From transactional to transformational: Exploring the role of leadership style on CEO succession outcomes

Abstract

Purpose

The purpose of this paper is to explore whether Chief Executive Officers’ (CEOs) discrepant leadership styles are reflected on CEO succession outcomes, operationalised as changes to employee views of the organisation following the succession.

Design/methodology/approach

Hypotheses were tested in a sample of 230 employees who completed an online survey at four time points over a three-year period. Linear mixed models analyses tested for significant changes to alignment, participation, learning culture, organisational commitment and engagement perceptions over time. Qualitative data were content-analysed to ascertain the CEOs’ leadership styles and explore employee views of the organisation.

Findings

While alignment and participation scores did not significantly increase following the CEO succession, learning culture, organisational commitment and engagement increased significantly.

Research limitations/implications

This study adds to the limited research on CEO succession. It suggests that what renders a succession adaptive or disruptive may be contingent on the leadership styles of outgoing and incoming CEOs.

Practical implications

The transition from a transactional to a transformational CEO may have a stronger impact on motivational and attitudinal outcomes (e.g. engagement) than on operational outcomes (e.g. alignment).

Originality/value

This study is the first to longitudinally examine a range employee outcomes of CEO succession considering the incoming and outgoing CEOs’ discrepant leadership styles. It extends the leadership literature by empirically showing that, despite the disruption underlying a succession event, employee views of the organisation improve significantly following the transition from a transactional to a transformational leader.

Citation

Kuntz, J., Davies, B. and Naswall, K. (2019), "From transactional to transformational: Exploring the role of leadership style on CEO succession outcomes", Leadership & Organization Development Journal, Vol. 40 No. 7, pp. 815-827. https://doi.org/10.1108/LODJ-01-2019-0012