CEOs can execute a strong influence on the success of their firms. This study investigates the change of CEOs (leadership succession) at foreign subsidiaries. Even though some research investigated the reasons behind and outcomes of leadership succession at large American companies, we know little about the leadership succession at foreign subsidiaries. The role of the subsidiary CEO might be even more important for firm performance because of the smaller size of the operation and more complex job roles, e.g. coordination with headquarters and local stakeholders.
This exploratory study investigates the reasons why and with whom CEOs of foreign subsidiaries are replaced and how these influence firm performance. We analyze more than 3,000 foreign subsidiaries operating in Japan over the time period from 2002 to 2010. Even though many foreign subsidiaries increasingly replace expatriates with local (Japanese) CEOs, we also observe the opposite trend. Performance outcomes are mixed and depend on certain boundary conditions. Based on the research results, this presentation will provide theoretical implications as well as managerial recommendations.
Fabian Jintae Froese is Assistant Professor of International Business at Korea University. He has earned a doctorate in International Business from the University of St. Gallen and a Ph.D. in sociology from Waseda University. His research interests lie in international human resource management and cross-cultural management. His research has been published in journals such as Journal of World Business, International Journal of Human Resource Management, International Business Review, and International Journal of Intercultural Relations. In 2011, he received the Palgrave Macmillan and Association of Japanese Business Studies Best Paper Award.