Strategic recipes in cyclical industries: Integrating imprinting and learning perspectives

Abstract

Where does a CEO’s management style come from? We explore a CEO’s development of a strategic recipe called counter-cyclical strategy, where CEOs undertake proactive investments during industry downcycles in preparation for subsequent upcycles to strengthen their firms’ competitive positions. We theorize that CEOs who began their careers during downcycles are more likely to implement counter-cyclical strategies when they encounter subsequent industry downcycles. This imprinting effect is reinforced through the CEO’s accumulation of contrarian experiences, i.e., positive performance outcomes of the CEO’s counter-cyclical strategies. Empirical evidence from the entire career histories of 305 unique CEOs since 1977 and their counter-cyclical investment records in the US semiconductor industry between 2001 and 2020 supports the hypotheses. This study reconciles managerial career imprinting perspectives with managerial experiences and learning in a fast-changing, cyclical industry.

Keywords

strategic recipe counter-cyclical strategies career imprinting experiential learning contrarian experiences cyclical industries

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