In the research paper “How Successor Pre-Succession Firm Experience Affects Post-Succession Performance in Family Firms” the two young researches take a Carnegie School Perspective to analyze insularity biases found in CEOs. Warning of such biases can even be found in Old Norse philosophy from the Viking Age in the Poetic Edda (Hávamál, The Words of Odin the High One, 26): “The unwise man thinks all to know; While he sits by his hearth at home; Quickly finds when questioned by others; That he knows nothing at all.” (Bray, 1908; Taylor & Auden, 1969). The researchers show how taking this perspective can be used to answer the timeless question “Should successors gain experience within the organization where they are bound to lead?”
Previously, empirical evidence on firm performance effects of pre-succession firm experience was artificially dichotomy-driven (insider/outsider) and provided contradictory results. Adding to this unresolved theoretical fault-lines existed: While psychology-inspired managerial decision-making literature highlighted negative aspects of such experience due to cognitive biases, stewardship-inspired arguments highlighted positive effects, especially in family firm. The researcher’s mixed-methods study reconceptualizes pre-succession firm experience as a multivalent construct that is sourced by both arguments. In a multi-level contingency analysis, they confirm a non-trivial interplay of positive and negative aspects for important insider CEO successor types, which has important implications for the study of relay successions.