Political change and turnovers: How do political principals consider organizational, individual, and performance information?

Bong Hwan Kim, Sounman Hong

Research output: Contribution to journalArticle

1 Citation (Scopus)

Abstract

This study explores whether changes in political leadership affect the survival of chief executive officers (CEOs) of Korean state-owned enterprises (SOEs). On the basis of observations of the turnovers of 18 SOEs’ executives during 2000–2015, we demonstrate that political change is significantly associated with CEO turnover, even in the presence of institutional systems designed to achieve political insularity. That association may serve as suggestive but compelling evidence of presidential interventions in top managerial turnovers in Korean SOEs. We also find that political principals may utilize organizational- or individual-level information to gauge the loyalty and competence of SOE executives. Specifically, we demonstrate that executives who have received a poor performance evaluation are more likely to resign following a political change, suggesting the existence of a negativity bias in the political consideration of performance-related information. Some personal characteristics of executives, such as their career and educational histories, also moderate the impact of political changes.

Original languageEnglish
Pages (from-to)291-308
Number of pages18
JournalPublic Choice
Volume181
Issue number3-4
DOIs
Publication statusPublished - 2019 Dec 1

Fingerprint

political change
turnover
performance
political leadership
loyalty
State-owned enterprises
Political change
Turnover
career
trend
history
evaluation
evidence
Chief executive officer

All Science Journal Classification (ASJC) codes

  • Sociology and Political Science
  • Economics and Econometrics

Cite this

@article{158243faa6064aac86c2d9e9accec18f,
title = "Political change and turnovers: How do political principals consider organizational, individual, and performance information?",
abstract = "This study explores whether changes in political leadership affect the survival of chief executive officers (CEOs) of Korean state-owned enterprises (SOEs). On the basis of observations of the turnovers of 18 SOEs’ executives during 2000–2015, we demonstrate that political change is significantly associated with CEO turnover, even in the presence of institutional systems designed to achieve political insularity. That association may serve as suggestive but compelling evidence of presidential interventions in top managerial turnovers in Korean SOEs. We also find that political principals may utilize organizational- or individual-level information to gauge the loyalty and competence of SOE executives. Specifically, we demonstrate that executives who have received a poor performance evaluation are more likely to resign following a political change, suggesting the existence of a negativity bias in the political consideration of performance-related information. Some personal characteristics of executives, such as their career and educational histories, also moderate the impact of political changes.",
author = "Kim, {Bong Hwan} and Sounman Hong",
year = "2019",
month = "12",
day = "1",
doi = "10.1007/s11127-019-00655-x",
language = "English",
volume = "181",
pages = "291--308",
journal = "Public Choice",
issn = "0048-5829",
publisher = "Springer Netherlands",
number = "3-4",

}

Political change and turnovers : How do political principals consider organizational, individual, and performance information? / Kim, Bong Hwan; Hong, Sounman.

In: Public Choice, Vol. 181, No. 3-4, 01.12.2019, p. 291-308.

Research output: Contribution to journalArticle

TY - JOUR

T1 - Political change and turnovers

T2 - How do political principals consider organizational, individual, and performance information?

AU - Kim, Bong Hwan

AU - Hong, Sounman

PY - 2019/12/1

Y1 - 2019/12/1

N2 - This study explores whether changes in political leadership affect the survival of chief executive officers (CEOs) of Korean state-owned enterprises (SOEs). On the basis of observations of the turnovers of 18 SOEs’ executives during 2000–2015, we demonstrate that political change is significantly associated with CEO turnover, even in the presence of institutional systems designed to achieve political insularity. That association may serve as suggestive but compelling evidence of presidential interventions in top managerial turnovers in Korean SOEs. We also find that political principals may utilize organizational- or individual-level information to gauge the loyalty and competence of SOE executives. Specifically, we demonstrate that executives who have received a poor performance evaluation are more likely to resign following a political change, suggesting the existence of a negativity bias in the political consideration of performance-related information. Some personal characteristics of executives, such as their career and educational histories, also moderate the impact of political changes.

AB - This study explores whether changes in political leadership affect the survival of chief executive officers (CEOs) of Korean state-owned enterprises (SOEs). On the basis of observations of the turnovers of 18 SOEs’ executives during 2000–2015, we demonstrate that political change is significantly associated with CEO turnover, even in the presence of institutional systems designed to achieve political insularity. That association may serve as suggestive but compelling evidence of presidential interventions in top managerial turnovers in Korean SOEs. We also find that political principals may utilize organizational- or individual-level information to gauge the loyalty and competence of SOE executives. Specifically, we demonstrate that executives who have received a poor performance evaluation are more likely to resign following a political change, suggesting the existence of a negativity bias in the political consideration of performance-related information. Some personal characteristics of executives, such as their career and educational histories, also moderate the impact of political changes.

UR - http://www.scopus.com/inward/record.url?scp=85063025629&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=85063025629&partnerID=8YFLogxK

U2 - 10.1007/s11127-019-00655-x

DO - 10.1007/s11127-019-00655-x

M3 - Article

AN - SCOPUS:85063025629

VL - 181

SP - 291

EP - 308

JO - Public Choice

JF - Public Choice

SN - 0048-5829

IS - 3-4

ER -