Review Quiz 2 Flashcards
why is it so difficult to find a great new ceo
- not a lot of candidates with the right skill set
- difficult to evaluate skills in a job interview
- demanding and high stakes job
what do CEOs exhibit higher than the average person
they have higher cognative, non-cognative, ability and emotional and psychological stability
have internal candidates ever been ceos?
no they have not
have external candidates ever been ceos?
might have previous experience
what are the pros of being an internal hire CEO
- know their leadership style
- less epensive than external hire
- great in times of company stability
- can groom the executive specifically for this position and address their weaknesses
- quicker and smoother transition
- continuity and stability within the comapny
- internal CEOs tend to outperform external hires
what are the cons of an internal ceo
- no previous ceo experience
- need to commit to plan in advance
- more of the same thing and will not drive change
what is heir apparent internal promotion
the leading candidate to become ceo is promoted to president or COO and gets groomed for the ceo position
what are the negatives of heir apparent
- need to have clear responsibilities that do not overlap with that of the current ceo
- there is a risk of being stuck as a lifetime COO
what is the horse race internal promotion and what are two advantages to this
company promotes 2 or more candidates into high level operating positions who will compete to become ceo
- can “test drive” the candidates
- have to commitment to a specific candidate
what are 3 negatives of the horse race hiring
- public and brings unwanted attention
- creates internal separation
- a “brain drain” happens when losers resign
when would an external ceo traditionally be hired and how has that changed
would be hired when the company was in trouble, but now they hire even if they are doing well
what are pros of externla hiring of ceo
- will provide change, new strategy, and vision
- have previous experience
- no “work baggage” to bring to new job
what are cons of external hiring
- longer onboarding process
- higher risk of being a poor fit in terms of culture, leadrship style, industry knowledge
- expensive
why is successionn planning importatnt
- reduces hiring costs
- reduces fear in shareholders
- better prepared for crisis
- shows transparency and preparedness
how is succession planning done
- have internal and external candidates
- full engagement of board and management
