TY - JOUR
T1 - CEO cognitive competencies in managing turnaround
T2 - Complexity and focus
AU - Liang, Xin
N1 - Publisher Copyright:
© The Author(s) 2023.
PY - 2023
Y1 - 2023
N2 - This study examines the knowledge structures (KSs) of CEOs of firms that attempted turnaround from performance decline. We developed and tested a theoretical model that describes how two cognitive characteristics of CEOs, complexity and centrality, influence the likelihood of turnaround. It is found that CEO KS centrality directly increases the chance of turnaround. In addition, CEO KS complexity is found to increasingly improve the chance of turnaround as a firm in decline launches a greater extent of strategic change to their organization. Together, in theory, our research suggests that CEO cognitive competencies matter for managing successful turnaround attempts. Practically speaking, the findings of this article imply that to improve their chance of achieving successful turnaround, declining firms should look for CEOs who are cognitively focused or who are cognitively complex enough to engage in the degree of strategic changes launched to save the firm.
AB - This study examines the knowledge structures (KSs) of CEOs of firms that attempted turnaround from performance decline. We developed and tested a theoretical model that describes how two cognitive characteristics of CEOs, complexity and centrality, influence the likelihood of turnaround. It is found that CEO KS centrality directly increases the chance of turnaround. In addition, CEO KS complexity is found to increasingly improve the chance of turnaround as a firm in decline launches a greater extent of strategic change to their organization. Together, in theory, our research suggests that CEO cognitive competencies matter for managing successful turnaround attempts. Practically speaking, the findings of this article imply that to improve their chance of achieving successful turnaround, declining firms should look for CEOs who are cognitively focused or who are cognitively complex enough to engage in the degree of strategic changes launched to save the firm.
KW - CEO knowledge structure centrality
KW - CEO knowledge structure complexity
KW - firm turnarounds
KW - strategic change
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U2 - 10.1177/03128962231168009
DO - 10.1177/03128962231168009
M3 - Article
AN - SCOPUS:85159123430
SN - 0312-8962
JO - Australian Journal of Management
JF - Australian Journal of Management
ER -