Organizational structure and CEO dominance

Abstract

We explore the effects of chief executive officers’ (CEOs’) personal dominance—an idiosyncratic character trait strongly associated with a desire for influence and control—on two fundamental organizational design decisions: the CEO’s span of control (1) and her delegation of responsibilities as reflected in the appointment of a chief operating officer (COO) (2). Linking three original measures of CEO dominance based on quarterly earnings calls with manually collected data on span of control and COO positions for a sample of CEOs presiding over large US corporations, we demonstrate that CEOs who are high in dominance have a significantly larger personal span of control and delegate fewer decision rights than less-dominant CEOs. We discuss implications of our findings and future questions from an organizational design perspective.