On the Advisability of Using CEOs as the Sole Informant in Strategy Research

A fundamental conflict in all organizational research is the balancing of rigor, relevance and "doability. " As an example, paper and pencil experiments using student subjects often have high internal validity and are relatively easy to do. As such, there have been several studies of this type in areas like strategic decision making (e.g., Schweiger et al., 1986). However, the relevance or generalize ability of student-based studies has been the subject of debate (cf. Gordon et al., 1986). Another approach with potential to address all the three issues is the mailed survey. Here again two of the three issues are easily addressed. Decades of methods research have provided survey researchers with data on the most rigorous ways to conduct surveys (e.g., Fowler, 1988). Help ranging from item construction to the best day of the week for survey arrival is available. This type of research is also easy to do. To increase the relevance of organizational survey research projects, the forms are often aimed at the organization's Chief Executive Officer (CEO), especially when researchers want information about the firm's strategic choices and behavior. Zajac and Shortell used CEOs as their informants because the CEO "was the respondent most knowledgeable about the organization's strategic position" (1989:420). These are not idle speculations on Zajac and Shortell's part but rather are based in part on Hambrick's (1981) evidence concerning the validity of CEO based studies. In that research, Hambrick demonstrated that CEOs' perceptions of their firms' overall strategies were closer to a set of "objective" measures of the same phenomena than were any other managers'. An implication of this line of inquiry is that strategy researchers can increase the rigor, relevance and "doability" of their studies by doing CEO centered surveys. The present study examines that implication and argues that one cannot assume CEOs (as sole informants) are always unbiased sources for data about strategy research questions. The results from this present research demonstrate that CEOs respond to certain types of research questions in systematically different ways compared to other managers. However, these data also show that in some classes of questions, there are no differences. The implication of these results is that researchers must match the use of CEOs as single informants with appropriate research questions. One might question why this present study was necessary since Hambrick (1981) established that CEOs' perceptions of strategies were significantly closer to a set of external "objective" measures of gross strategy than second- and third-level managers. Since much of the external manifestations of strategy comes explicitly from the CEO, it is not surprising that their perceptions and the "objective" reality would be closely matched. However, a major part of what strategy investigators currently research concerns how strategic decisions are made and how strategy is created (e.g., Eisenhardt and Bourgeois, 1988; Fredrickson and Iaquinto, 1989), or how top management teams work and their effect on the organization (e.g., Ancona and Nadler, 1989; Bantel and Jackson, 1989; Hambrick and Mason, 1984). The Hambrick (1981) results do not shed any light on whether CEOs' perceptions of these more specific processes might differ from those of other managers. Because of the extensive use of CEOs as single informants in strategic decision making and process research (e.g., Ghoshal and Nohria, 1989; Reid, 1989; Thomas and McDaniel, 1990; Zajac and Shortell, 1989), this article suggests that the validity of this type of research should be examined. This study utilizes the following definitions. First, it is necessary to define the article's use of the term "CEO" and the term "other senior manager. " Since the participating managers were from both business units of larger firms and free-standing organizations, anyone with the title "Chief Executive Officer" or "President" was included in the CEO group. …