Summary of Phd thesis Business administration: A study of the impacts of ceo’s characteristics on the performance of a number of outstanding listed enterprises

The thesis aims to study the impacts of CEO’s characteristics on the performance on some outstanding listed enterprises, in which the thesis focuses on a number of typical family-owned enterprises today.

SUMMARY OF PHD THESIS

A STUDY OF THE IMPACTS OF CEO’S 

CHARACTERISTICS ON THE PERFORMANCE OF A NUMBER OF OUTSTANDING LISTED ENTERPRISES

Major: Business Administration Code number: 9340101

Hanoi – 2019 The   thesis   is   completed   at:   Foreign   Trade   University   –   No.91, Chua Lang Street, Dong Da, Hanoi

Reviewer 1: 

   Reviewer 2: 

Reviewer 3: 

The research shall be presented in front of the council meeting  at

1. Research background

From the perspective of modern management, the CEO acts 

as a spearhead for development, playing the make­or­break role in every business. In addition, CEOs tend to be outstanding individuals whose talents attest their competence at making important decisions that greatly affect the performance and operation of organizations, businesses run by them

Studies   of   human   psychology   have   shown   that   different characteristics of demographics, behavioral psychology, experience, seniority of work, personalities, and genders   might exert a strong influence to each individual’s behavior. This fact is well­applied to CEOs as well, as leadership studies have shown that the style, habits, 

or behaviors of a particular leader are the outward reflection of a variety   of   this   CEO’s   typical   characteristics   and   that   has   direct impacts on the performance of organizations and businesses they run. Therefore, the influence of a leader’s characteristics of on different aspects of business operation has been one among many contents that attract scholars and researchers in the field of business administration worldwide

Family­owned enterprise (FOE) is a business model derived from   the   family   form   and   is   the   basic   model   in   economic organization models in many countries in the world, especially in Vietnam, where the family culture dominates most relationships in society. Moreover, from the perspective of governance, FOEs always have   advantages   in   terms   of   organization,   strategy   or   decision making compared to other private or state­owned enterprises due to the characteristics of family ownership, monitoring and operational mechanism   (Dieleman   et   al.,   2013)   Therefore,   this   is   really   a business model with many typical elements for analysis and findings

Although CEO plays an important role in the performance of 

businesses,   current   discussions   and   studies   on   CEO   are   mostly general, introductory. The theoretical basis lacks in­depth research on the CEO and the role of the CEO in specific types of businesses. Moreover, in our country, current studies on CEOs still heavily relies 

on theories available in the world, leading to inevitable inadequacies and   differences   when   applied   in   particular   situations   in   Vietnam. That is the main reason explaining the fact that information on CEOs 

Secondly, studies show the omnidirectional influence of the CEO's   characteristics   on   an   enterprise’s   performance,   and   their heterogeneous impact, which is likely to change at times. 

Thirdly,   the   science   of   management   in   approaching   to anthropological   and   psychological   characteristics   is   an   attractive research topic with many theoretical and application which can be exploited in in corporate governance activities

Fourthly, in Vietnam, current studies on CEO is limited to a few general studies, and there are almost no studies on the influence 

of   CEO's   personal   characteristics   on   the   performance   of   an enterprise

on the personal characteristics of CEOs in a typical group / business model, such as FOEs

3. Research question

(1) Do the CEO's characteristics influence the performance 

of listed family­owned enterprises?

(2) How is the influence of CEO's characteristics on the of performance of listed family­owned enterprises?

4. Research objectives

The thesis aims to study the impacts of CEO’s characteristics 

on the performance on some outstanding listed enterprises, in which the thesis focuses on a number of typical family­owned enterprises today

5. Research object and scope

5.1. Research object

The   object   of   the   research   is  the   impacts   of   CEO’s characteristics   on   the   performance   on   some   outstanding   listed enterprises. 

5.2. Research scope

­  Scope  of  content:  The  study  focuses  on  identifying  the 

impacts   of   CEO’s   characteristics   on   the   performance   on   some outstanding   listed   enterprises,   in   which  CEO’s   characteristics   are classified into two major groups: (1)  the intrinsic characteristics of the   CEO   ­   demographic   characteristics,   (2)   CEO   personal characteristics related to seniority and management structure of the enterprise   ­   working   characteristics.  The   thesis   shall   focus   on studying   the   influence   of   CEO's   personal   characteristics   on   the performance of listed family­owned enterprises

­ Scope of space: the study carries out research on personal 

characteristics   of   CEOs   who   are   currently   at   the   helm   of   listed enterprises

­ Scope of time:  the thesis chooses the study period from 

2012­2018. It is because in the period before 2012, information on corporate   governance   reports   (CG)   has   not   been   given   adequate attention by the Vietnam's stock market. On the other hand, from 

2012 to the present, the macro economy has only experienced steady growth   and   development,   the   stock   market   has   had   positive developments. For these reasons, the scope of time the thesis is the period   of   2012­2018   to   ensure   adequate   information   from   the financial statements, annual reports and governance reports

6. Research structure

The   structure   of   the   research   is   divided   into   five   chapters including chapter 1: Introduction; Chapter 2: Theoretical background for the   impacts   of   CEO’s   characteristics   on   the   performance   of   listed family­owned enterprises; Chapter 3: Research methodology; Chapter 4: Analysis on the impacts of CEO’s characteristics on the performance of listed family­owned enterprises; Chapter 5: Discussions and findings and recommendations

CHAPTER 1: LITERATURE REVIEW

1.1. Theoretical background on CEO’s characteristicsStudies   on   the   CEO's   personal   characteristics   have   been conducted in­depth to explore the role and influence of these personal characteristics on executive style and habits

In  general,   all   research  directions  indicate  that   the  CEO's personal   characteristics   have   a   strong   influence   on   the   style   and working   habits,   and   leadership,   thereby   affecting   many   different aspects   of   business   operation   At   present,   there   still   exist   many perspectives   of   different   views   and   approaches   on   CEO's characteristics, however, from the author's perspective, it is possible 

to refer to the research results of Hambrick and Mason (1984) who form the basis of the approach to the personal characteristics of the 

of   personal   characteristics   factors   such   as   age,   education   level, seniority, typical characteristics. These groups of behavioral patterns influence   the   decisions   of   the   CEO   in   the   process   of   running   a business,   thereby   affecting   the   operation   outcomes   and   the performance of an enterprise

In   summary,   the   CEO's   personal   characteristics   can   be divided into two main groups: (i) Demographic characteristics, (ii) Working characteristics

1.2   Theoretical   background   on   the   performance   of enterprises

Business performance has long been a topic of interest to researchers because this is a measure to evaluate the effectiveness of measures and tools that enterprises have been making use of during its production and business activities. According to Hult et al. (2008), although there are many different approaches and measures of firm performance   today,   there   are   three   commonly   used   performance measurement   criteria   namely   financial   performance,   operation performance, or overall performance

While   there   are   many   different   approaches   and measurements of the above concept, one of the most widely studied and considered aspects is the financial aspect, which is the result of achieving the economic goals. Normally, to assess the performance 

of businesses according to financial aspects (financial performance) one of two ways of measurements shall be used: (i) Profit Indicator such as the ratio of profit over the total assets (ROA), the ratio of profit   over   the   revenue   (ROS),   the   return   on   equity   (ROE);   (ii) Market indicators such as Tobin’s Q and market return ratio

The above­stated studies reinforce the suitability of selecting ROA   and   ROE   as   a   reference   to   evaluate   the   performance   of 

1.3. Theoretical background on family­owned enterprisesFamily­owned enterprises is a form of primitive economic organization   that   contributes   greatly  to   the  development   of   every economy. Moreover, this is also a type of business with many distinct characteristics. Therefore, researches on FOEs has been started since the middle of the 20th century. Basically, researches on FOEs have been conducted mainly on dissecting the nature of this type through finding a sufficiently thorough and convincing definition. Some of the studies on this topic by authors such as Litz (1995), Wortman (1995), Shanker and Astranchan (1996), Wall (1998)   Though these authors   have  different   approaches   to   the   nature   of   this   type   of business,   all   focus   on   the   basic   factors   that   make   up   the   basic characteristics  of such type of business such as: family ownership, family control, number family members in executive committee…

In Vietnam, fully aware of the contribution that FOEs have made  to the overall development of the economy in recent years, many scholars have recently conducted research to learn about the type this business

The research system in and outside Vietnam has reaffirmed the typical character of this type of business, as well as the suitability when the thesis selects FOEs as a typical enterprise type for study. 

1.4   Theoretical  background  on   the   impacts  of   CEO's characteristic on the performance of enterprises

In the world, this research direction appeared early and there 

is evidence to conclude that CEO characteristics have an impact on the business operation

The results of the afore­mentioned studies around the world, 

in Asia and in Vietnam, once again reaffirm that CEOs have the ability to strongly  impact  the value  of  their  enterprise  There  are some common points when discussing the personal characteristics of 

the   CEO   and   the   impact   of   the   above   characteristics   on   the performance of an enterprise:

­   Presenting   the   concept   of   executive   director's   personal characteristics;

­ Pointing out the influential personal characteristics groups 

of CEOs such as age, gender, ownership, remuneration of the CEO   that affect the working style and performance of the enterprise run by them;

­   Systematizing   and   classifying   groups   of   individual characteristics according to the degree of influence / impact on the business performance

CHAPTER 2: THEORIES OF THE IMPACTS OF CEO’S CHARACTERISTICS ON THE PERFORMANCE OF LISTED 

FAMILY­RUN ENTERPRISES2.1. Overview on Chief Executive Officer (CEO)

2.1.1. Concepts of CEO

Following the approach from the basic management model, the CEO (Chief Executive Officer) ­ is the highest executive position of 

an organization, in charge of overall operation of a corporation, an enterprise,   the   organization   or   an   agency,   making   the   strategic decisions of the organization, and being responsible to the board of the   organization   The   equivalent   term   of   the   CEO   can   be   the managing director (MD ­ Managing Director ­ MacKenzie 2006) and the executive director (CE ­ Chief Executive)

Currently,   in   the   world,   there   exist   a   number   of   different approaches   to   CEO   These   approaches   are   generally   dominated, influenced by business culture, corporate governance model 

The first approach: From the viewpoint of dual leadership, in some companies the CEO is also the chairman of the board

A   second   approach:   Popular   in   several   countries   in   the European   Union,   two   separate   boards   of   leadership   exist   in   the 

2.1.2   The   role   of   the   CEO   in   the   performance  of  a business

Depending on the organizational structure of each business, CEO will be responsible for the different roles in the operations of the organization. Basically, the role of the CEO is as a surviving factor of a business due to their executive positions

The CEO must run the company's daily business in accordance with the law, the company's charter, the labor contract signed with the   company   and   the   resolution   of   the   Board   of   Directors   If operating in contravention of this regulation causes damage to the company, the Director or General Director must take responsibility before law and must pay damages to the company

Whether   by   the   first   approach   (concurrently   responsible responsibilities   and   rights,   CEO   and   chairman   of   the   Board   of Directors) or the second approach (CEO independent of the Board of Directors),  the CEO's role  is  generally  related to every aspect   of every organization's operation

2.1.3. Requirements to CEO

Requirements for the CEO in the process of running a business 

is  most   evident   through  the   requirement   of   the  CEO's   leadership which   is   an   important   issue   in   businesses   today.  In   terms   of leadership qualities, the typical studies are by Stodgdill (1948, 1974), Mann (1959), Lord et al. (1986) and Kirkpartrick (1991). Regarding the competence and skills of leaders, typical studies include those of Mumford et al. (2000) and Yammarino (2000)

CEO's leadership is a combination of knowledge, skills and qualities   that   a   CEO   needs   in   his   leadership,   subordinate   team, organizational   leadership   to   achieve   the   goals   of   the   business. 

Leadership   knowledge:   Leadership   knowledge   is 

theknowledge and understanding that a person acquires, accumulates through   experience   or   learn   and   is   capable   of   applying   to   his leadership

Leadership  skills:   This  is  the  ability   to   perform   tasks,   turn 

knowledge into actions. Leadership skills show the proficiency of each   person   when   applying   leadership   knowledge   in   practical management to achieve the set goals

2.2. Overview on the personal characteristics of the CEO2.2.1   Concepts  of   personal   characteristics,   personal characteristics of CEOs

According to Holland (1960), “individual characteristics of a person   are   a   collection   of   personality   traits   and   individual psychological styles that dictate the manner in which individuals act and how they respond to their surroundings. 

From the perspective of behavioral psychology, psychologist Leochiev   (1962)   points   out   that:   "The   development   of   human psychology   and   personality   is   closely   connected   with   the development of human activities in practice, in which some activities play a major (leading) role, others play a minor (auxiliary) role.Psychological studies have shown that not only the individual characteristics   of   people   but   only  the  characteristics   that   regulate people as a member of society speak up the psycho­social aspect, values and personality of each individual. These attributes that make 

up   the   distinctive   characteristics   of   each   individual   are   often expressed   on   three   levels:   the   level   of   internal   individuals (personality, thinking habits  ); interpersonal level (communication, behavior, ability to influence  ) and the level of expression of its activities and products (work results)

2.2.2   Some   basic   attributes   of   CEO   personal 

According   to   Pham   Minh   Hac   (1999),   the   individual characteristics of each person are governed by four basic attributes: stability, unity, activeness and interpersonal characteristics. At the same time, the CEO's personal characteristics also carry all the basic attributes of the personal trait

This system  of  characteristics  influences  and  influences  the handling   habits   and   styles,   resolves   situations   arising   at   work, thereby affecting work efficiency and problem solving

2.2.3. Approaches to the CEO's personal characteristicsAlthough   there   are   many   different   approaches,   it   can   be basically divided into two main groups:

­   Group   1   is   demographic   characteristics   such   as   age, nationality,   gender,   hometown,   living   culture,   etc   These characteristics are basic, have direct and fundamental influence on CEO behavior and affect cognitive ability, thinking, work capacity 

­ Group 2 is the work characteristics such as industry, business area, seniority, management experience, share ownership rate, part­time rights…. These characteristics are often greatly influenced by objective   factors,   external   environment,   allowing   explanation   to explain the unique characteristics of the CEO in each industry or sector in which they participate

2.3. Listed family­owned enterprises and the role of listed family­owned enterprises in economic development

2.3.1. Overview on family­owned enterprises

Family­owned   enterprise   is   one   of   the   earliest   economic organizations   of   human   society,   and   has   made   many   positive contributions to the development of economies around the world. From   the   governance   perspective,   there   are   many   advantages   of Family­owned   company   in   terms   of   organizational,   strategic   or decision­making   features   over   other   private   or   state­owned 

enterprises   The   strength   of   the   family­owned   company   is   the cooperation   between   the   key   members   However,   when   family ownership of the family­owned enterprise is passed down through the generations, the heirs must share the ownership of the company in a partnership. They must together decide how to manage and run the family­owned   enterprise   as   a   common   property,   and   that's   when corporate governance issues arise. The vast majority of family­owned enterprise   have   difficulty   in   dealing   with   this   management   issue. (Ward, 1988).

With many outstanding and unique advantages, the question of whether or not an enterprise is a family­owned enterprise is still a top concern of researchers (Peter, 2005). At present, there are still many different   definitions   of   family­owned   enterprise   depending   on different   conditions   such   as   culture,   legal   environment,   religion, production and business activities. Different ways of defining with different criteria will influence the behavior and performance of the business

2.3.2. Overview concept of family­owned enterprise

Based on the review of the definition of FOEs in countries around   the   world   and   the   summary   of   researchers'   approaches, derived from the practical necessity of establishing an appropriate definition of family­owned enterprise based on practical conditions in Vietnam

Summarizing the research results, in order to give a complete definition of Foes according to the subjective view of the thesis, it is necessary to clarify FOEs in two aspects:

Quantitative:  The number  of  family members  founding  and participating in corporate governance activities and the percentage of ownership control of family members. In terms of the number of family   members,   most   definitions   determine   that   more   than   one family member is involved in the business, on the company's board