Information Asymmetries in the Hiring Process and the Risk of New Leader Dismissal: Insights from English Premier League Soccer Organizations |
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| Authors: | Malay N Desai Andy Lockett David Paton |
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| Affiliation: | 1. Nottingham University Business School, University of Nottingham, Nottingham, UK;2. Warwick Business School, University of Warwick, Coventry, UK |
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| Abstract: | Why are some new leaders dismissed more quickly than others? Adopting agency theory logic, the authors examine how different succession contexts shape boards’ information asymmetries about a potential candidate's competencies in the hiring process, which influences the propensity of making poor hiring decisions and hence the risk of new leader dismissal. Employing duration analysis on a sample of 164 newly appointed leaders in the English premier league (1996–2014), the authors find that the risk of new leader dismissal is: (i) greater when the predecessor leader's exit was initiated by them rather than by the board; (ii) greater when following a longer‐tenured predecessor; and (iii) lower for outside successions compared with inside successions. |
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