CEO Career Variety And Their Diversified Strategic Options

As a crucial decision maker in the organization, CEO plays an important role in making strategic decision and developing the enterprise. Especially in recent years, in the field of corporate governance research, based on upper echelons theory and the demography in the application of management, the relationship between managers’ characteristics and the enterprise strategy has attracted great attention of scholars. As the changes of the organization, the occupational environment has changed dramatically. At the same time, the subtle changes in the people with career experience. This trend also occur in the executive ranks. As one of the CEO’s demographic background characteristic, CEO with widely diverse career backgrounds and experiences has been the substantial increased. However, some CEOs have spent their entire careers in one industry and one firm. They follow more traditional career paths, rising primarily through the ranks of a single functional area within a single firm. Today’s CEOs exhibit considerable heterogeneity in their career experiences. What the different characteristics does it contain? Will it have an impact on their strategic options? As the hot issues in strategic management, we will discuss whether CEO career variety will be positively associated with their diversified strategic options or not.Based on the above problem, The first chapter makes a literal review for the domestic and foreign literature on career background and diversification strategy. We found that although many domestic scholars carry out their research in career background of CEOs, their research is more general. And the measure of this indicator only on the basis of a virtual variable. This virtual variable defined as the array of whether he served as CEO or not. This can’t interpret the rich connotation of career experience. The research conclusion is inconsisitent. The reason for this is that the research background is different. In addition, it is influenced by the way could be measured. This article is based on the concept of foreign scholars Craig defined concept for CEO career variety. In order to verify an overseas for Research CEO applicability of this feature in China, we select CEO career variety as independent variables, to study its impact on corporate diversification strategy. Few scholars studied from this perspective, this article demonstrate for the first time, there is some research value and improve the reliability of the study.This research combines the logic of upper echelons theory and resource-based theory, based on that, we analyzes the CEO career diversity embodied three areas of personal property which included CEO motivation, cognitive, social capital.And we discusses how the personal attributes affect their options of strategy type. This paper takes 1501 Chinese Public Listed Companies from Year 2005 to 2013 as samples, discusses whether CEO career variety have an impact on their diversified strategic options or not. In order to make the research more perfect, we take into account the special institutional background and CEO power intensity as moderate variable to moderate the relationship of CEO career variety and their diversified strategic options. The results show that CEO career variety will be positively associated with their diversified strategic options. High-variety CEOs will be associated with greater level of diversification. Then we introduce the moderating variable of CEO power. we build CEO power index, then we reason that CEO power play a regulatory role between CEO career and their diversified strategic options. CEO power can strengthen CEO career and their diversified strategic options. Under different property rights system, shows that the in state-owned enterprises, CEO career variety has a more significant effect on corporate diversification strategy.Few people studied from the perspective of selected in this paper, therefore, this article has certain exploratory research. Its main contribution mainly has the following several aspects:first of all, from the theoretical perspective, we select a more accurate way of measuring the connotation of the CEO career variety. The connotation of the indicators are more fully covered by the interpretation. So it can improve the reliability of the research. Secondly, in this article, through a large number of sample data and adopt scientific statistics research method, the conclusion provides the experience of selecting mechanism of CEO. We should make the CEO’s personal characteristics match the company’s strategy which will affect the company in the future development prospect and value enhancement. Furthermore, aiming at the special system background, to distinguish between state-owned holding companies and non-state-owned holding companies, its research conclusion has important significance for the current reform of state-owned holding companies. For state-owned holding companies, they should further improve the efficiency of the structure and governance. And considering the CEO power, in order to ensure the steady development of companies, the board of directors should measure the costs and benefits of CEO power and timely adjust it.