The CEO selection decision process: Bounded rationality and decision component ordering

This paper presents a model of the basic components of the CEO selection decision process used by corporate boards of directors. It describes selection as a purposeful and boundedly ratinal process characterized by three key components: aspiration, judgment and justification. Each of these components is described in detail. In addition, the ordering of these elements is examined. Specifically, it is suggested that the exact ordering varies depending on a number of factors. Among the most important are (1) the performance of the organization, (2) the availability of qualified candidates and (3) the standardization of the CEO’s office within the organization at the time of the succession decision. Examples are provided to help illustrate various order effects. Following this, sample research propositions are presented to assist researchers in future studies devoted to this topic.