Outsider CEO succession and firm performance

Chief Executive Officer/ Managing Director Succession and Value Relevance of Accounting Numbers

“…Despite the large number of studies (example, Ishak et al 2013;Jalal & Prezas 2012;Setiawan et al 2011;Charitou et al 2010;Dahya & McConnell 2005) documenting evidence that outsider is perceived as more beneficial to investors, our study, however, indicates that Malaysian investors prefer to insider rather than outsider as they have better positive reaction toward firms with inside successor. These findings extend the limited studies which argued that insider is better due to a smoother transition, better social network and a better vision and understanding about the firm's conditions (Setiawan 2008;Rhim et al 2006;Dherment-Ferere & Renneboog 2000;Dalton & Kesner 1985).…”

“…However, firms do typically appoint outside successors if they face the pressure of initiating strategic change (Shen & Cannella 2002) or firms are in situations of poor organizational performance, financial distress or bankruptcy (Setiawan et al 2011;Rhim et al 2006). In these situations, literature suggests that firms do not believe that an inside successor can bring the desired change; instead, they view outside successor as a catalyst of change that will hopefully lead to improved firm performance (Jalal & Prezas 2012).…”

“…Therefore, it is understandably agreed that public, specifically investors, will react in certain ways when there are announcements of changes in the top management position since it indicates firms' future financial performance (Jalal & Prezas 2012), and their success or failure (Rhim, Peluchette & Song 2006). Financial performance, which is generally a benchmark of a managers' success in improving the welfare of the owners, is one of the essential considerations in top management turnover (Lindrianasari & Hartono 2012).…”

Calling a Stranger to Lead

“…Nevertheless, sometimes he does, inasmuch as Napoleon (for example) was not French, Hitler was not German, and Stalin was not Russian. Business firms sometimes recruit outsiders to assume command (e.g., Jalal & Prezas, ; Nelton, ). It is not unheard of for strangers to lead.…”

Pertukaran Ketua Pegawai Eksekutif/Pengarah Urusan dan Pengurusan Perolehan

“…Ketua Pegawai Eksekutif/Pengarah Urusan (KPE/PU) merupakan individu terpenting dalam menentukan hala tuju organisasi, objektif serta keputusan strategik dan pengoperasian syarikat (Larcker, Miles & Tayan 2014;Amran et al 2014;Ishak & Abdul Latif 2012;Donoher, Reed & Storrud-Barnes 2007). Oleh itu, apabila syarikat melakukan pertukaran KPE/PU, ia disifatkan sebagai keputusan kritikal (Rhim, Peluchette & Song 2006) yang boleh mempengaruhi prestasi masa hadapan syarikat (Jalal & Prezas 2012) dan harga saham (Setiawan, Hananto & Kee 2011).…”