Journal of Management Research

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Adverse Effect of Top Management Team Loss on the Performance of the Incumbent Firm in the Pharmaceutical Industry


Affiliations
1 International Centre for Organization and Innovation Studies (ICOIS) Dongbei University of Finance and Economics Dalian, China
     

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The loss of senior executives and the resulting effects on the firm's performance is relatively under researched. Using managerial human capital perspective and managerial symbolic capital perspective, we empirically tested the effects of the loss of Top Management Team (TMT) executives on the performance of 168 large pharmaceutical firms over 10 years. Our evidence indicates that the number of TMT loss, managerial ranking hierarchy, and international experience of the executives are inversely related to the performance of the firm in the year subsequent to the loss. We conclude that the loss of managerial human resource can predict negative performance in the short-run.

Keywords

Loss of TMT, Managerial Symbolic Capital, Managerial Human Capital
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  • Adverse Effect of Top Management Team Loss on the Performance of the Incumbent Firm in the Pharmaceutical Industry

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Authors

Tariq Malik
International Centre for Organization and Innovation Studies (ICOIS) Dongbei University of Finance and Economics Dalian, China
Sajal Kabiraj
International Centre for Organization and Innovation Studies (ICOIS) Dongbei University of Finance and Economics Dalian, China

Abstract


The loss of senior executives and the resulting effects on the firm's performance is relatively under researched. Using managerial human capital perspective and managerial symbolic capital perspective, we empirically tested the effects of the loss of Top Management Team (TMT) executives on the performance of 168 large pharmaceutical firms over 10 years. Our evidence indicates that the number of TMT loss, managerial ranking hierarchy, and international experience of the executives are inversely related to the performance of the firm in the year subsequent to the loss. We conclude that the loss of managerial human resource can predict negative performance in the short-run.

Keywords


Loss of TMT, Managerial Symbolic Capital, Managerial Human Capital

References