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Disappointment is the rule rather than the exception when CEOs are hired from high- performing companies Firms tend to hire CEO’s from high-performing backgrounds with the thought that they will continue their success in their new position. However, in this article it is discussed that sometimes continued success is not the case when you hire a CEO from a high performing firm. In fact, the opposite occurs and the firm does not do as well in future stocks and profit margins. This result could stem from hiring CEO’s that were comfortable in their high-performing firm and were used to things being a certain way that when they switch to a new firm they did not
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Unformatted text preview: have all the knowledge they needed in the new firm to make it as big a success as their previous position. Therefore prior firm success is a noisy indicator of managerial skill that does not always transfer across different organizations. So, the tendency to hire executives from highly performing predecessor firms is greatest among firms with busy or inattentive boards. http://aaahq.org/newsroom/Disappointment2011_08_01.htm http://highered.mcgraw-hill.com/sites/0078136628/student_view0/chapter3/powerpoint_presentations.html...
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