Top management team (TMT) tenure diversity and firm performance

2016 ◽  
Vol 24 (3) ◽  
pp. 454-470 ◽  
Author(s):  
Tomohiko Tanikawa ◽  
Yuhee Jung
Keyword(s):  
Firm Performance ◽  
Top Management Team ◽  
Negative Relationship ◽  
Management Team ◽  
Hierarchical Regression ◽  
Top Management ◽  
Content Type ◽  
Return On Equity ◽  
Firm Financial Performance ◽  
Age Related

Purpose The purpose of this paper is twofold: first, to investigate the effect of top management team (TMT) tenure diversity and firm financial performance (return on equity [ROE], return on assets [ROA]), and, second, to examine the moderating effect of TMT average age between TMT tenure diversity and firm performance. Design/methodology/approach The paper presented results from a quantitative study of 744 TMTs in Japanese manufacturing firms. The multiple hierarchical regression analysis was used to test the hypotheses. Findings The results show that TMT tenure diversity had a negative and significant main effect on ROE but not ROA. Furthermore, the results also indicated that the negative relationship between TMT tenure diversity and firm performance was attenuated by having older TMTs. Originality/value First, this paper expands scope of research on TMT diversity, which has hitherto primarily on non-individualistic variables (such as industry setting) by examining the moderating role of an individualistic variable (TMT average age). Second, this paper extended the attempts to apply the age-related theory by considering the role from the viewpoint of group level, namely, TMT average age.

The relationships between CEOs' psychological attributes, top management team behavioral integration and firm performance

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Hasan Yousef Aljuhmani ◽  
Okechukwu Lawrence Emeagwali ◽  
Bashar Ababneh
Keyword(s):  
Firm Performance ◽  
Direct Effect ◽  
Top Management Team ◽  
Management Team ◽  
Behavioral Characteristics ◽  
Top Management ◽  
Content Type ◽  
Behavioral Integration ◽  
Self Evaluation ◽  
Core Self

PurposeThis study aims to investigate the impact of chief executive officers' (CEO’s) core self-evaluation and grandiose narcissism on firm performance. This work combines bright and dark personality sides to explore how complex CEO's behavioral characteristics affect firms' outcomes. In addition, top management team (TMT) behavioral integration is considered as an organizational setting that acts as a conductive device bridging CEOs behavioral characteristics with firms' performance.Design/methodology/approachThe data for this study are based on 187 respondents, including CEOs and TMTs, across medium and large firms in Turkey through an online survey using a questionnaire. Structural equation modeling (SEM) was used to analyze the data collected.FindingsThe study finds that only CEO-TMT narcissism and TMT behavioral integration have a positive direct effect on firm financial performance. Contrary to expectations, CEO-TMT core self-evaluation has a negative direct effect on firm performance. Moreover, the results show that environmental dynamism interacts positively and significantly with CEO-TMT narcissism. Thus, the claim that TMT behavioral integration has a mediating effect is not supported in the context of medium and large firms in Turkey.Originality/valueThis study contributes to the upper echelons theory (UET) literature by highlighting the boundary conditions under which narcissistic CEOs can interact with more behaviorally integrated TMT members to exchange information, make joint decisions and collaborate in a relatively dynamic environment, as well as aggregating the bright side and dark side of CEOs personality traits and examining their effects alongside those of TMT behavioral integration on the firm performance. Finally, this study enriches the upper echelons literature by providing evidence from Turkey.

scholarly journals Top management team meetings and firm performance

2020 ◽  
Vol 33 (6) ◽  
pp. 691-708
Author(s):  
Iman Harymawan ◽  
Mohammad Nasih ◽  
John Nowland
Keyword(s):  
Firm Performance ◽  
Performance Metrics ◽  
Top Management Team ◽  
Poor Performance ◽  
Top Management Teams ◽  
Management Team ◽  
Top Management ◽  
Content Type ◽  
Team Meeting ◽  
Team Meetings

Purpose How do shareholders know if corporate managers are doing their jobs? This paper aims to propose using top management team meetings as a measure of the behavior of company managers. More meetings may indicate effective effort by top management to enhance company performance. Alternatively, more meetings may reflect procrastination and decision paralysis. Design/methodology/approach Using top management team meeting data publicly disclosed by Indonesian companies during 2010–2017, this study tests for these hypothesized relationships between top management team meeting frequency and firm performance. Findings This study found that top management team meetings are positively related to firm performance, indicating that more meetings do represent more effective effort by top management teams. Further analysis shows that only firms that consistently hold more meetings than their peers perform better, particularly during periods of poor performance. Originality/value This study highlights top management team meetings as a valid signal of management effort and suggests there should be louder calls for disclosure of these types of executive performance metrics around the world.

Top management team diversity and firm performance: exploring a function of age

2017 ◽  
Vol 23 (3/4) ◽  
pp. 156-170 ◽  
Author(s):  
Tomohiko Tanikawa ◽  
Soyeon Kim ◽  
Yuhee Jung
Keyword(s):  
Firm Performance ◽  
Financial Performance ◽  
Interactive Effect ◽  
Top Management Team ◽  
Management Team ◽  
Top Management ◽  
Socioemotional Selectivity Theory ◽  
Content Type ◽  
Socioemotional Selectivity ◽  
Age Diversity

Purpose Based on socioemotional selectivity theory, the authors aimed to develop and test hypotheses that identify the direct effect of top management team (TMT) age diversity on firms’ financial performance (return on equity [ROE], return on assets [ROA]) and the interactive effect of TMT age diversity and TMT average age on firms’ financial performance. Design/methodology/approach The paper presents results from a quantitative study of 867 TMTs in Korean manufacturing firms. Multiple hierarchical regression analysis was used to test the hypotheses. Findings The results show that TMT age diversity had a negative and significant main effect on ROE but not on ROA. They also indicate that the negative relationship between TMT age diversity and firm performance (ROE) was attenuated when the members of TMTs were relatively older. Originality/value First, this study extends existing TMT research, which mainly focuses on macro factors, such as industry and environment, by using micro factors, including TMT age diversity and TMT average age. Second, this paper combines and extends previous TMT studies, which have been dominated by either “property” or “tendency”, by examining the interactive effect of the distributional property (diversity) and central tendency (average) of TMT age on firms’ financial performance. Finally, this study indicates that socioemotional selectivity theory may be useful to explain the link between TMT age diversity and firms’ financial performance.

Examining the pull, the push, and their simultaneous effects on managerial turnover

2020 ◽  
Vol 58 (12) ◽  
pp. 2639-2654 ◽  
Author(s):  
Yoonhee Choi ◽  
Namgyoo K. Park
Keyword(s):  
Top Management Team ◽  
The United States ◽  
Management Team ◽  
Top Management ◽  
Content Type ◽  
Economic Mechanism ◽  
Positive Effects ◽  
Psychological Mechanisms ◽  
Managerial Turnover ◽  
Psychological Mechanism

PurposeThis paper aims to examine the economic and psychological mechanisms in turnover at the managerial level. The paper investigates how (1) the ease of moving posed by alternative jobs (i.e. the economic mechanism) and (2) the desire to move due to low job satisfaction (i.e. the psychological mechanism) simultaneously influence top management team (TMT) turnover and these managers' subsequent job position and pay.Design/methodology/approachUsing 25 years of panel data on more than 2,000 top managers in the United States, the paper utilizes fixed-effects logistic regressions and the ordinary least squares model to test the hypotheses.FindingsThe authors find that CEO awards (an economic mechanism) and low compensation (a psychological mechanism) independently have positive effects on turnover. Turnover due to the economic mechanism leads to a higher position and pay, whereas turnover due to the psychological mechanism does not guarantee the same outcome. Further, when examining how pay dissatisfaction influences turnover simultaneously with CEO awards, the authors find that managers with the highest pay leave their firm, and not those with the lowest pay.Originality/valueThe paper employs the pull-and-push theory in the employee turnover literature and applies it to the top management team literature. By doing so, this paper contributes original insights to how economic and psychological mechanisms simultaneously affect managerial turnover and its subsequent outcomes.

The Impact of Top Management Team Demography on Firm Performance in China

2005 ◽  
Vol 4 (3) ◽  
pp. 227-250 ◽  
Author(s):  
Li-Qun Wei ◽  
Chung-Ming Lau ◽  
Michael N Young ◽  
Zhihui Wang
Keyword(s):  
Firm Performance ◽  
Top Management Team ◽  
Management Team ◽  
Top Management ◽  
The Impact

Top management team heterogeneity, corporate social responsibility and firm risk: an emerging country perspective

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Mohammad Hassan Shakil ◽  
Nor Shaipah Abdul Wahab
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Top Management Team ◽  
Management Team ◽  
Top Management ◽  
Total Risk ◽  
Firm Risk ◽  
Content Type ◽  
Listed Firms ◽  
Corporate Social

Purpose This study aims to examine the effects of top management team (TMT) heterogeneity and corporate social responsibility (CSR) on the firm risk of Bursa Malaysia listed firms. Also, this study examines the moderating effect of CSR between TMT heterogeneity and firm risk. Design/methodology/approach This study uses panel regression models to test the hypotheses. The sample of this study is Bursa Malaysia non-financial listed firms from 2013 to 2017 with 3,055 observations. Findings This study finds significant effects of TMT age and tenure heterogeneities on total risk. Effects on idiosyncratic risk are evident only within age heterogeneity. Further, this study finds negative effects of CSR on total and idiosyncratic risks. CSR significantly moderates the relationship between total TMT heterogeneity and firm systematic risk. Practical implications This study reduces the literature gap by providing useful insights on the effects of CSR activities and TMT heterogeneity on firm risk. The findings can also provide hints to investors to assist them in assessing firm risk based on TMT heterogeneity and firms’ CSR. This study can also benefit shareholders in their attempts to mitigate the risk of their portfolio by investing in firms that are socially responsible as firms with high CSR suffer lower total and idiosyncratic risks. Originality/value Previous studies have emphasised on the influence of TMT characteristics and CSR on firm performance. However, studies that investigate the effects of TMT heterogeneity and CSR on firm risk are limited in the context of Malaysia.

Using Causal Mapping to Uncover Cognitive Diversity within a Top Management Team

2005 ◽  
pp. 203-232 ◽  
Author(s):  
David P. Tegarden ◽  
Linda F. Tegarden ◽  
Steven D. Sheetz
Keyword(s):  
Firm Performance ◽  
Top Management Team ◽  
Black Box ◽  
Top Management Teams ◽  
Management Team ◽  
Top Management ◽  
Cognitive Diversity ◽  
Causal Mapping ◽  
And Cluster Analysis ◽  
Cognitive Factions

The cognitive diversity of top management teams has been shown to affect the performance of a firm. In some cases, cognitive diversity has been shown to improve firm performance, in other cases, it has worsened firm performance. Either way, it is useful to understand the cognitive diversity of a top management team. However, most approaches to measure cognitive diversity never attempt to open the “black box” to understand what makes up the cognitive diversity of the team. This research reports on an approach that identifies diverse belief structures, i.e., cognitive factions, through the use of causal mapping and cluster analysis. The results show that the use of causal mapping provides an efficient and effective way to identify idiosyncratic and shared knowledge among members of a top management team. This approach allows the cognitive diversity of the top management team to not only to be uncovered, but also to be understood.

Founder Versus Family Owners’ Impact on Pay Dispersion Among Non-CEO Top Managers: Implications for Firm Performance

2014 ◽  
Vol 43 (5) ◽  
pp. 1524-1552 ◽  
Author(s):  
Peter Jaskiewicz ◽  
Joern H. Block ◽  
Danny Miller ◽  
James G. Combs
Keyword(s):  
Firm Performance ◽  
Top Management Team ◽  
Management Team ◽  
Test Theory ◽  
Top Management ◽  
Panel Analysis ◽  
Top Managers ◽  
Pay Dispersion

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.

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