Strategic turnaround: unraveling the impact of CEO power on firm performance during retrenchment

Misal Ijaz, Naila Sadiq, Syeda Fizza Abbas
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Abstract

Purpose

This paper aims to investigate the impact of retrenchment strategy on firm performance in the context of Pakistani firms while considering the moderating role of chief executive officer (CEO) power. By examining the influence of CEO duality and CEO share ownership on the relationship, this study contributes to strategic management and corporate governance knowledge within the Pakistani business environment.

Design/methodology/approach

A quantitative approach was used to analyze the relationship using data from annual financial statements. The sample consisted of 76 companies from the KSE-100 index from the year 2015 to 2020. Random effects regression models were used, along with hierarchical regression to explore the moderating effect of CEO power.

Findings

The findings demonstrate that the implementation of a retrenchment strategy positively impacts firm performance in Pakistani firms. The study also reveals that CEO power plays a crucial role in strengthening the relationship between retrenchment strategy and firm performance. Moreover, the study highlights the importance of considering the temporal sequence, size and age of firms when examining the impact of CEO power and retrenchment strategy on firm performance.

Research limitations/implications

The study enhances the understanding of the contingent nature of retrenchment strategies and the influence of CEO power in the Pakistani business context. Practically, the research contributes to strategic management and corporate governance dynamics, facilitating the development of strategies that enhance firm performance and sustainability in Pakistan.

Originality/value

This research provides original insights by specifically focusing on the Pakistani context and analyzing the interplay between retrenchment strategy, CEO power and firm performance. The study adds to the limited literature on the relationship between retrenchment and performance in the Pakistani business environment. Additionally, it highlights the significance of CEO power as a critical factor in determining the success of retrenchment.

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战略转机:解读裁员期间首席执行官权力对公司业绩的影响
目的 本文旨在研究巴基斯坦公司裁员战略对公司业绩的影响,同时考虑首席执行官(CEO)权力的调节作用。通过研究首席执行官双重性和首席执行官持股对这一关系的影响,本研究为巴基斯坦商业环境中的战略管理和公司治理知识做出了贡献。样本包括 2015 年至 2020 年 KSE-100 指数中的 76 家公司。研究采用随机效应回归模型和分层回归来探讨首席执行官权力的调节作用。研究结果研究结果表明,在巴基斯坦企业中,裁员战略的实施会对企业绩效产生积极影响。研究还表明,首席执行官的权力在加强裁员战略与公司业绩之间的关系方面发挥着至关重要的作用。此外,本研究还强调了在研究首席执行官权力和裁员战略对公司业绩的影响时,考虑公司的时间顺序、规模和年龄的重要性。 研究局限/意义 本研究加深了人们对裁员战略的偶然性以及首席执行官权力在巴基斯坦商业环境中的影响的理解。在实践中,该研究有助于战略管理和公司治理动态,促进巴基斯坦制定可提高公司业绩和可持续性的战略。原创性/价值该研究通过特别关注巴基斯坦背景并分析裁员战略、首席执行官权力和公司业绩之间的相互作用,提供了原创性见解。本研究补充了巴基斯坦商业环境中有关裁员与绩效之间关系的有限文献。此外,它还强调了首席执行官权力作为决定裁员成功与否的关键因素的重要性。
本文章由计算机程序翻译,如有差异,请以英文原文为准。
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来源期刊
CiteScore
3.90
自引率
6.70%
发文量
13
期刊介绍: The International Journal of Law and Management is a leading journal addressing all aspects of regulation and law as they impact on organisational development, operations and leadership. Organisations and their leaders operate in an increasingly complex world of emerging regulation across national and international boundaries. The International Journal of Law and Management seeks to acknowledge the dynamics of that environment and provide a platform for articles and contributions to stimulate scholarly debate in the development of law and practice. The International Journal of Law and Management seeks to present the latest research on policy, practice and theoretical perspectives and their impact on the development and leadership of organisations. Contributions of a multi-disciplinary nature are welcome. Coverage includes, but is not limited to: -Employment and industrial law- Corporate governance and social responsibility- Intellectual property- Corporate law and finance- Insolvency- Commercial law and consumer protection- Environmental law- Taxation- Competition law- Regulatory theory
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