Executive succession and strategic change in Japan

Authors

  • Motohiro Nakauchi,

    1. Faculty of Business Administration, Toyo University, Tokyo, Japan
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  • Margarethe F. Wiersema

    Corresponding author
    1. The Paul Merage School of Business, University of California, Irvine, Irvine, California, U.S.A.
    • Correspondence to: Margarethe F. Wiersema, Paul Merage School of Business, University of California Irvine, Irvine, California 92717, U.S.A. E-mail: mfwierse@uci.edu

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Abstract

Scholars studying upper echelons have found that executive succession can serve as an important adaptation mechanism. The bulk of these findings, however, derive from market-based governance settings, which raises an issue of contextual robustness. This study examines this issue by investigating the link between executive succession and strategic change in Japan, a context noted for relatively weak market-based corporate governance and lack of board independence. We find a greater likelihood of strategic change after non-routine executive succession, with the extent of change unaffected by firm performance. Routine succession in the case of a powerful prior president leads to less post-succession strategic change. Copyright © 2014 John Wiley & Sons, Ltd.

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