CEO military experience and corporate restructuring strategies

Abstract

Given its emphasis on value-based training, military experience has the potential to shape a person’s character and professional decision-making. In this study, we explore the influence of CEO military experience on corporate restructuring strategies. Drawing from imprinting theory, we argue that CEOs with military experience are more likely to pursue corporate restructuring strategies compared to their non-military counterparts, given the alignment between the values espoused by ex-military CEOs (e.g., discipline, efficiency, and goal-oriented behavior) and the refocusing objectives of corporate restructuring strategies. Furthermore, we propose that longer tenure weakens this relationship. Our analysis of data from publicly traded firms paints a mixed picture. Firms led by ex-military CEOs are more likely to acquire and engage in financial restructuring via asset sell-offs but are less inclined to pursue divestitures. As proposed, longer tenure weakens the impact of ex-military CEOs on portfolio and organizational restructuring. Implications for research and practice are discussed.