infonet-economy

Strategic coherence positively impacts firm performance. However, we still lack an understanding of its antecedents. In this paper, we introduce a comprehensive model combining CEO succession events and predecessor retention as well as CEO personality and managerial discretion as determinants of firm strategic coherence. Succession events negatively impact strategic coherence, while this relationship is negatively moderated by predecessor retention. Once appointed, a CEO’s personality impacts the level of a firms’ strategic coherence. More specifically, CEO narcissism decreases and core self evaluation increases strategic coherence. The degree to which these aspects of CEO personality manifest in strategic coherence is positively moderated by CEO discretion. Finally, we suggest a panel regression to test the hypothesized relationships in a sample of the top 31 Swiss acquirers.