Wednesday, September 20, 2006
[IWS] ILR IMPACT BRIEFS: CEOs and LAYOFFS: Sometimes the CEO Suffers Similar Fate [August 2006]
IWS Documented News Service
_______________________________
Institute for Workplace Studies----------------- Professor Samuel B. Bacharach
School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies
Cornell University
16 East 34th Street, 4th floor---------------------- Stuart Basefsky
New York, NY 10016 -------------------------------Director, IWS News Bureau
________________________________________________________________________
The following is the twelfth document in a new publication series produced by the ILR School.
ILR Impact Briefs
http://digitalcommons.ilr.cornell.edu/impactbrief
The ILR Impact Brief series highlights the research and project based work conducted by ILR faculty that is relevant to workplace issues and public policy.
BRIEF #12 / August 2006 / WWW.ILR.CORNELL.EDU
CEOs and Layoffs: Sometimes the CEO Suffers Similar Fate
by KEVIN F. HALLOCK
Professor of Human Resource Studies (ILR)
SHERRILYN M. BILLGER
Illinois State University
http://digitalcommons.ilr.cornell.edu/briefs/19/
Research question:
Are chief executive officers more likely to lose their jobs in the first year or two following the announcement of mass layoffs?
Conclusion:
The relationship between employee layoffs and CEO turnover has varied over the 1970-2000 time period examined in this study and depends, in part, on the particulars of the company and its chief executive. There is limited evidence that announced layoffs are positively associated with the probability that a CEO will resign. The chances of this happening are significantly greater when the price of a company�s stock drops in response to the planned reduction in force; with layoffs increasingly perceived as good news for companies, however, in recent years stock prices have reacted less negatively to these events.
Workplace implications:
The labor market for chief executives is not immune to the aftershocks of mass layoffs. Decisions about workforce reductions may be motivated by a CEO�s desire to retain his or her own job, but other constituencies� interpretation of the event matters more. Corporate boards and investors may regard layoffs either as a sign of management failure or as a furthering of strategic goals. Perceptions and subsequent actions by these stakeholders will determine whether the top executive is punished or rewarded.
AND MORE....
Source publication: �Mass Layoffs and CEO Turnover� appeared in Industrial Relations, Vol. 44, No. 3 (July 2005).
For related documentation, see --
http://digitalcommons.ilr.cornell.edu/hrpubs/15/
Suggested Citation
Hallock, K. F. & Billger, S. M. (2006). CEOs and layoffs: Sometimes the CEO suffers similar fate (ILR Impact Brief #12). Ithaca, NY: School of Industrial and Labor Relations, Cornell University.
http://digitalcommons.ilr.cornell.edu/briefs/19/
Required Publisher Statement
Copyright by Cornell University
[ILR Impact Briefs are written and/or edited by Maralyn Edid]
______________________________
This information is provided to subscribers, friends, faculty, students and alumni of the School of Industrial & Labor Relations (ILR). It is a service of the Institute for Workplace Studies (IWS) in New York City. Stuart Basefsky is responsible for the selection of the contents which is intended to keep researchers, companies, workers, and governments aware of the latest information related to ILR disciplines as it becomes available for the purposes of research, understanding and debate. The content does not reflect the opinions or positions of Cornell University, the School of Industrial & Labor Relations, or that of Mr. Basefsky and should not be construed as such. The service is unique in that it provides the original source documentation, via links, behind the news and research of the day. Use of the information provided is unrestricted. However, it is requested that users acknowledge that the information was found via the IWS Documented News Service.
Stuart Basefsky
Director, IWS News Bureau
Institute for Workplace Studies
Cornell/ILR School
16 E. 34th Street, 4th Floor
New York, NY 10016
Telephone: (607) 255-2703
Fax: (607) 255-9641
E-mail: smb6@cornell.edu
****************************************
_______________________________
Institute for Workplace Studies----------------- Professor Samuel B. Bacharach
School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies
Cornell University
16 East 34th Street, 4th floor---------------------- Stuart Basefsky
New York, NY 10016 -------------------------------Director, IWS News Bureau
________________________________________________________________________
The following is the twelfth document in a new publication series produced by the ILR School.
ILR Impact Briefs
http://digitalcommons.ilr.cornell.edu/impactbrief
The ILR Impact Brief series highlights the research and project based work conducted by ILR faculty that is relevant to workplace issues and public policy.
BRIEF #12 / August 2006 / WWW.ILR.CORNELL.EDU
CEOs and Layoffs: Sometimes the CEO Suffers Similar Fate
by KEVIN F. HALLOCK
Professor of Human Resource Studies (ILR)
SHERRILYN M. BILLGER
Illinois State University
http://digitalcommons.ilr.cornell.edu/briefs/19/
Research question:
Are chief executive officers more likely to lose their jobs in the first year or two following the announcement of mass layoffs?
Conclusion:
The relationship between employee layoffs and CEO turnover has varied over the 1970-2000 time period examined in this study and depends, in part, on the particulars of the company and its chief executive. There is limited evidence that announced layoffs are positively associated with the probability that a CEO will resign. The chances of this happening are significantly greater when the price of a company�s stock drops in response to the planned reduction in force; with layoffs increasingly perceived as good news for companies, however, in recent years stock prices have reacted less negatively to these events.
Workplace implications:
The labor market for chief executives is not immune to the aftershocks of mass layoffs. Decisions about workforce reductions may be motivated by a CEO�s desire to retain his or her own job, but other constituencies� interpretation of the event matters more. Corporate boards and investors may regard layoffs either as a sign of management failure or as a furthering of strategic goals. Perceptions and subsequent actions by these stakeholders will determine whether the top executive is punished or rewarded.
AND MORE....
Source publication: �Mass Layoffs and CEO Turnover� appeared in Industrial Relations, Vol. 44, No. 3 (July 2005).
For related documentation, see --
http://digitalcommons.ilr.cornell.edu/hrpubs/15/
Suggested Citation
Hallock, K. F. & Billger, S. M. (2006). CEOs and layoffs: Sometimes the CEO suffers similar fate (ILR Impact Brief #12). Ithaca, NY: School of Industrial and Labor Relations, Cornell University.
http://digitalcommons.ilr.cornell.edu/briefs/19/
Required Publisher Statement
Copyright by Cornell University
[ILR Impact Briefs are written and/or edited by Maralyn Edid]
______________________________
This information is provided to subscribers, friends, faculty, students and alumni of the School of Industrial & Labor Relations (ILR). It is a service of the Institute for Workplace Studies (IWS) in New York City. Stuart Basefsky is responsible for the selection of the contents which is intended to keep researchers, companies, workers, and governments aware of the latest information related to ILR disciplines as it becomes available for the purposes of research, understanding and debate. The content does not reflect the opinions or positions of Cornell University, the School of Industrial & Labor Relations, or that of Mr. Basefsky and should not be construed as such. The service is unique in that it provides the original source documentation, via links, behind the news and research of the day. Use of the information provided is unrestricted. However, it is requested that users acknowledge that the information was found via the IWS Documented News Service.
Stuart Basefsky
Director, IWS News Bureau
Institute for Workplace Studies
Cornell/ILR School
16 E. 34th Street, 4th Floor
New York, NY 10016
Telephone: (607) 255-2703
Fax: (607) 255-9641
E-mail: smb6@cornell.edu
****************************************
# posted by SBasefsky : 6:30 AM
