The power of words - CEOs' psychological influences: exit, change & hold: the stories of leadership succession: three empirical studies on companies in the FTSE All-Share Index

Leadership transition is a critical period for any organizations. By researching finns in the FTSE All-Share Index, this thesis offers three empirical studies to explore some interesting problems in this important epoch. The samples used for the research are those companies that changed their CEOs in a six-year (from 2002 to 2007) window. This study identified the importance of CEOs' psychological factors not only for the predecessors but also for the new leaders. The first study looks at the old CEOs before the CEO turnover; the second and third studies follow the new CEOs longitudinally after the succession. The first essay investigates how old CEOs' psychological factors influence their types of departure, i.e. voluntary and involuntary CEO turnovers. This study integrates both cognitive and emotional factors, appreciating the proactive roles of CEOs in the leadership succession process. Apart from conventional reasons, e.g. firms' prior perfonnance, old CEOs' power, their future focus attention (FF A) and negative emotion (NE) provide crucial explanations determining the turnover types. Empirically, this study identifies that the level of CEOs' FF A, signaling the planned career management behaviors, will increase the likelihood of voluntary CEO turnover. I also found that the level of CEOs' NE, reflecting the uncooperative behaviors, will increase the likelihood of involuntary CEO turnover. The second essay studies how new CEOs' psychological factors influence the post succession strategic changes (PSSC) of firms. Using the trilogy of mind perspective, on top of cognition, I advocate that new CEOs' emotion and conation serve as the impetus for the PSSC. By tracing the identical new CEOs over years after their succession, the empirical results of this longitudinal study demonstrate that those intra-individual psychological (time-varying) factors of new CEOs are important for the PSSc. New CEOs' future focus attention (FF A), commitment to change (C2C) will significantly increase the PSSC and new CEOs' negative emotion (NE) will significantly reduce the PSSC. Based on the cognitive continuum theory (CCT), the third research study advocates that new CEOs' cognitive reasoning provides new explanations for the mechanism behind the cash holding phenomenon. It is down to CEOs to appreciate the needs and the associated risks. I identify that the degree of analysis (DoA) in new CEOs' cognitive continuum will increase firms' cash holding level because DoA tends to raise the calculated transaction costs, the management controls, the uncertainty avoidance behaviors and the opportunity costs. Using a psycholinguistic approach and computer-aided text analysis (CATA) technique, directly measuring CEOs' mind, we expect to explore the "black box" ofCEOs' roles comprehensively in the leadership succession period