The chief human resource officer in the C-suite: peer prevalence and environmental uncertainty

Abstract

The chief human resource officer (CHRO) role elevates people-related matters to the apex of the firm. Why do some companies’ leading management teams place so much emphasis on human resources while others do not? The present study argues that CHROs’ presence in the C-suite is driven by firms’ imitation of industry peers’ leadership structures as a response to uncertainty. The investigation also sheds light on the moderating role of environmental factors that can influence mimetic isomorphism in HR leadership. Through a longitudinal analysis of large listed firms between 2006 and 2020, the study shows a positive relationship between the prevalence of the CHRO position among firms’ peers and a focal firm having a CHRO in its top management. The results demonstrate that certain types of uncertainty serve as boundary conditions for such copying actions: Industry growth strengthens mimicking behavior while industry dynamism weakens it. There is no clear evidence for the moderating role of industry competition. The findings contribute a neo-institutional view of human resource structures in the top management and strengthen the bond between the strategy and human resource literature.

Keywords:

• Chief human resource officer
• CHRO
• upper echelons
• mimetic isomorphism

Acknowledgment

David Bendig would like to thank the State of North Rhine-Westphalia’s Ministry of Economic Affairs, Industry, Climate Action and Energy as well as the Exzellenz Start-up Center. NRW program at the REACH – EUREGIO Start-Up Center for their kind support of our work.

Data availability statement

Data subject to third-party restrictions.