The paper 'Reasons for Failure of Chief Executive Officers" is a good example of business coursework. The question on the reason for the failure of Chief Executive Officers (CEOs) is timely given the ongoing global financial crisis that the world economy faces this year which resulted to the fallout of leading corporations and of fast-growing companies. Board of Directors (BODs) is compelled to fire CEOs who do not perform at par with their expectations particularly in strengthening the operation of their respective companies. However, not all BODs are willing to fire their CEOs, even if they want to.
This happens when the cost of firing CEOs are higher compared to its advantages particularly when the firing leads to losses of income among shareholders since these CEOs functions are deeply embedded into operations of corporations (Carolyn, Caroll & Griffth, John, 2007). This behavior of maximizing the value of CEOs even if they perform badly is a bitter pill that the BODs have to swallow in order to deter further corporate crisis. Thus, it is relevant to know the reasons for failures of CEOs to give warning signals on how to avoid these pitfalls and install necessary measures or support system that will help mitigate the corporate crisis.
It will also help strengthen the way CEOs function in their roles. This paper uses the nine lessons from the failures of CEOs that Glenn Waring (n. d) presented in his article published in Leadership Excellence. These lessons will be presented in the form of factors or reasons contributing to the failures of CEOs. It will be discussed individually expounded by other information gathered from the other seven kinds of literature from various authors.
Thus, the structure of the paper will present the factors contributing to the reasons for the CEOs failures as headings followed by discussions from this literature. Nine Reasons for Failures of CEOs Inability to see the bigger picture. There are times that the weights of problems besetting CEOs are wider in scope particularly in a globalized market. Inability to discern the impact of a crisis in this globalize scope and hang on to some core businesses of the corporation that might not work in the face of the crisis being experienced by the company might be detrimental in the overall performance of the corporation which might lead to losses and subsequent failure on the part of the CEO. Another example of this factor for failure is the inability to see the bigger picture company’ s growth in the long run by committing legal blunders during startup that eventually will make CEOs lose the hold of their own company.
This is particularly true for CEOs of emerging companies. Founder of Regency Coffee, Timothy Tulloch, made this mistake at the start when he lost sight of the long term effect of his partnership with Ronald Burton for the expansion of his business without the proper legal documents to lay out the procedures and distribution of the partnership in case of its dissolution (Gruner, 1997, p.
64). He was too concerned with getting the money needed for his business expansion and too appreciative of the investment that Burton offered. Eventually, their partnership did not last. However, in the absence of an agreement for the distribution of shares in case the partnership dissolves, Tulloch ended up giving up the company to Burton which eventually failed.
Regency Coffee was billeted as the number 148 of the 500 fast-growing companies in the 1990s prior to the crisis.
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