Generalist Versus Specialist Ceo: A Comparative Literature Review

Abstract

This review paper compares Generalist Chief Executive Officer (G-CEO) with Specialist Chief Executive Officer (S-CEO) by analysing the respective literature on a robust continuum of 54 years, from early 1963 to late 2017. The various study findings have been logically sorted into two resembling factors and exclusively classified into nine distinctive factors (sub-classified under three broad themes- leadership, strategic and operational perspective) between the two genres of Chief Executive Officers (CEOs). The two identified resembling factors are Predecessor CEO Specialization and Seasoned/Rookie Outside CEO. Juxtapose, the nine highlighted distinctive factors are: Innovation, Knowledge Based Strategist, Task Assignment, Compensation, Strategic Oversight, Board Expectations, Occupational Domains, Exit/Departure/Retention, and Industry Shocks Adaptability. In conclusion, both G-CEO and S-CEO have individual strength areas where they appear to be invincible, that are particularly needed to survive in the era of Industry 4.0. This paper appears to be the first literature review study within the breadth of management literature, noticeably comparing and contrasting G-CEOs with S-CEOs.

Keywords: Generalist CEOspecialist CEOtop managementindustry 40literature review

Introduction

Businesses are changing at an unprecedented pace. As projected by Schwab (2017), there will be at least three mega trends in the era of Industry 4.0; Physical, Digital and Biological- all three having dire impact on businesses and people who run the businesses. Interestingly, Schwab (2017) is of the view that organizations will not be able to readjust themselves easily. Business executives particularly Chief Executive Officers (CEOs) will have to revamp their individual and collective strengths, and stakeholders will have to redefine their expectations in the process. In this review article, we extend the discussion on the importance of CEO and how they can better adapt themselves in Industry 4.0, by classifying them into two basic genres; Generalist CEO and Specialist CEO. For reader simplicity, we will be using G-CEO and S-CEO as abbreviations in this article for Generalist and Specialist CEO respectively.

Problem Statement

The concept of Industry 4.0 is gaining momentum with the advancements in new technologies and changing business models. In terms of people development, digital skills will lead the Future of Work (FOW), which includes upskilling and reskilling of the workforce, which draws some key challenges for CEOs (Schwab, 2017). Researchers in CEO literature find that firm performance is a measure to evaluate CEO’s efficacy (Fan et al., 2007). In the favour of S-CEO, Kirkpatrick and Locke (1991) comment that their interactions have enabled them to associate CEO’s technical competence and knowledge to his or her effectiveness as a leader. On the contrary, supporting the G-CEO, Murphy and Zábojník (2004) make a point that general skills will gain more acceptability in market than the specialist ones with reference to a CEO. However, in all cases, a CEO is seen as a mastermind of a business (Ishak et al., 2012). This can be easily understood as each and every action of CEO has certain implication for the business reputation and performance. The problem is that most of the CEOs are either not ready for Industry 4.0 (Sony, 2019), or are less aware of what strategies to deploy in their businesses to navigate successfully through Industry 4.0 (Lu, 2017).

Research Questions

This paper conducts a comparative literature review to explore the breadth and depth of CEOs, and to propose different themes and viewpoints that resemble and distinct different CEOs. The paper focusses on the following two research questions:

Research Question 1: What are the resembling factors between G-CEOs and S-CEOs?

Research Question 2: What are the distinctive factors between G-CEOs and S-CEOs?

Purpose of the Study

The motivation of this review paper and the importance of selecting and studying this topic is to seek further clarity on questions like these: How important is it for CEO of a hospital to be a doctor? Can senior partner of consulting firm be successful without having originated his/her career as a consultant? Are engineering firms powerful in terms of innovation just because their CEOs are primarily engineers? Do technology firms perform better when led by technology enthusiasts? Can a sports coach do well without being an exceptional player? This paper is divided into three sections: section one introduces the importance of CEO from the broad perspective of Industry 4.0, section two presents a comparative literature review in terms of resembling and distinctive factors of G-CEOs and S-CEOs, and section three concludes the heterogeneity of empirical studies on the topic.

Research Methods

There are two clear objectives of writing this literature review paper: (i) help readers understand what has been written on G-CEOs and S-CEOs in a multi-disciplinary manner and (ii) help readers to encapsulate future trends for CEOs in terms of their work generalization and/or specialization in leading Industry 4.0. This literature review has been designed in a structured and rigorous manner. First, the review timeline was selected. An initial review plan was sorted for 25 years’ period, which then appeared inadequate as major classical theories date back to 1960s and the most recent economic patterns can be seen after 2010. Then realizing it, this paper now analyses the existing literature of 54 years, spanning from as early as 1963 to late 2017. Next, the relevant academic research publishers were to be ascertained. Therein, after doing a preliminary scanning of existing literature on the topic, the following nine publishers were identified as potential databases for G-CEO and S-CEO subject articles: EBSCO Host; Emerald Insight; Journal Citation Reports (JCR); Oxford Academic; Sage Journals; Science Direct; Springer Link; Taylor & Francis; Wiley. This then led us to a targeted extraction of 87 relevant journal articles on direct and indirect areas on our research topic.

Retrospectively, a major part of the literature review on the G-CEO and S-CEO is disintegrated in terms of the concepts, or more appropriately is somewhat disconnected in terms of common ideologies. This paper has made a successful attempt to add cohesion and more meaning to the existing literature on the subject. To proceed with this, various study findings have been logically sorted into two resembling factors and exclusively classified into nine distinctive factors between the two genres of CEOs: G-CEOs and S-CEOs. On drafting the mind map of these 11 factors (two resembling and nine distinctive), we were fortunate enough to successfully add more insights to our work. Realizing the need of reader clarity and comfort, we then condensed the nine distinctive factors into three main themes: leadership, strategic and operational perspective. This contraction of thoughts was made possible with three viewpoints in consideration i.e. competencies, board and business viewpoint respectively. This is illustrated in Table 01 .

The underlying thoughts in clubbing the various distinctive factors into perspectives and viewpoints have been very instrumental in helping us better understand the existing literature on G-CEO and S-CEO. First, the distinctive factors such as innovation, knowledge base and task assignment can be easily related to the competencies of CEO; hence the first viewpoint of ‘competency’ has been used. Second, the distinctive factors such as compensation, oversight and board expectation can be related to topics under the control of the boards; hence the ‘board’ viewpoint. Third, we classify all the remaining distinctive factors of occupational domains, exit/retention and industry shocks as topics with general day-to-day functionality; hence the ‘business’ viewpoint. As can be seen, the three broad themes have been deduced from the respective viewpoints. ‘Competency’ viewpoint fall under the ‘Leadership Perspective’ theme being a CEO individualistic criteria. ‘Board’ viewpoint falls under the ‘Strategic Perspective’ theme as that represents CEO+1 level (board members overseeing CEOs). And lastly, ‘Business’ viewpoint falls under the ‘Operational Perspective’ theme as it deals with execution and delivery of plans and procedures.

Findings

The findings of the literature review in this paper identify two resembling factors and nine distinctive factors between G-CEOs and S-CEOs. The findings on two resembling factors is discussed first, followed by nine distinctive factors. Putting these 11 factors together can help CEOs understand the contrast between G-CEOs and S-CEOs, and can enable CEOs to navigate through Industry 4.0 better:

Conclusion

Through this literature review, first resembling factors between G-CEOs and S-CEOs were analysed. The theoretical outlay by Smith and White (1987) asserts that when hiring or promoting new CEOs (G-CEO or S-CEO), specialization and strategy at the end of the outgoing CEO's tenure is matched. Continuing the similarity factors of G-CEOs and S-CEOs, the study by Balsmeier and Buchwald (2014) establishes that hiring CEO from inside or outside of the organization is taken irrespective of the generalization criteria in the first place. Adding on, Williams and Pao-Lien Chen (2016) study finds that Rookie Outsider CEOs (CEOs who are new to top management) give more firm growth in the short term, and Seasoned Outsider CEOs (CEOs who have been in top management) give more firm growth only in the long term, irrespective of being classified as G-CEOs and S-CEOs. Next, we attempted to further refine the distinctive factors between G-CEOs and S-CEOs under three themes: Leadership, Strategic and Operational Perspective. The empirical studies from the ‘Leadership’ perspective can be best related with Custódio et al. (2012) study of CEO generalization/specialization index. From the ‘Strategic’ perspective, Fee and Hadlock (2003) affirm that boards eye high-performing firms when finding and selecting CEOs for their own firm, and also they are ready to pay an increased compensation package to the right candidates in most cases. The third and last ‘Operational’ perspective also helps us to distinguish between G-CEOs and S-CEOs. The study by Gounopoulos and Pham (2017) reflects that S-CEOs possess depth of functional roles, whereas G-CEOs have breadth of work diversity. In our knowledge, this is the first review paper that compares the existing literature on generalists and specialists at the top management level, in helping us better understand G-CEOs and S-CEOs, and enabling us to decide which CEO can do better in which area to survive and thrive in the age of Industry 4.0.

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