Second fiddle strain: How extraversion shapes target CEO turnover following acquisitions

Abstract

After acquisitions, target CEOs are often pushed into a second fiddle role, experiencing a drop in relative standing that contributes to high turnover. These transitions hinge on post-acquisition hierarchies and expectations of deference, making traits linked to dominance consequential. We argue that second fiddle strain arises when trait-based dominance cues clash with these expectations, making the arrangement difficult for both target CEOs and acquiring executives to accept and sustain. Extraverted target CEOs are especially likely to generate such strain because their outgoing and dominant style conflicts with expected restraint. Because acquiring CEOs are central to enacting post-acquisition hierarchies, this strain is shaped by their extraversion. Highly extraverted acquiring CEOs more securely occupy the dominant position and grant greater behavioral latitude, easing constraints on extraverted target CEOs, whereas less extraverted acquiring CEOs rely more on formal authority, tightening these constraints, increasing target CEO turnover. Evidence from US acquisitions supports these arguments.