The strategy choices CEOs make include whether to acquire, divest, diversify (geo, product), advertise, invest capital, take on risk, use leverage, innovate, and use strategic change. But upper echelon theory (UET) says CEOs have limited information processing ability, they must choose where to direct attention, what to focus on, how to assign meaning. UET argues CEO personality and experience determines firm success by impacting the CEO's strategic choices around the core strategies mentioned. Most research on this topic looks at narrow personality traits core self-evaluations, locus of control, charisma, need to achieve (an important one), and positive affect. The strongest personality correlate of a CEO's strategic choices is need for achievement, while strongest personality correlate of firm success is Charisma. CEO personality matters! Based on Wang et al. (2016).
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