Section Fiveaddition, these findings emphasize that while firms tend to
select CEOs from outside when firm performance has declined,
the performance of outsiders is better than that of insiders only
when the firms are nondiversified. The researchers have
speculated that with greater diversification, there may be some
dilution of the CEO’s impact, while with less diversification, the
CEO can achieve results more quickly as a result of more
focus.^82
Structured Interviews
Terpstra and Rozell also examined the performance impact of
structured interviews. Their multiple regression analyses found
that structured interviews were associated with profit and profit
growth in service industries. In contrast to the regression
results, correlations of structured interviews with profit and
profit growth across all industries were quite small.^83 The small
bivariate correlations indicate the importance of the context in
which the practices are implemented and thus provide some
evidence for the contribution of the contingency perspective.
Validation Studies
Terpstra and Rozell’s analyses found that validation studies
were associated with profit, profit growth, and overall firm
performance in service industries. As with cognitive tests, the