4.2 Article

The career-horizon problem in capital investments for lone-founder and long-tenure acquirer CEOs in their final career stage

Journal

STRATEGIC ORGANIZATION
Volume 17, Issue 3, Pages 334-362

Publisher

SAGE PUBLICATIONS LTD
DOI: 10.1177/1476127018789594

Keywords

acquirer; capital investments; career horizon; CEO; final career stage; founder

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In this study, we apply organizational identification theory to enrich our knowledge of the career-horizon problem when CEOs are approaching retirement. The extant literature suggests that the closer a CEO is to retirement, the more likely she or he is to avoid long-term firm investments. Focusing on capital investments, we argue that the distinctive organizational identification with the firm of lone-founder CEOs and long-tenure acquirer CEOs can moderate the likelihood that the closer a CEO is to retirement, the more likely she or he is to avoid capital investments. We test and validate our hypotheses on a sample of CEOs in S&P 1500 non-financial firms between 1999 and 2010. This article contributes to the literature on CEO career horizons by providing a new and more fine-grained perspective on the important question of how different types of CEOs consider capital investments and the future of their firms as they approach retirement.

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