Academic journal article Journal of Business Strategies

Generating Press, Bold Ideas, and Stubbornness: The Impact of Celebrity CEOs

Academic journal article Journal of Business Strategies

Generating Press, Bold Ideas, and Stubbornness: The Impact of Celebrity CEOs

Article excerpt

ABSTRACT

Our purpose is to investigate and discuss the impact of celebrity CEOs. Numerous CEOs have attained celebrity status through infusion into media coverage. Consequently, CEOs routinely enter into American popular culture. We offer general propositions that successful CEOs gain positive media coverage, and thus gain celebrity CEO status. Subsequently, celebrity CEOs are vulnerable to becoming rigid in their business strategy and also fixate on increasing firms' corporate social responsibility operatives, both of which are enhanced by narcissism. Under negative conditions (i.e., poor performance, bad press), celebrity CEOs tend to escalate their commitment as opposed to admitting a change is necessary.

Keywords: Celebrity CEOs; media coverage; narcissism; escalating commitment

INTRODUCTION

Chief Executive Officer (CEO) research and theory has primarily focused on how the characteristics, values, schemas, and ownership of CEOs relate to organizational outcomes (e.g., Angriawan & Abebe, 2011; Daily & Dalton, 1992; Hambrick & Mason, 1984; Hayward & Hambrick, 1997). This stream of research formally known as upper echelons theory has been successful in demonstrating how CEO attributes (e.g., personality or tenure) affect organizational strategies (e.g., Chatterjee & Hambrick, 2007; Miller, 1991). The study of CEO attributes in relation to organizational outcomes represents a promising avenue to conceptualizing how modern media attention and the process of a CEO becoming a celebrity may affect a firm's business strategy. Furthermore, news stories about CEOs have been on a steady rise in popularity within American news media (Park & Berger, 2004). Yet throughout the course of CEO studies, researchers have neglected to offer neither a composite description of how celebrity and non-celebrity CEOs may differ in business strategy nor a definitive conclusion as to what extent the firm and CEO share the benefits (or detriments) of celebrity status. Moreover, relatively few studies of upper echelons theory investigate the effects of celebrity status on firm level outcomes (Treadway, Adams, Ranft, & Ferris, 2009).

To address these gaps in the research we conducted an extensive review of the literature regarding celebrity CEOs with the goal of identifying underlying themes of celebrity CEO behavior and firm strategies. As a result of our effort we are able to offer a model that better conceptualizes how the celebrity status of a CEO affects the specific strategies that are pursued by the CEO. Additionally, we are able to make the general conclusion that celebrity status disparately affects both the CEO and firm level outcomes. Specifically, we determine the general trend that CEOs are most often positively rewarded for their celebrity status while the firms employing the celebrity CEOs receive a mix of positive and negative outcomes.

To understand the implications of CEO celebrity status, we first explain a CEO's impact on the firm. This is accomplished through a brief examination of the literature regarding upper echelons theory. Second, we delve into the process and antecedents of how a CEO becomes a celebrity. Third, we look into the possible effects that celebrity status has on a given CEO's strategic decision-making ability. Additionally, we offer testable propositions regarding the possible outcomes of a celebrity CEO's decisions and how they might differ from a non-celebrity CEO. Finally, we identify the implications for future research, the limitations, and the conclusion.

UPPER ECHELONS THEORY

A CEO, in some ways, is comparable to the captain of a ship. A ship's captain may not actually own the ship and may not be the one in charge of selecting the ultimate destination that the ship is traveling toward. However, in the short run, a ship's captain is in charge of how the ship makes the trip to a specified destination. This allows a captain some autonomy in exercising their judgment in choosing the best course of travel. …

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