Theses and Dissertations

Date of Award


Document Type


Degree Name

Doctor of Philosophy (PhD)



First Advisor

Dr. Michael A. Abebe

Second Advisor

Dr. Wanrong Hou

Third Advisor

Dr. Jennifer L. Welbourne


How do dominant (powerful) Chief Executive Officers (CEOs) influence corporate strategic behavior? Do they disproportionately focus on restructuring (cost-cutting or efficiency-enhancing) strategies in an attempt to run an efficient business? Alternatively, do they instead pursue aggressive (domain-creating) corporate strategies (i.e. engage in "empire-building") that not only expand the scope of the firm but also their personal influence? Current research evidence in the corporate governance literature is ambiguous when it comes to the relationship between CEO power and the choice of conservative vs. aggressive corporate strategies. Most studies in the literature use a piece meal approach and examine the influence of CEO power on the emphasis on either conservative or aggressive strategies (e.g. Bigley & Wiersema, 2002; Ang, de Jong & Van der Poel, 2014). Consequently, there is a need for a research that comprehensively examines the influence of CEO power on both corporate strategies. It is important to understand this relationship given that the strategies chosen bear tremendous influence on firm performance. This dissertation broadly explored the influence that powerful CEOs had on corporate restructuring and aggressive strategic behavior. Specifically, this dissertation sought to achieve three main objectives. First, it explored the link between CEO power and conservative and aggressive corporate strategies. Second, it explored the governance, organizational, and industry contexts in which CEO power led to higher engagement in either aggressive or conservative corporate strategies. Specifically, the proportion of outside board of directors, organizational slack resources, and industry munificence were examined. Finally, the link between aggressive and conservative strategies and firm performance was empirically explored. This dissertation drew from prospect and agency theories as its major theoretical foundations to discuss the overarching theme of executive decision-making in the context of risk. Despite the robust literature on the effect of CEO power, the results of the empirical analyses showed that CEO power did not appear to be a major influence on either type of corporate strategy. However, the composition of the Board of Directors did lessen the influence of CEO power on aggressive strategies such as acquisitions and strategic alliances. Similarly, industry munificence weakened the relationship between CEO power and divestitures which is a major part of conservative corporate strategies. Lastly, conservative and aggressive strategies held a mixed impact on firm performance. While retrenchment strategies were found to be positively related to Return on Assets (ROA), downsizing was in fact negatively related to Return on Equity (ROE). Neither conservative nor aggressive corporate actions were found to influence Tobin's Q, which is a measure of long-term market performance.


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