Which theory explains why 20 percent of CEOs at the largest U.S. companies are replaced during a given year after stock prices fall or the company fails to meet its performance goals?

Question

Quizplus · Accepted Answer

Attribution theory explains how individuals pinpoint the causes of their own and others' behaviors and events. In the context of CEOs being replaced after a company's poor performance or stock price fall, this theory suggests that stakeholders (like the board of directors or shareholders) attribute the poor performance to the CEO's leadership. Consequently, they may decide to replace the CEO, believing that a change in leadership could improve company performance.

Which Theory Explains Why 20 Percent of CEOs at the Largest