in general.
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APPENDIX 2
Justification for the Operationalization of CEO Positive Self-Concept
We operationalized CEO positive self-concept with variables that
closely reflect the core of the construct (i.e., positive evaluations of
themselves and their ability to influence their environments). Such vari-
ables include core self-evaluations (CSE), general self-efficacy,nar-
cissism,hubris,overconfidence,positive psychological traits, and self-
enhancement.
Moreover, Judge et al. (1998) argued that internal locus of control and
emotional stability are core components of CSE. CEOs high in internal
locus of control believe that they can exert influence on their environment
and that their actions will lead to positive outcomes (Boone & de Braban-
der, 1993). CEOs high in emotional stability (i.e., low in neuroticism) are
good at emotional regulation, which leads them to view themselves and
the environment in a positive lens and helps them quickly recover from
frustrating experiences (Bower, 1981, 1991). Therefore, both internal lo-
cus of control and emotional stability reflect CEOs’ positive self-concept.
Relatedly, trait positive affectivity (PA) and negative affectivity (NA)re-
fer to individuals’ tendencies to experience positive (e.g., enthusiasm,
joviality, and alertness) or negative (e.g., fear, anxiety, and guilt) affect
(Watson, Clark, & Tellegen, 1988). Research on affective congruency
(e.g., Bower, 1981, 1991; Rusting, 1998) suggests that CEOs high in PA
tend to have positive views on themselves, whereas CEOs high in NA tend
to have negative views on themselves (Delgado-Garcia, La Fuente-Sabate,
GANG WANG ET AL. 855
& Quevedo-Puente, 2010). Thus, trait PA and NA are related to the broad
construct, positive self-concept. We decided to include both constructs,
and we reverse-coded NA.
In addition, we also coded need for achievement and need for power
as broad indicators of CEO positive self-concept. Need for achievement
and need for power refer to an individual’s desire to achieve a significant
accomplishment and to influence others (McClelland, 1961). Both per-
sonal control and competence critical for forming positive self-concept
underlie these variables (Miller, Dr¨
oge, & Toulouse, 1988). Moreover,
given the high stakes usually associated with CEOs’ strategic decisions,
authors have examined the roles of CEO risk orientation (Plambeck &
Weber, 2009) and optimism (Hmieleski & Baron, 2009) in firm strategic
actions or performance. These variables reflect the extent to which CEOs
are willing to bear uncertainty and take risks in order to achieve significant
gains in the future. In other words, they view themselves and their talents
and skills favorably. Therefore, we decided to include these measures.
We also included promotion focus and prevention focus and reverse-
coded the latter. Research on regulatory focus (Higgins, 1997; 2000)
suggests that CEOs high in promotion focus are confident in achieving
desired goals and, thus, tend to have positive self-evaluations. Reversely,
CEOs high in prevention focus tend to be constantly anxious and insecure
about failing to achieve desired goals. According to Judge and colleagues
(1998; 2003), these CEOs are likely to have negative self-evaluations.
Finally, although charisma is not considered a personality trait, re-
search suggests that charismatic leaders are confident and determined and
believe that they are able to lead followers to achieve institutional goals
(Bass, 1985; Conger & Kanungo, 1988; Yukl, 2010). As an example,
Yukl (2010, p. 264) posited that “[c]harismatic leaders are likely to have
a strong need for power, high self-confidence, and a strong conviction in
their own beliefs and ideals.” As such, it stands to reason that the more
charismatic a CEO is, the greater positive self-evaluations the CEO has.
APPENDIX 3
Justification for the Operationalization of Firm Strategic Actions
Product innovation is critical to the performance and survival of many
firms, yet investments in product innovation are among the most expensive
investments firms make. Further, the knowledge combinations required to
produce innovations are novel, which produces uncertainty about whether
investments in product innovation will generate desirable returns. Thus,
managers’ decisions to invest resources in product innovation are impor-
tant and risky. In many cases, investments in product innovation do not
856 PERSONNEL PSYCHOLOGY
bear fruit for several years, if they bear fruit at all (Baysinger & Hoskisson,
1989; David, Hitt, & Gimeno, 2001). Thus, we included product innova-
tion as an indicator of firm strategic actions, because this construct is
consistent with our conceptualization of firm strategic actions.
Product diversification is another important indicator of firm strate-
gic actions (Hamrick & Mason, 1984; Henderson & Frederickson, 2001).
Some scholars examined product diversification using the concept of relat-
edness. Whereas unrelated diversification refers to expansion into product
or service segments that are dissimilar to one another, related diversifica-
tion refers to expansion into segments that are similar to one another. Some
scholars focused on total diversification, which is the sum of unrelated and
related diversification. Scholars have measured product diversification in
several ways. All the measures of product diversification we used were
capturing similar phenomena: the extent to which the firm was expand-
ing its product and service offerings. Such expansion is an appropriate
operationalization of strategic actions because product diversification is
expensive and risky, has significant effects on the firm’s long-term firm
performance and survival, often is irreversible in the short term, and
requires the firm to implement new structures or change existing struc-
tures to accommodate the action (Hoskisson & Hitt, 1990; Hitt, Hoskisson,
& Kim, 1997).
Besides product diversification, we included international diversifi-
cation, which refers to expansion into countries outside the firm’s home
geographic market (Hitt et al., 1997; Lu & Beamish, 2006). Measures of
international diversification include number of foreign subsidiaries (e.g.,
production facilities; Herrmann & Datta, 2006), foreign sales as a per-
centage of total sales (Gomez-Mejia, Makri, & Larraza-Kintana, 2010),
foreign assets as a percentage of total assets (Sanders & Carpenter, 1998),
and the entropy measure applied to sales across geographic regions (thus
capturing global dispersion; Herrmann, 2002). These measures indicate
the importance of international operations to the firm. International op-
erations are risky because they expose firms to multiple environments,
many of which are difficult to predict and understand (e.g., emerging
economies), they often require substantial resources to establish and man-
age, they significantly influence firm performance, and they often are dif-
ficult to reverse in the short term (Delios & Henisz, 2003; Hitt et al., 1997;
Lu & Beamish, 2006). Thus, international diversification also demon-
strates the characteristics of strategic actions.
In addition, acquisition also reflects firm strategic actions. Acquisitions
occur when two formerly independent firms join to form a new, single firm.
Scholars have used several measures of acquisitions, including dummies,
to indicate whether the firm entered a market via acquisition (Herrmann
& Datta, 2006) or made an international acquisition (Matta & Beamish,
GANG WANG ET AL. 857
2008). In addition, scholars have measured the number,size,orexpense of
the acquisitions by measuring acquisition counts (Quigley & Hambrick,
2012), amount paid for acquisitions (Jensen & Zajac, 2004), revenues of
acquired firm relative to revenues of the acquiring firm (Chatterjee & Ham-
brick, 2007), and number of acquired targets over a certain size threshold
(e.g., 2% of the acquiring firm’s assets; Hambrick & Cannella, 2004).
Finally, scholars have measured acquisition premiums, because high ac-
quisition premiums increase risk and make it difficult to earn acceptable
returns on the acquisition (Hayward & Hambrick, 2007). We included all
these measures because each captures the importance of acquisitions to
the firm’s strategy. In many ways, acquisitions are a quintessential strate-
gic action. They are among the largest and most significant and expensive
investments firms undertake, they are risky in that many fail, they fun-
damentally transform a firm over the long term, they typically result in
structural changes in the firm, and they are rather irreversible in the short
term (Hitt, Ireland, & Harrison, 2001).
Divestitures involve eliminating business units, often by selling the
units to other firms or investors (Bragaw, 2013; Quigley & Hambrick,
2012). Divestitures, therefore, tend to reduce diversification. Nonethe-
less, they are strategic actions because locating buyers, hiring investment
bankers and auditors to facilitate the sale, and negotiating the terms of
sales are expensive. Because firms lose control of potentially valuable
assets via divestitures, they are also risky, difficult to reverse, and have
significant performance consequences (Hoskisson, Cannella, Tihanyi, &
Faraci, 2004; Shimizu, 2007). Thus, we also include divestitures in our
measure of strategic actions.
Financial indicators such as capital investment, financial leverage, and
advertising intensity also suggest the extent to which strategic actions
have taken place. Capital investment is capital expenditures weighted by
either total number of employees (Waldman, Javidan, & Varella, 2004)
or total sales (Nadkarni & Herrmann, 2010). Financial leverage captures
the firm’s long-term debt level, often weighted by its total equity (i.e.,
debt to equity ratio; He & Wang, 2009), total assets (i.e., debt to assets
ratio; McClelland, Liang, & Barker, 2010), or total market value (Jensen
& Zajac, 2004). Capital investment and leverage are appropriate mea-
sures of strategic actions because, due to their expense, strategic actions
require capital and debt to finance. Similarly, given that advertising inten-
sity (percentage of total sales) captures firm’s strategic differentiation and
large-scale irreversible resource commitments and bear with uncertainty,
we also included it as a measure of firm strategic actions. In addition, some
authors particularly focused on firm risk taking actions, including firm risk
taking measured by investment in new and high-technology projects (Li
& Tang, 2010), entrepreneurial initiatives and orientation (Simsek, 2007;
858 PERSONNEL PSYCHOLOGY
Simsek, Veiga, Lubatkin, & Dino, 2010), and subprime lending specialist
(a mortgage industry-specific measure of firm risk taking; Lewellyn &
Muller-Kahle, 2012). Because firm risk taking involves resource commit-
ments and high levels of uncertainty, we included measures of firm risk
taking as indicators of firm strategic actions.
Last, built on the aggregate of some of the above specific measures
of firm strategic actions, the composite measures (e.g., strategic change,
strategic variation and deviation, strategic refocusing, risky outlays, or
strategic stability [reverse coded]) capture significant strategic changes
implemented by the firm and show how the firm has altered its strat-
egy over time. Changing strategy creates risk (because new routines and
processes must be implemented to manage the change), alters organiza-
tional structure (by definition, in many cases), is difficult to reverse (due
to employee resistance to change, especially change that reverts back to
the status quo), and has significant effects on firm performance (Hannan
& Freeman, 1984; Karaevli, 2007; Miller, 1991; Zhang & Rajagopalan,
2010). Thus, we argue that these composite measures reflect one type of
firm strategic actions and used strategic change to label them.
GANG WANG ET AL. 859
APPENDIX 4
Meta-Analytic Correlations of CEO Characteristics and Firm Strategic Actions With Concurrent Firm Performance and Future and
Concurrent Market-Based Performance
Varia b l e MR kN rr
cSDrc80% CV SErc95% CI VAR Q
4.1: Meta-analytic correlations of CEO age with concurrent firm performance and future and concurrent market-based performance
Concurrent firm performance .80\.75 74 192,081 .01 .01 .06 (−.07, .08) .01 (−.01, .02) 15 500.41∗∗
Profitability .80\.78 71 191,490 .01 .01 .06 (−.07, .09) .01 (−.01, .02) 14 510.75∗∗
Future market performance .80\.81 12 6,325 −.04 −.05 .11 (−.20, .09) .04 (−.12, .02) 19 64.66∗∗
Concurrent market performance .79\.75 29 80,086 −.04 −.05 .06 (−.12, .02) .01 (−.07, −.03) 16 176.33∗∗
4.2: Meta-analytic correlations of CEO tenure with current firm performance and future and concurrent market-based performance
Concurrent firm performance .80\.78 121 223,959 .03 .05 .24 (−.26, .35) .02 (.01, .09) 2 7514.02∗∗
Profitability .80\.79 113 221,757 .03 .04 .06 (−.04, .11) .01 (.02, .05) 22 507.53∗∗
Perceived firm performance .80\.85 6 686 .08 .09 .00 (.09, .09) .04 (.02, .17) 100 2.07
Growth .80\.80 4 3,162 −.02 −.03 .10 (−.16, .10) .05 (−.13, .07) 17 24.11∗∗
Future market performance .80\.80 18 9,128 .02 .02 .10 (−.11, .15) .03 (−.03, .07) 24 75.92∗∗
Concurrent market performance .80\.73 76 154,838 .02 .02 .03 (−.01, .06) .00 (.02, .03) 49 155.44∗∗
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cSDrc80% CV SErc95% CI VAR Q
4.3: Meta-analytic correlations of CEO formal education with concurrent firm performance and future and concurrent market-based
performance
Concurrent firm performance .79\.73 21 73,513 −.00 −.00 .04 (−.05, .05) .01 (−.02, .02) 25 82.45∗∗
Profitability .79\.77 18 73,060 −.00 −.00 .04 (−.05, .04) .01 (−.02, .02) 24 76.38∗∗
Future market performance .63\.84 4 1,859 .04 .07 .04 (.02, .11) .03 (.01, .12) 75 5.37
Concurrent market performance .63\.80 6 13,542 −.04 −.07 .12 (−.23, .08) .05 (−.17, .02) 5 109.32∗
4.4: Meta-analytic correlations of CEO prior career experience (broad construct) with concurrent firm performance and future and
concurrent market-based performance
Concurrent firm performance .74\.72 21 72,083 −.01 −.02 .03 (−.06, .03) .01 (−.03, −.00) 30 69.90∗∗
Profitability .73\.73 19 71,290 −.01 −.02 .04 (−.06, .03) .01 (−.03, .00) 26 72.90∗∗
Future market performance .65\.80 4 1,939 −.02 −.02 .07 (−.11, .07) .04 (−.11, .07) 39 10.13∗
Concurrent market performance .71\.80 6 9,374 −.02 −.03 .06 (−.11, .05) .03 (−.08, .02) 27 22.62∗∗
4.5: Meta-analytic correlations of CEO prior career experience (disaggregated according to functional background) with concurrent firm
performance and future and concurrent market-based performance
CEO prior throughput career experience
Concurrent firm performance .73/.62 6 7,045 −.02 −.03 .04 (−.08, .01) .02 (−.07, .01) 53 11.39∗
Profitability .80/.69 5 6,907 −.02 −.03 .04 (−.08, .01) .02 (−.07, .01) 48 10.31∗
CEO prior nonthroughput(output and peripheral) experience
Concurrent firm performance .80\.64 5 1,321 .08 .10 .05 (.04, .16) .03 (.03, .16) 75 6.65
Profitability .80\.65 3 885 .05 .06 .00 (.06, .06) .03 (−.00, .13) 100 1.72
CEO prior general experience
Concurrent firm performance .70\.77 11 20,426 .01 .01 .05 (−.06, .08) .02 (−.03, .04) 26 41.94∗∗
Profitability .70\.75 10 19,931 .01 .01 .05 (−.06, .08) .02 (−.02, .05) 26 38.93∗∗
GANG WANG ET AL. 861
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cSDrc80% CV SErc95% CI VAR Q
4.6: Meta-analytic correlations of CEO prior career experience (disaggregated according to level of specificity) with concurrent firm
performance and future and concurrent market-based performance
CEO prior industry experience
Concurrent firm performance .80\.85 4 4,036 −.02 −.02 .00 (−.02, −.02) .02 (−.05, .01) 100 2.93
CEO prior job experience
Concurrent firm performance .70\.75 9 16,644 .02 .02 .06 (−.06, −.09) .02 (−.02, .06) 23 38.77∗∗
Profitability .69\.73 8 16,346 .01 .02 .06 (−.06, −.09) .02 (−.03, .06) 22 36.64∗∗
CEO prior task experience
Concurrent firm performance .76\.65 10 59,397 −.01 −.02 .01 (−.03, .00) .01 (−.03, −.00) 60 15.99
Profitability .76\.71 10 59,397 −.01 −.02 .02 (−.03, .00) .01 (−.03, −.00) 54 18.61∗
4.7: Meta-analytic correlations of CEO positive self-concept (broad construct) with concurrent firm performance and
future and concurrent market-based performance
Concurrent firm performance .64\.78 22 12,860 .01 .03 .07 (−.07, .12) .02 (−.01, .06) 40 55.05∗∗
Profitability .62\.72 15 11,412 .01 .02 .07 (−.07, .11) .02 (−.02, .06) 39 38.60∗∗
Perceived performance .73\.83 5 907 .08 .11 .24 (−.20, .42) .11 (−.11, .33) 14 36.36∗∗
Future market performance .54\.80 4 1,832 −.08 −.16 .00 (−.16, −.16) .02 (−.20, −.11) 100 1.28
Concurrent market performance .65\.80 4 3,681 −.02 −.04 .20 (−.29, .21) .10 (−.24, .16) 5 85.53∗∗
4.8: Meta-analytic correlations of CEO positive self-concept (disaggregated with reference to research on core self-evaluations
(CSE)/Finkelstein et al. (2009)) with concurrent firm performance and future and concurrent market-based performance
CEO CSE (positive self-regard)
Concurrent firm performance .78\.80 14 7,803 .01 .02 .07 (−.08, .11) .02 (−.03, .06) 34 40.61∗∗
Profitability .80\.81 10 6,983 .01 .02 .07 (−.07, .10) .02 (−.03, .06) 34 29.19∗∗
CEO charisma
Concurrent firm performance .76\.80 3 1,048 .09 .11 .00 (.11, .11) .03 (.05, .17) 100 2.59
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cSDrc80% CV SErc95% CI VAR Q
4.9: Meta-analytic correlations of CEO personality traits (disaggregated with reference to the HEXACO Six-Factor Personality Framework)
with concurrent firm performance and future and concurrent market-based performance
CEO (low in) humility (grandiose self-concept)
Concurrent firm performance .77\.80 11 6,491 .02 .03 .08 (−.08, .13) .03 (−.03, .08) 29 37.89∗∗
Profitability .81\.82 8 5,775 .13 .17 .36 (−.30, .63) .13 (−.09, .42) 2 520.32∗∗
CEO (low in) emotionality
Concurrent firm performance .71\.77 7 5,027 −.01 −.02 .02 (−.04, .01) .02 (−.05, .01) 84 8.29
Profitability .80\.75 4 4,726 −.02 −.03 .00 (−.03, −.03) .01 (−.06, −.00) 100 1.04
CEO extraversion
Concurrent firm performance .69\.80 5 4,710 .03 .02 .03 (−.02, .07) .02 (−.02, .07) 58 8.68
Profitability .57\.72 3 4,464 .02 .05 .00 (.05, .05) .01 (.02, .08) 100 .91
CEO conscientiousness
Concurrent firm performance .80\.78 3 165 .15 .18 .20 (−.08, .43) .14 (−.09, .45) 43 7.05
CEO charisma
Concurrent firm performance .76\.80 3 1,048 .09 .11 .00 (.11, .11) .03 (.05, .17) 100 2.59
4.10: Meta-analytic correlations of firm strategic actions with concurrent firm performance and future and concurrent
market-based performance
Firm strategic actions
Concurrent firm performance .72\.73 88 116,036 −.06 −.10 .20 (−.35, .15) .02 (−.14, −.06) 3 2609.51∗∗
Profitability .71\.74 87 115,660 −.08 −.12 .20 (−.37, .13) .02 (−.16, −.08) 3 2545.00∗∗
Growth .55\.60 4 6,067 .13 .29 .45 (−.28, .86) .22 (−.15, .73) 3 151.73∗∗
Future market performance .50\.78 16 11,305 .04 .07 .19 (−.17, .32) .05 (−.02, .17) 19 85.45∗∗
Concurrent market performance .63\.72 41 102,890 −.02 −.04 .21 (−.31, .22) .03 (−.11, .02) 2 2372.56∗∗
Note. MR =mean reliability (predictor\criterion); k=number of effect sizes in each meta-analysis; N =combined sample size; r=sample-
size weighted mean uncorrected correlation; rc=estimated corrected mean correlation; SDrc=standard deviation of the estimated corrected mean
correlation; CV =credibility interval; SErc=estimated standard error for the corrected mean correlation; CI =confidence interval; VAR =percentage
of observed variance accounted for by statistical artifacts; Q =the chi-square-test for the homogeneity of corrected correlations (rc) across studies.
∗p<.05. ∗∗p<.01.
