Mahdi Salehi, Ameneh Bazrafshan and Mahdieh Hosseinkamal
This paper aims to investigate the relationship between a CEO's ability and authority with firm performance. The authors used a sample of 127 Iranian listed firms for over seven…
Abstract
Purpose
This paper aims to investigate the relationship between a CEO's ability and authority with firm performance. The authors used a sample of 127 Iranian listed firms for over seven years, from 2011 to 2017.
Design/methodology/approach
The authors used data envelopment analysis (DEA) to evaluate managers' abilities, and the authors used business strategies to gauge authorities. Also, the methods of Fama–French and Herfindal–Hirschman were used for 889 firm-year observations.
Findings
The results show that managers' ability based on return on assets can affect firm performance, and skilled managers can improve performance.
Originality/value
In Iran, managers' abilities and other variables can impact it has been studied. Still, no study has been conducted on managers' strength and their level of authority with the presence of supervision on them.