The Power of Calling: How Founder CEOs Drive Ambidexterity and Innovation in Firms

Abstract

This study investigates the phenomenon of founder CEOs playing an inordinately crucial role in achieving firm innovation performance. While existing research compares the effectiveness of founder and non-founder CEOs, the reasons behind founder CEOs’ advantage in achieving high innovation performance remain unclear. Building on upper echelons theory, this study explores micro-foundations underlying this phenomenon. We propose that CEO founder status positively influences innovation performance through the application of ambidextrous firm strategy, with such effects being moderated by the extent to which CEOs experience a sense of calling for their work. Based on data from 200 small- and medium-sized high-tech enterprises in China, we find that founder, as compared to non-founder, CEOs have a more positive relationship with innovation performance, mediated by ambidextrous firm strategy, and this effect is strengthened by calling for their work. These findings provide new insights regarding how and when a ‘founder advantage’ is most likely to be achieved regarding innovation performance. Moreover, by focusing on Chinese firms, this study responds to calls for expanding management research beyond Western contexts, enriching our understanding of founder CEOs and innovation in diverse cultural settings.