By Phin Upham
What happens when a CEO stays in power for more than ten years? Are they respected and honored or scrutinized and cast down? In the paper “Political Dynamics and the Circulation of Power: CEO succession in U.S. Industrial Corporations,” 1960-1990, William Ocasio explores important structural factors that impact CEO longevity. He views the topic through the models institutionalization of power and the circulation of power, both of which have a different way of analyzing CEO tenure as well as power accumulation, strategic maneuvering, and effects of time.
The first model, the institutionalization of power, states that a CEO has a better chance of remaining in the same position the longer he or she has had the title. On the other hand, the model of the circulation of power suggests that as time goes by, the longer that a CEO remains in office the more likely that people will grow against the CEO and that his or her ideas will be rejected for being old and stale.
However, viewing CEOs through these models holds a few assumptions. First, there are no personality characteristics in the metrics, so it’s not completely accurate to assume that these models can affect everyone in the same way. This structuralist view also doesn’t include anything about how the CEO left the company or where they went next. For example, a CEO could have left the company voluntarily. However, it’s apparent that the author of this essay is not concerned with the dropout rate, but with the ability of a CEO to remain in power when they want to stay in office. CEOs that leave the company voluntarily should be taken out of the research, yet it can be difficult to distinguish between voluntary and involuntary drop out.
Ocasio’s research demonstrates especially clear logic, and he shows the data in several different formats with short descriptions of the important effects. The results of his research reveal the conclusion that the circulation of power model applies during the first ten years of tenure. However, after the first decade, the scenario shifts and the CEO’s circumstances seem to mirror the situations described by the consolidation of power model.
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