There is no conclusive evidence on the firm’s preference in appointments of top management. In this study four theoretical hypotheses on the likely source of appointment (internal vs. external) are examined using multivariate logistic regressions on a sample of 260 top management appointments in U.S. firms. Two factors were found to have a significant effect: 1) Firm size - Larger firms tend to appoint more from their internal sources, probably due to their informal commitment to their reservoir of internal talent; 2) Power - The more power the firm is willing to delegate to its next manager, the more likely are external successions. Two other factors, the disposition of the former top manager (left/stayed with the firm) and firm’s past performance, were found to be insignificant.