When companies plan to restructure, it makes a difference if the new CEO is hired from inside or outside. Pexels

Star Co. is a hot mess. The business is bloated and sprawling. Its stock is tanking. Profits are down. It's clearly time for a new CEO.

But where to look — inside the company or outside? It's a decision every restructuring company faces.

Cenovus Energy tapped an outsider in 2017. General Electric, the same year, went with a longtime insider. Though it's too soon to know yet for sure, which one likely made the right choice?

Rice Business emeritus professor Robert E. Hoskisson, with coauthors Shih-chi Chiu, then at Nanyang Technological University (now at the University of Houston), Richard A. Johnson of University of Missouri, Columbia and Seemantini Pathak of University of Missouri-St. Louis, set out for an answer: Where is the best place for a restructuring company to get its next CEO?

According to conventional wisdom and some past research, change is more likely under an outside CEO. He or she can start fresh, armed with a greater mandate to shake things up.

Recent evidence, though, suggests that outsiders may actually have more trouble succeeding. That's because they lack the institutional knowledge to make the most informed choices, and the existing relationships needed to ease change with minimal pain. Insiders, this research shows, have the advantage of key "firm-specific" knowledge on everything from customers to suppliers to workforce composition.

To pin down an answer on whether it's better to stay inside or go outside, Hoskisson's team decided to look at corporate divestiture — asset sales, spinoffs, equity carve-outs — as a proxy for overall strategic change. (It's already well documented that a new CEO makes organizational changes such as personnel changes and culture shifts.)

Next, they distinguished between scale and scope. The scale of a divestiture reflects magnitude: How many units were sold? The scope reflects diversification portfolio adjustment: Does the company have fewer business lines?

Focusing on 234 divestitures at U.S. firms that voluntarily restructured between 1986 and 2009, the authors defined a new inside CEO as having been in that role two or fewer years, and with the company previously for more than two years. They defined a new outside CEO as someone who had been at the company for a maximum of two years in any role.

Heading into the analysis, the researchers expected they would reach different conclusions for scale vs. scope. And the results were just that.

New inside CEOs, they found, did carry out more divesture activities than new outside CEOs. Not having as much inside knowledge, the outside CEO was more likely to prefer a simpler divesture plan, one that didn't require evaluating each unit or asset. Instead, the professors hypothesized, an outsider was more likely to follow investors' general preferences about firm strategy.

"When a higher magnitude of corporate divestures is required, internal successors are more astute than external successors in accomplishing this objective," the researchers write. On the other hand, when a company wants to shrink the diversified scope of a business portfolio, "external successors are more likely to bring their firms to a more focused position."

The researchers also suggested future lines of study about new CEOs and strategic change. What happens when firms want to buy and sell at the same time? Does the CEO selection process itself affect restructuring scale and scope? And does an inside chief executive who won a power struggle against a predecessor perform differently than an inside CEO named in orderly succession planning?

In the meantime, the findings are clear. If your corporate board is hunting for a new CEO, it may pay to go for the fresh face. But depending on your goals, your best option may also be a top executive sitting at a desk a few steps away.

------

This story originally ran on Rice Business Wisdom.

Robert E. Hoskisson is the George R. Brown Emeritus Professor of Management at Jones Graduate School of Business at Rice University.

Does your brain have the right components to be an entrepreneur? Getty Images

Rice University research finds certain cognitive factors appear in the minds of entrepreneurs

Houston Voices

The entrepreneur strides into a room of potential backers. Swathed in understated grey, she walks with assurance and chats in the cool, easy-going cadences of the leaders she plans to woo. But will an approach like this really affect the fate of her startup? And if not, what will?

A literature review by Rice Business professor Robert E. Hoskisson and colleagues Jeffry Covin of Indiana University, Henk W. Volberda of Erasmus University and Richard A. Johnson of Arnold & Porter offers clues to a vast range of questions about the entrepreneurs' trade. It also outlines where research still falls short. What, for example, most influences a startup founder's success? Is entrepreneurial triumph driven by innate ability or acquired skill? What's the role of factors such as regulatory structures or an entrepreneur's own work environment?

Traditional research, Hoskisson and his associates note, makes it clear that certain cognitive factors really do differentiate people who start new ventures from their more staid counterparts. And recent scholarship has traced how individual entrepreneurs decide to launch their startups and how they spot entrepreneurial opportunities. Still unclear, though, is whether entrepreneurs think differently overall, possess innate qualities that lend themselves to entrepreneurship or somehow become catalyzed by the entrepreneurial role itself.

More research could help answer those questions. Research is also needed to pinpoint exactly how the best entrepreneurs express their plans in order to sound legitimate enough to earn funding and support, Hoskisson's group says. What the scholarship does show is that that the grey-clad entrepreneur with the easygoing patter knows what she's doing: symbolic language, gestures and visual symbols all help create professional identity, emphasize control and regulate the emotions of a viewer. Setting, props, style of dress and expressiveness all count, and the more experienced the entrepreneur the more props she uses.

At the same time, no unified model fully explains how successful entrepreneurs gain their funding. Models range from the hyper-rational analysis offered by game theory to a stimulus-response model in which people react as if they're marionettes. Other mysteries include how the entrepreneurship impulse arises, how it shapes innovation and competitive advantage and how it is translated in individual actions and interactions. More research in these areas, says Hoskisson, would help not only entrepreneurs in the eternal quest for funding, but also the understanding of how to nurture human potential.

Examining institutional differences among countries and how that affects entrepreneurship is also ripe for study. So far, entrepreneurship research has focused on individual attributes. But there's a need, Hoskisson and his colleagues say, for scholars to connect the dots between startup success and political environments, rule of law, regulation and entrepreneurship.

The same goes for work on diverse contexts in emerging economies. In transition economies, China being one example, networks create political and social capital that allows special access and legitimacy. On the other hand, in those same countries ponderous bureaucracies and basic resource limitations can hamper entrepreneurial projects. Detailed understanding of such cultures will only get more urgent as ventures in emerging economies increase and companies that are "born global" proliferate.

Also on the research to-do list about entrepreneurs: the chances of securing funding in given emerging economies and the power — or frailty — of their intellectual property laws. Regulation, especially, plays a pivotal role in these countries, Hoskisson writes. The lighter the regulation, the more entrepreneurship flourishes, according to one study of 54 countries. On the other hand, countries blessed with a strong rule of law offer entrepreneurs more opportunities for strategic entry.

Understanding the entrepreneurial mind, and its interaction with the material world, isn't simple. Consider the late Texas billionaire H. Ross Perot's plan to send gifts to all POWs in Vietnam during the height of the Vietnam War. Unsurprisingly, the Vietnamese government announced that a gift delivery was impossible while Americans were bombing the country. Undeterred, Perot offered to rebuild anything the Americans had bombed. Rebuffed again, Perot chartered a plane to Moscow, instructing aides to deposit the Christmas presents, one by one, at Moscow post offices, addressed to Hanoi.

Amusing as it can be to hear about such entrepreneurial gumption, it may be even more useful to study entrepreneurship systematically. Not everyone can have an entrepreneur's brain, Hoskisson's review of research suggests, but good scholarship might be able to teach people how to walk the walk.

------

This story originally ran on Rice Business Wisdom.

Robert E. Hoskisson is the George R. Brown Emeritus Professor of Management at Jones Graduate School of Business at Rice University.

Family firms aren't investing in research and development — but why? Getty Images

Rice University research sheds light on what family office investors are looking for

Houston Voices

Family firms are publicly traded companies in which family members own at least 20 percent of the voting stock, and at least two board members belong to the family. For obvious reasons, the central principals in these firms tend to have a longer view than principals in non-family firms. Yet family firms invest less in research and development (R&D) in technology firms than their non-family counterparts. Since investments in R&D are stakes in the future, why this disparity?

Robert E. Hoskisson, a management professor at Rice Business, joined several colleagues to answer this question. Refining a sociological theory called the behavioral agency model (BAM), the researchers defined family-firm decisions as "mixed gambles" — that is, decisions that could result in either gains or losses.

Because success in high technology relies so much on innovation, it's especially puzzling when such a family owned business underinvests in R&D. So Hoskisson and his colleagues focused on the paradox of family firms in high tech.

According to previous research, family owners weigh both economic and non-economic factors when making business decisions. Hoskisson and his team labeled these non-economic factors socioemotional wealth (SEW). SEW can include family prestige through identifying with and controlling a business, emotional attachment to the firm or the legacy of a multigenerational link to the firm.

That intangible wealth (SEW) explained some of the families' R&D choices. While investment in R&D may lower future financial risk, it can threaten other resources the family holds dear. Expanded R&D spending, for instance, is linked with competitiveness. At the same time, it is associated with less family control. That's because to invest more in R&D, businesses typically need more external capital and expertise. So when a family firm underinvests in R&D, it may in fact be protecting its socioemotional wealth.

To further understand these dynamics, the researchers looked at three factors that they expected would raise families' R&D spending to levels more like non-family counterparts.

The first factor was corporate governance. As predicted, the researchers found that family firms with a higher percentage of institutional investors invested in R&D at levels more like those of non-family firms. The institutional investors naturally prioritized economic benefits far more than the founding family's legacy wealth (SEW).

The researchers also analyzed corporate strategy. Family firms, they found, invested more in R&D when it might be applied to related products or markets. Even families bent on preserving non-economic wealth could be lured by a big economic payoff, and related business are easier to control because they are closer to the family legacy business expertise.

Finally, Hoskisson and his colleagues looked at performance. When a family firm's performance lagged behind that of competitors, they reasoned, the owners would spend more on R&D. A higher percentage of institutional investors, the team theorized, would magnify this effect. Interestingly, the primary data (from 2004 to 2009) failed to support this hypothesis, while an alternative data set (from 1994 to 2002) confirmed it.

Further research, the investigators wrote, could shed useful light on this puzzle. They also encouraged study of how family firms conduct mergers and acquisitions. After all, while families can seem inscrutable from the outside, most run on some kind of economic system. The currency just includes more than money.

------

This story originally ran on Rice Business Wisdom.

Robert E. Hoskisson is the George R. Brown Emeritus Professor of Management at Jones Graduate School of Business at Rice University.

Ad Placement 300x100
Ad Placement 300x600

CultureMap Emails are Awesome

Texas is the 7th hardest working state in America for 2026, says report

Labor Day Report

Texans pride themselves on being industrious, and a new report has confirmed Texas as one of the 10 most hardworking states in America in 2026.

The Lone Star State claimed the No. 7 spot this year in a slight dip from its 2025 ranking, where it appeared in the top five. Texas last ranked 7th in 2024, but the state has consistently appeared among the top 10 for nearly a decade.

WalletHub determined the rankings after analyzing 10 "direct" and "indirect" work factors across all 50 states, and then graded each metric on a 100-point scale, where a score of 100 signified the "hardest working." Analysts then examined each state’s weighted average across all metrics to calculate its overall score and used the resulting scores to rank-order the states.

There was only a 10.32-point difference between Texas and South Dakota, who claimed the top spot as America's hardest working state in 2026 with a score of 64.59 out of a possible 100 points.

Texas ranked 6th nationally in the "direct" work factors category, which examined the following six metrics:

  • The state's average workweek hours.
  • Employment rates.
  • The share of households where no adults work.
  • The share of workers leaving vacation time unused.
  • The share of "engaged" workers — those that are "involved in, enthusiastic about, and committed to their work and workplace," as defined by Gallup.
  • The rate of "idle youth" — individuals aged 18-24 who are not currently enrolled in school, not working, and have no degree beyond a high school diploma or GED.

Texas ties with Louisiana for the second highest average workweek hours nationwide, with Alaska topping the list with the No. 1 longest workweeks in America. Alaska is the only state where workers clock in more than 40 hours per week at their jobs, with WalletHub reporting Alaskans work 41.4 hours on average weekly.

In the "indirect" work factors category — which encompassed workers' average commute times, the share of workers with multiple jobs, annual volunteer hours per resident, and the average leisure time spent per day — Texas ranked 36th nationwide.

Here's how WalletHub ranked Texas in three individual metrics:

  • No. 10 – Average commute times
  • No. 20 – Average leisure time spent per day
  • No. 30 – Employment rates

According to the World Economic Forum, Americans clock in about 1,800 hours at work per year on average, which is 468 more hours per year than workers in Germany. And many are leaving vacation time on the table, WalletHub says.

"Even when given the chance to take time off, many Americans won’t, as nearly half of workers don't expect to use all of their allotted vacation days," the report said. "It is possible to work hard without overdoing it, though. Hard work is key to success, and the residents of some states understand that better than others."

Hardest-Working States in America


The top 10 hardest working states in America in 2026 are:

  • No. 1 – South Dakota
  • No. 2 – North Dakota
  • No. 3 – Alaska
  • No. 4 – Hawaii
  • No. 5 – Wyoming
  • No. 6 – Nebraska
  • No. 7 – Texas
  • No. 8 – New Hampshire
  • No. 9 – Tennessee
  • No. 10 – Georgia
---

This article originally appeared on CultureMap.com.

Houston ranks No. 3 among rising coding markets in U.S.

city code

When you think of coders—the wizards who design, write and test programming languages for software and mobile apps—tech hotbeds like Silicon Valley and Austin might pop into your head.

But Houston has earned a spot on the coding map.

A new study puts the Houston area in third place among the fastest-growing metros for coding in the U.S.

The study, published by coding platform Coddy Tech, ranks Albuquerque, New Mexico, as the top on-the-rise market for coding. San Antonio sits in second place.

Houston earned a “momentum score” of 77 out of 100. The momentum category measured job growth for developers, rising interest in coding as measured by online searches, and growth in hackathon activity.

Here are the 10 fastest-rising U.S. metros for coding:

  • No. 1 Albuquerque, New Mexico
  • No. 2 San Antonio
  • No. 3 Houston
  • No. 4 Jacksonville, Florida
  • No. 5 Cape Coral, Florida
  • No. 6 Columbia, South Carolina
  • No. 7 New York City
  • No. 8 Salt Lake City
  • No. 9 North Port, Florida
  • No. 10 Tampa, Florida

The study analyzed the country’s 75 largest metros “to map where coding has taken hold and where it’s catching fire.” It took into account learning searches, GitHub developer density, job growth, interest in bootcamps and hackathon activity. Only 64 metros were eligible for the ranking of fastest-growing markets.

Austin tops ranking of coding capitals

Coddy crowned Austin the coding capital of the country, with Houston landing at No. 24 in the ranking of the most established coding hubs. San Antonio appeared at No. 16 and Dallas at No. 22.

Here are the top 10 coding hubs:
  • No. 1 Austin
  • No. 2 San Jose, California
  • No. 3 Seattle
  • No. 4 San Francisco
  • No. 5 New York City
  • No. 6 Salt Lake City
  • No. 7 Denver
  • No. 8 San Diego
  • No. 9 Los Angeles
  • No. 10 Raleigh, North Carolina

Why do coders matter?

Without coders, cellphones, laptops, smart TVs and other devices might not work well — or at all. Coding allows people to communicate with these devices, according to ComputerScience.org.

“Since computers do not communicate like humans, coding acts as a translator,” ComputerScience.org explains. “Code converts human input into numerical sequences that computers understand.”

NASA awards Texas Space Commission role in $10M aerospace workforce initiative

space hub

The Texas Space Commission is one of seven organizations tapped by NASA to lead the space agency's new state and regional Skilled Technical Workforce Hubs.

The $10.5 million initiative aims to help foster the next generation of skilled workers in the aerospace industry.

Through the new program, the hubs will work together over the next three years to meet growing industry needs by aligning “industry employers, community colleges, high school career and technical education programs, and workforce systems,” according to a news release from NASA.

It aims to create clear pathways for workers in technical jobs, like welding, electrical work and machining, plus other jobs that require advanced STEM knowledge but do not require a bachelor’s degree.

“The need for technical talent is already urgent and will only continue to grow as we return humanity to the Moon and set our sights on Mars and beyond,” Elaine Ho, associate administrator for the Office of STEM Engagement at NASA, said in the release. “NASA is uniquely positioned to be the catalyst and convener that accelerates America’s aerospace workforce development and fosters the next generation of technicians.”

As part of the initiative, the TSC plans to launch the statewide network known as the Texas Space STEM Alliance (TSSA). According to a TSC release, the TSSA will link up schools, colleges, workforce groups and aerospace companies to build a pipeline for space-industry workers.

Additionally, the TSC is developing the Texas Aerospace Pathways Plus (TAP+) portal to consolidate information on training programs, internships, apprenticeships, employment opportunities and scholarships, while also identifying regional gaps in workforce opportunities.

Other state and regional organizations to receive the award include:

  • Antelope Valley Community College District in Lancaster, California
  • Georgia Tech Research Corporation
  • Minnesota State Colleges and Universities
  • Southern Utah University
  • Space Florida
  • State Board for Community Colleges and Occupation Education, Arapahoe Community College in Littleton, Colorado

The Houston area is home to more than 43,000 aerospace and aviation professionals, according to the Greater Houston Partnership. The Texas Space Commission has been awarded $150 million for 24 projects since being established to increase the state’s space economy in 2023.

The funding for the NASA state hubs comes from NASA’s Office of STEM Engagement through its Next Gen STEM Project.