CEO replacement, top management vacancy, and the sequence of top management team changes in high technology turnaround companies

This study extends the literature on CEO replacement, top management change, and corporate turnaround by examining the sequence of top management team change events and turnaround outcomes among declining firms in industries affected by technological innovation and digitalization, including information technology, electronics, imaging and communications. This study focuses specifically on the top management change events before and after CEO replacement during the turnaround attempts. Using 12 cases of successful/unsuccessful turnaround matched pairs, we adopt a two-phase case study research approach, first generating insights from six cases (three pairs), and then cross validating our findings with additional six cases (three pairs). Through the qualitative examination of these cases, we uncover top management vacancy as a new theoretical construct and refine an existing construct, top management change, by differentiating between primary and support functions. We then observe distinct patterns of CEO replacement and top management changes separating successful and unsuccessful turnarounds. Our case findings indicate that successful turnarounds are characterized by top management vacancy in primary functions before the new CEO arrival and by top management stability in support functions after the new CEO arrival, and that unsuccessful turnarounds involve top management personnel replacement in primary functions after the new CEO arrival. Based on the case findings and related literature, we propose a theoretical model for CEO replacement, top management change, and corporate turnaround.