Page 134 - 34-2

CEO Extraversion, Management Team Characteristics, and Firm Operating Performance

CEO Extraversion, Management Team Characteristics, and Firm
Operating Performance

Tsung-Kang Chen, Department of Management Science, National Yang Ming Chiao Tung University
/ Center for Research in Econometric Theory and Applications, National Taiwan University
Po-Chun Huang, Department of Management Science, National Yang Ming Chiao Tung University
Yijie Tseng, Department of Accounting, Fu Jen Catholic University

1. Purpose/Objective

The purpose of this study is to examine whether and how CEO extraversion
influences firm operating performance. Extraversion is defined as a broad personality trait

which can be characterized by a number of more specific characteristics such as cheerfulness,
sociability, and fondness of socializing, with extraverted individuals possessing strong
ambition, a tendency to dominate others, and an inclination to pursue excitement in life.
Unlike previous studies concentrate on accounting or financial metrics as factors

affecting firm operating performance, this study focuses on CEOs’ roles as firm leaders
and their potential impact on firm operating performance. While earlier research has
largely examined explicit attributes of CEOs like gender, age, tenure, and educational and
professional background limited attention has been given to CEOs’ intrinsic personality

traits. This is partly due to the challenge of obtaining valid and reliable data on such
personality traits. Hambrick (2007) indicates that, generally, CEOs are unwilling to
participate in academic personality trait research, thus making it challenging and costly
to obtain relevant data. Given the critique that CEO research may not be able to precisely

capture the intrinsic personality traits of CEOs (Colbert, Barrick, and Bradley, 2014;
Hambrick, 2007), scholars begin to develop validated personality trait models. For
instance, Costa and McCrae (2000) propose the five-factor personality model (FFM),
which categorizes individuals based on five personality traits: conscientiousness,

neuroticism, extraversion, agreeableness, and openness to experience. Using this
framework, numerous studies have revealed that CEO personality traits influence their
behaviors and decisions. Specifically, a CEO’s personality traits may impact a company’s
capital allocation, performance, and strategic changes (Herrmann and Nadkarni, 2014;

126