Project PROGRAMME Bachelor of Business Administration Honours MODULE Quantitative Methods & Business Research Methodology YEAR 1 INTAKE January 2023 Marks 100 FORMATIVE ASSESSMENT 2 100 MARKS Study the article below and answer the following questions. New Thinking Emerges on Optimal Tenure for a CEO Some public-company chiefs get only a few years on the job, but research suggests the golden years of performance come after more than a decade Warren Buffett, 89, has guided the conglomerate Berkshire Hathaway since 1970. PHOTO: SCOTT MORGAN/REUTERS By Chip Cutter February 3, 2020 If Leslie Wexner, the 82-year-old billionaire behind Victorias Secret, steps aside as the companys leader, as he has been in talks to do, it wont only be a big moment for the retailer. It will also end the tenure of the longest-serving CEO in the S&P 500. Replacing him would be Warren Buffett, whose time on the job is just behind, at a half-century. Mr. Wexner has served as CEO of L Brands Inc., the retail giant he founded, for 57 years. He is now in talks to hand over the job after a difficult period for the business, The Wall Street Journal reported last week. Mr. Buffett, 89, has guided the conglomerate Berkshire Hathaway Inc. since 1970. Their longevity in the roles makes them rarities among corporate leaders. Few executives manage to stay in power for decades, although the tenure of S&P 500 chief executive officers has gradually risen since the financial crisis, and the founders of some of the hottest tech companies have established voting control that could help them remain at the helm indefinitely. SIGN UP Some corporate boards are increasingly seeing merit in longer CEO tenures, said James Citrin, head of the North American CEO practice for Spencer Stuart, a leadership advisory and executive recruiting firm. The mind-set about CEO tenure is at the beginning of a potential change, he said. Over the past decade, the tenure of S&P 500 CEOs has risen, said Matteo Tonello, managing director of the Conference Board, a research group. The average S&P 500 CEO tenure as of 2018 was 10.2 years on the job, up from an average tenure of 7.2 years in 2009. CEO tenure statistics can vary from year to year and across analytical methods. In a stable economy with a booming stock market, many corporate boards are reluctant to make executive changes if a company is delivering solid results, Mr. Tonello said. New research from Spencer Stuart suggests that when top executives stay for more than a decade, they often deliver some of their best years of performance. The executive-search firm analysed the annual financial results of about 750 S&P 500 CEOs during their tenures and interviewed dozens of leaders in a report published in Harvard Business Review late last year (Citrin, Hildebrand and Stark, 2019). It showed that CEOs had some of their best value-creating periods in years 11 to 15 on the job. In these golden years of CEO tenure, as the report describes them, executives benefit from strong institutional knowledge and the experience of guiding a company through multiple crises. In many cases, longer is in fact better, said Mr. Citrin, a lead author of the report, who has presented its findings to many corporate board members. The Current study by Citrin et al (2019) sheds new light on Hambrick and Fukutomis (1991) leader life cycle theory as well as Wulf, Miksche, Roleder and Stubners (2012) work which addressed the question of how structural power creation activities of a CEO influence company performance over the course of his tenure in office. Leader life cycle theory predicts an inverted curvilinear relationship between a CEOs tenure in office and company performance. How long a corporate chief lasts in the corner office can depend on multiple factors, including the CEOs financial stake in a company. Founders may be able to lead a company for extended periods due to large ownership positions or special voting powers that cement their position. Such powers are common among some of todays best-known technology companies. Facebook Inc., Snap Inc. and Lyft Inc. all have super-voting structures. . Even so, efforts to maintain control dont always pan out. Uber Technologies Inc. replaced co-founder and CEO Travis Kalanick in 2017 after scandals involving its work culture. Adam Neumann stepped down last year as CEO of We Co. amid ballooning losses and questions about conflicts and his management style. Both founders had established a super-voting structure at their companies, although Uber later undid it. Often, results matter above all else, corporate-governance experts said. If you dont have outstanding performance, you dont survive, period, said Bill George, who was CEO of medical-device company Medtronic PLC for 10 years and is currently a senior fellow at Harvard Business School. No one is irreplaceable. Mr. George said he considers a decade to be the magic period for a CEO: long enough to make transformative change at a company without risking complacency. After such a period, he said a company benefits from a leader who can bring a new perspective. High-tech, fast-moving companies in this day and age need a new CEO every 10 years, he said, adding that many founders overstay their usefulness. Still, Mr. George said that some executives manage to deliver strong results for much longer. In the S&P 500, about 15 CEOs have held their jobs for more than 25 years, including the chiefs of chip maker Nvidia Corp., game publisher Activision Blizzard Inc. and Royal Caribbean Cruises Ltd. The greater longevity of many of todays large-company CEOs may actually mean more turnover in the years ahead, as long-serving CEOs step down and boards hand the job to lieutenants or outsiders. We could see change at a rate that is higher than what weve been seeing in the past, the Conference Boards Mr. Tonello said. Whether a younger generation of companies can spawn a new breed of long-term CEOs also remains to be seen. If Mark Zuckerberg, who founded Facebook in 2004, has a reign as long as Mr. Wexners, he would still be running the social network at age 76 in 2061. Source: https://www.wsj.com/articles/new-thinking-emerges-on-optimal-tenure-for-a-ceo-11580725800 REQUIREMENTS FOR THE PROPOSED STUDY: As a business researcher with a research interest in leader life cycle theory in the context of business leadership across Africa, you are proposing a study with the aim of examining the impact of Chief Executive Officer (CEO) tenure on the performance of JSE-listed companies. The proposed study will seek to achieve the following research objectives using a quantitative approach: To determine whether CEO tenure of JSE-listed companies differs across economic sectors To determine the relationship between CEO tenure and the financial performance of JSE-listed companies To make practical recommendations to the management of JSE-listed companies on how best to leverage CEO tenure for improved organisational financial performance.

Please outline how you would go about conducting the investigation with reference to the following: QUESTION 1 (25 Marks) 1.1 Based on the aim specified for the study, formulate an appropriate title for the study. (2 Marks) 1.2 Formulate THREE (3) research questions that the proposed study will attempt to answer. (3 Marks) 1.3 Select and discuss an appropriate research design for the proposed study. 1.4 Critically discuss the methodology of the proposed study with respect to the following: (4 Marks) 1.4.1 Specify the target population for the proposed study and discuss whether your sample (3 will be probability or non-probability. Marks) 1.4.2 Specify a method of sampling for the study and justify the appropriateness of this (4 particular method for the study. Marks) 1.4.3 Specify a suitable data collection method for the study and rationalise the selection of (4 this particular data collection method. Marks) 1.4.4 Briefly discuss the methods of data analysis that you would use in your study (Please note: you are required to specify and explain, where necessary, the methods of analysis (5 you would employ for each of your Marks) research questions in 1.2).