Power relationships among top managers: Does top management team power distribution matter for organizational performance?

2006 ◽  
Vol 59 (5) ◽  
pp. 622-629 ◽  
Author(s):  
Anne Smith ◽  
Susan M. Houghton ◽  
Jacqueline N. Hood ◽  
Joel A. Ryman
2014 ◽  
Vol 43 (5) ◽  
pp. 1524-1552 ◽  
Author(s):  
Peter Jaskiewicz ◽  
Joern H. Block ◽  
Danny Miller ◽  
James G. Combs

Emerging evidence suggests that pay dispersion among non-CEO top management team (TMT) members harms firm performance, which raises questions about why firms’ owners tolerate or even support it. Prior research shows that the key distinction between founder and family owners is that in addition to firm performance and growth goals, family owners pursue socioemotional goals. On the basis of this distinction, we develop and test theory linking founders’ and families’ ownership to TMT pay dispersion. Consistent with our theory, a Bayesian panel analysis of Standard & Poor’s 500 firms shows that founder owners use less TMT pay dispersion and that family owners, relative to founder owners, use more, although that declines across generations. We also provide evidence that TMT pay dispersion harms firm performance. Our theory and results are significant because they help to explain why some owners favor compensation practices that cause TMT pay dispersion, despite evidence that this harms firm performance.


2000 ◽  
Vol 26 (5) ◽  
pp. 911-945 ◽  
Author(s):  
Shelley S. Gordon ◽  
Wayne H. Stewart ◽  
Robert Sweo ◽  
William A. Luker

We reexamine and extend the antecedents of strategic reorientation, a change in strategy combined with change in at least two of organization structure, power distribution and control systems, presented by Lant, Milliken, and Batra (1992) by using archival data (1987–1993) for firms in the stable furniture and turbulent computer software industries. While enabling direct comparability of results from the two studies, we specify an extended, integrated model of change forces, and test the hypotheses with a more robust data analytic technique, hierarchical regression analysis. The results support industry turbulence and CEO turnover as precursors to strategic reorientation, and suggest that industry turbulence conditions managers’ external attributions for negative financial performance in influencing strategic reorientation. Alternatively, the results indicate that top management team turnover is negatively related to strategic reorientation. The results do not support the Lant et al. (1992) conclusions that low past financial performance, top management team heterogeneity, awareness of environmental changes, and external attributions for negative financial performance outcomes are significantly associated with strategic reorientation. Structural equation analysis indicated the predictive superiority of the respecified model, and we offer suggestions for theoretical refinement and development of strategic reorientation.


2014 ◽  
Vol 52 (3) ◽  
pp. 540-558 ◽  
Author(s):  
Gregorio Sanchez-Marin ◽  
J. Samuel Baixauli-Soler

Purpose – The purpose of this paper is to clarify the influence of chief executive officer (CEO) reputation on top management team (TMT) compensation, proposing corporate governance characteristics as a moderator of the relationships between the power of top managers to extract rents and the importance of external signals. The study aims to expand the domain of executive compensation literature by including the role of CEO reputation in the context of non-Anglo-Saxon corporate governance systems. Design/methodology/approach – The paper opted for a panel methodology for the period 2004-2009, including 534 observations from Spanish listed companies. Data were obtained from several sources. Compensation and governance information was obtained from the Spanish Stock Exchange National Commission; data regarding CEO reputation were obtained from Spanish Corporate Reputation Monitor, and, finally, financial statement was obtained from the OSIRIS database. Findings – The paper provides empirical insights on the CEO reputation diffusion on TMT compensation, showing different scenarios depending on effectiveness of corporate governance. CEO reputation diffusion on TMT pay is strengthened or weakened by the organizational governance effectiveness. General evidence supports the notion that in countries characterized by an incomplete corporate governance system, boards – and also indirectly the structure of ownership – act as a catalyst for external signs of legitimacy, rather than for the organization's and stakeholders’ interests. Research limitations/implications – Because of the difficulty in pooling information for a long period from three different sources of data, the number of observations is not very large. Therefore, researchers are encouraged to test the proposed propositions further using other context of corporate governance. Practical implications – The paper includes implications for the development of effective governance mechanisms which promote an adequate link between the CEO reputation and the TMT compensation, avoiding rent extractions. Originality/value – The paper contributes to new international evidences regarding relations between top managers’ reputations and compensation. Specifically, it allows reinforcement of the importance of institutional arguments in the understanding of the effectiveness of governance mechanisms in large listed companies.


2018 ◽  
Vol 3 (1) ◽  
pp. 18
Author(s):  
Milkah Kimonda Chebii ◽  
Dr. James Karimi Ngari

Purpose: The purpose of this was to analyze the influence of knowledge creation on organizational performance of state owned commercial enterprises in Kenya. Methodology: This study was based on explanatory and descriptive research designs since they were more appropriate to test the hypotheses. The target population comprised of 275 members of top management team of 55 state-owned commercial enterprises in Kenya, as at 31st October 2016. The study utilized simple random sampling to select a sample of 268 members of top management team in the 55 state-owned commercial enterprises.Results: Response rate of 71% was obtained and analytical tests conducted were Pearson correlation coefficients, One Way ANOVA, and Multiple linear regression. The correlation coefficients for return on equity was (r = -0.035, p=0.635) and return on asset was (r = 0.063, p = 0.388). One-Way ANOVA results was F (14, 173) = 2.483, p=0.003. The regression for coefficient based on return on equity for knowledge creation was: unmoderated models; β = -1.044, t (-1.657), p=0.1 and for moderated model; β = -7.317, t (-4.505), p=0.000 respectively. The regression coefficient based on return on asset model for knowledge creation was: unmoderated models; β=0.134 t (0.608) p = 0.544 and for moderated models; β = -0.335, t (-0.533), p = 0.595. The study concludes that there is no significant influence of knowledge creation on performance based on return on assets but there is significant influence of knowledge creation on organizational performance based on return on equity of state owned commercial enterprises in Kenya.Contribution to Practice, Theory and Policy: Based on the findings that knowledge creation influences the organizational performance of state owned commercial enterprises in Kenya, the study recommends that organizations should encourage the collaboration, practice, education, and interaction as ways of creating knowledge.


2013 ◽  
Vol 66 ◽  
pp. 64-77 ◽  
Author(s):  
Vadimas Diska ◽  
Albinas Marčinskas

Šiuolaikinės ekonomikos vystymosi sąlygomis, kai žinios tampa dominuojančiu veiksniu ir auga specialiųjų žinių vaidmuo bei žmogiškojo kapitalo reikšmė, plečiasi informacinių technologijų galimybės, pastebima vadybinės veiklos sudėtingėjimo tendencija. Būtent tiems, kurie vykdo vadybinę veiklą, tenka esminė užduotis paversti žinias ir švietimą tiesiogine visuomenės produktyvumo jėga, tikruoju visuomenės ir jos ekonomikos kapitalu. Straipsnyje pateikiama aukščiausio lygio vadovų ir jų komandų samprata bei vaidmens svarba organizacijose. Pagrindinis dėmesys skiriamas aukščiausio lygio vadovų komandų teorinių ir empirinių tyrimų rezultatams, atskleidžiant šių komandų reikšmingumą įmonių veikloje žiniomis grindžiamos visuomenės iššūkių kontekste.Pagrindiniai žodžiai: žiniomis grindžiama visuomenė, aukščiausio lygio vadovai, aukščiausio lygio vadovų komanda.The role and impact of top management teams on organizations’ performance in the context of knowledge-based society  Vadimas Diska, Albinas Marčinskas SummaryThe most important issue in the article is how companies, because of great complexity and rather vague environmental conditions, knowledge-based society challenges, in order to stick to their position and gain competitive advantage, must be able to anticipate and react timely to external and internal environmental pressure and show an initiative to undergo changes. The nature of the organization’s reaction and efficiency depends on the top management team characteristics, structure, and potency.The article analyzes the conception of top management teams, their particularity, and the role they play in the organization. It is stressed that considering the role and importance of top management team in an organization, the scientists of strategic management and other fields much attention devote to their performance investigation. In their opinion, the organization’s top management team greatly impacts strategic trends and, therefore, is one of the main strategic resources (Castanias, Helfat, 1991; Michel, Hambrick, 1992; Finkelstein, Hambrick, 1996; Certo et al. 2006).The article stresses that the investigations of top management teams greatly developed in the 80’s of the last century; they were based on the “upper echelon“ theorical concept which illustrated different top management team aspects in the context of structure, decision making, and performance. In the previous “upper echelon“ investigations, while analysing the possible links between a top management team demographic characteristics and different organization results, the organizational demography approach prevailed. The performed investigations confirm the existing link between top management teams and organizational performance which is very important under conditions of rapid environmental changes.The article presents the main trends revealed in the scientific literature on the top management teams: team resources, team processes, managing team performance, and personal integration into the task. Therefore, it is important to have a better understanding of how top management teams impact organizational performance, not only to indentify the demographic indexes, but also to evaluate team and individual processes which function in top management teams. The investigation review has revealed that top management teams impact the research which was based on the “upper echelon“ theoretical concept, from the internal organizational level transcending to branch, country, international levels and encompassing different types of organizations – both in business and public sectors, and also organizations that are in different life cycle stages. On the basis of accomplished analysis, new problematic aspects of TMT have been revealed, which require more research.> 


1993 ◽  
Vol 73 (3_suppl) ◽  
pp. 1187-1201 ◽  
Author(s):  
Karen A Bantel

The relationship between the demographic composition of the top management team and strategic clarity was analyzed using data from a sample of retail banks. The demographic characteristics of education, homogeneity in age and tenure, and heterogeneity in educational major and functional background were analyzed. Controlling for organizational size and firms' performance, banks with a clear strategy are characterized by top management teams that are heterogeneous on education major and functional background. These results suggest support for the benefits of cognitive diversity for top managers engaged in strategic decision making.


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