EXPRESS: Strategic Recipes in Cyclical Industries: Integrating Imprinting and Learning Perspectives

We explore the mechanisms underlying a CEO’s development of strategic recipes. We focus on a particular strategic recipe in a cyclical industry, called counter-cyclical strategy, where CEOs undertake proactive investments during an industry downcycle in preparation for subsequent upcycles to strengthen their firm’s competitive position. We reconcile prior managerial career imprinting perspectives with managerial experiences and learning in a fast-changing, cyclical industry. By investigating CEO career imprinting and counter-cyclical investment strategy in the U.S. semiconductor industry, we theorize that CEOs who began their careers in downcycle periods are more likely to implement counter-cyclical strategies when they encounter subsequent industry downcycles in their career. This imprinting effect is reinforced through the CEO’s accumulation of contrarian experiences, i.e., positive performance outcomes following prior counter-cyclical strategies. Our empirical study of the entire career histories of 305 unique CEOs since 1977 and their counter-cyclical investment records between 2001 and 2020 supports our hypotheses.