["Journal of Management Studies, EarlyView. ", "\nAbstract\nWe theorize how state ownership reweights organizational objectives when political and market conditions shift. Using a mixed‐method, history‐to‐theory design, we examine 160 state‐owned and 132 private Brazilian firms from 1973 to 1993. We argue that two mechanisms – appointment politicization and constituency‐protection salience – alter managerial discretion and the political costs of visible job losses. Panel tests show that CEO turnover is higher in SOEs than in private firms and that this ownership gap widens under democracy. By contrast, SOEs are not uniformly job‐protective: they exhibit selectively lower probabilities of large layoffs under democratic regimes and recessions, while downturns do not materially change the SOE–private firm difference in CEO turnover. Archival evidence and elite interviews trace these patterns to shifting coalitions that politicize appointments and heighten employment‐protection salience, channelling adjustment towards leadership replacement or employment buffering. We synthesize that these findings in a framework that maps SOE responses in a continuous space defined by pressures to curtail managerial discretion and to protect constituencies, offering a portable lens for comparing state capitalism across contexts. The study replaces fixed‐mandate views of SOEs with a contingent, coalition‐based account of how state ownership shapes adaptive objectives over time.\n"]