Power and Managerial Dismissal: Scapegoating at the Top

Warren Boeker Columbia University A study of 67 organizations over a 22-year period is used to examine the likelihood of chief executive and top management dismissal as a result of organizational performance and the distribution of power in the organization. Powerful chief executives are found to be less likely than less powerful chief executives to be dismissed during performance downturns. Instead, they displace blame for poor performance onto their subordinates, the top managers of the organization, who subsequently are replaced, while the chief executive remains. The paper examines the role that board composition and organization ownership play in influencing the amount of power the chief executive is likely to possess and explores what actions organizations with poor performance but powerful chief executives might take.'