CEO Decision Style and Firm Performance – Model Questionnaire

Abstract

The CEO Decision Style and Firm Performance–Model, developed by Kruse, Bendig, and Brettel (2023), is a 23-item psychometric instrument designed to investigate the complex relationships between executive decision-making processes and subsequent organizational outcomes. The model focuses on two critical dimensions of heuristics employed by CEOs and the adherence to formal decision standards. It posits that the speed and innovativeness of New Product Development (NPD) serve as key mediators linking CEO style to ultimate firm performance.

The scale was constructed by adapting and refining items from established prior scales (e.g., Durinik et al., 2018; Misuraca et al., 2015; Sheng et al., 2013). A rigorous development process included translating the items from English to German via back-translation and receiving expert feedback from management consultants to ensure comprehensibility. The finalized measure was administered to German firms and evaluated using advanced statistical methods, including Structural Equation Modeling (SEM) and confirmatory factor analysis, confirming a robust factor structure and high reliability.

Keywords

Alternative Search, High Standards, New Product Development Speed, New Product Development Innovativeness, Firm Performance, CEO Decision Style, Creativity, Decision Making, Management Methods, Organizational Effectiveness, Product Design, Top Level Managers, Organizational and Occupational Measures.

Authors

Kruse, Sebastian; Bendig, David; Brettel, Malte

Purpose

The primary purpose of this measurement model is to provide a standardized tool for assessing the decision styles of Chief Executive Officers (CEOs). Specifically, it aims to quantify how these executive decision styles relate to crucial organizational intermediate variables—namely, the speed and innovativeness achieved during the New Product Development (NPD) process—and how these factors collectively influence overall firm performance.

This instrument serves researchers and practitioners interested in strategic management and leadership by offering empirical evidence on the mechanisms through which top-level managerial cognition translates into tangible market outcomes and competitive advantages.

Construct

The CEO Decision Style and Firm Performance–Model is a comprehensive multi-dimensional construct comprising five primary factors. These factors include elements related to executive cognitive processes, organizational innovation capabilities, and financial outcomes.

• CEO Decision Style: Measured through two dimensions, Alternative Search (reflecting the use of heuristics and exploration) and High Standards (reflecting the rigor and quality requirements applied during decision-making).
• Mediating Variables: New Product Development Speed and New Product Development Innovativeness, which capture the efficiency and novelty of the firm’s innovation pipeline.
• Outcome Variable: Performance, which measures overall firm success.

Validity

While specific external or predictive validity data were not provided in the source material, strong evidence of internal construct validity was established through rigorous statistical testing. The study confirmed that all variables met the criterion set forth by Fornell and Larcker (1981), which is a key indicator of good convergent validity, suggesting that the items within each construct are strongly related and measure the intended latent variable.

Furthermore, the confirmatory factor analysis demonstrated that the proposed five-factor model provided a superior fit to the empirical data compared to alternative model specifications, reinforcing the structural validity of the instrument.

Reliability

The internal consistency and reliability of the scale’s constructs were assessed using Composite Reliability (CR). The resulting CR values demonstrated strong internal consistency, ranging from 0.72 to 0.90 across the various latent variables. This range is well above the commonly accepted threshold for reliable measures in organizational psychology and management research, confirming the stability and consistency of the scale when applied to CEO populations.

Factor Analysis

A Confirmatory Factor Analysis (CFA) was executed to test the structural integrity of the proposed five-factor model. The results indicated a good model fit for complex structures derived from large samples (Hair et al., 2010). Key fit indices were reported as: χ²[220] = 1171.809 (p < 0.001), CFI: 0.92, RMSEA: 0.06, and SRMR: 0.05. These values confirm that the measurement model adequately represents the relationships between the observed items and the underlying theoretical constructs.

To mitigate potential methodological bias, the study employed the comprehensive CFA marker technique (Williams et al., 2010) to assess Common Method Variance (CMV). The comparison between the baseline model and the model incorporating the marker variable showed no statistical difference (Δχ² = 0.05, df = 1, p = 0.83), providing confidence that CMV does not significantly distort the observed relationships within the dataset.

Instrument

Test Type: Inventory/Questionnaire

Format: The measure consists of 23 items. All items utilize a seven-point Likert scale for response format, ranging from strong disagreement to strong agreement.

Language Available: German

Population Group: Human; Male; Female

Age Group: No data is Available

Population Details: The sample consisted of Business Firm CEOs located in Germany, making the instrument particularly suitable for research on German executive leadership and corporate performance.

Test Methodology: The evaluation of the instrument relied on several sophisticated statistical techniques, including Test Reliability assessment, Internal Consistency checks, Factor Analysis, Confirmatory Factor Analysis, Measurement Model validation, and Structural Equation Modeling.

Keywords

Alternative Search, High Standards, New Product Development Speed, New Product Development Innovativeness, Firm Performance, CEO Decision Style, Organizational and Occupational Measures.

Authors

Kruse, Sebastian

• Author ORCID Identifier: No data is Available
• Affiliation: RWTH Aachen University, Innovation and Entrepreneurship Group (WIN) – TIME Research Area
• Affiliation Email addresses: [email protected]
• Correspondence Address: RWTH Aachen University, Innovation and Entrepreneurship Group (WIN) – TIME Research Area, Kackertstr. 7, Aachen, Germany, 52072, [email protected]

Bendig, David

• Author ORCID Identifier: No data is Available
• Affiliation: University of Münster, Institute for Entrepreneurship

Brettel, Malte

• Author ORCID Identifier: No data is Available
• Affiliation: RWTH Aachen University

Permissions & Fee and Test Year

The instrument was developed and published in 2023. Permissions for use must be obtained by contacting the Corresponding Author (Sebastian Kruse). The test is noted as Non-Commercial and is available with No Fee.

• Permissions: Contact Corresponding Author
• Commercial: No
• Fee: No
• Test Year: 2023

Reference’s

Kruse, S., Bendig, D., & Brettel, M. (2023). How does CEO decision style influence firm performance? The mediating role of speed and innovativeness in new product development. Journal of Management Studies, 60(5), 1205–1235. https://doi.org/10.1111/joms.12913

Items of the CEO Decision Style and Firm Performance–Model Questionnaire

IMPORTANT: The following scale items must be preserved in their original language and must not be changed in any way.

Factors and Subscales: The instrument includes the following factors: Alternative search, High standards, New product development speed, New product development innovativeness, and Performance.

Number of Items: This measure includes 23 items.

Test Items Available: No data is Available.