Senior Leadership: Succession Effects on Organizational Performance

Private sector research on organizational performance impact due to senior leadership succession has been inconclusive. However, the research generally falls under three main theories. They are common sense theory, vicious cycle theory, and scapegoating theory. They state positive relationships between an organizations performance and senior leadership succession, negative relationship between an organizations performance and senior leadership succession, and no relationship between an organizations performance and senior leadership succession respectively. In addition to these three major theories, the research also shows less disruption with insider succession and more strategic change with outsider succession. Looking at senior commanders at United Nations Command and Eighth United States Army during the Korean War reflects the lack of consensus in private sector research on senior leadership succession. When measuring strategic objective achievement rate, friendly casualty rate, territory gained, number of Medal of Honor recipients, and public opinion poll, the organizations performed better in three out of five areas before the relief than after relief. Most conclusive research contradicts private sector research on insider succession. When measuring the five variables, organizations performed better with outsider succession than insider succession.