Strategic issue diagnosis by top management teams: A multiple-agent model

2021 ◽  
pp. 147612702199379
Author(s):  
Kent D Miller ◽  
Shu-Jou Lin

This study proposes an explanation for the accuracy of top management teams’ diagnoses of strategic issues. Key determinants are the number of members on the management team, as well as the span of managers’ attention and its allocation to the environment and to other managers. Depending on the nature of the issues faced, managers who reason analogically from past experience to draw inferences about current strategic issues may arrive at accurate or inaccurate diagnoses. We specify and analyze a multiple-agent model that encompasses individual, top management team, and context characteristics relevant to classifying strategic issues as opportunities or threats based on learning from experience. Results from our model indicate that attending to the environment improves the accuracy of strategic issue diagnoses, whereas attending to other managers’ inferences proves detrimental. Adding members can enhance issue diagnosis accuracy for a team that makes decisions according to majority-rule voting, despite leaving the accuracy of individual managers’ diagnoses unchanged.

2018 ◽  
Vol 30 (5) ◽  
pp. 571-590 ◽  
Author(s):  
Natalia Garcia-Carbonell ◽  
Fernando Martin-Alcazar ◽  
Gonzalo Sanchez-Gardey

Purpose Despite the strong influence of Hambrick and Mason’s (1984) seminal work, the effects of top management team (TMT) characteristics on strategic processes remain unclear. This study aims to go beyond the traditional upper echelon theory and to propose a human capital taxonomy of TMTs from the perspective of top human resources managers. Design/methodology/approach The research integrates arguments from the strategic human capital and strategic issue diagnosis literatures. An exploratory cluster analysis was conducted in an attempt to describe different human capital typologies in TMTs in a sample of 120 Spanish companies. Findings The exploratory analysis showed three distinct human capital profiles: “technocratic teams”, “highly skilled teams” and “operational teams”. In addition, this paper provides preliminary results about the effects of each profile in the above taxonomy on strategic issue diagnostic processes, suggesting that “highly skilled teams” present the most appropriate combination of human capital attributes. Practical/implications This analysis provides a guide for top managers regarding the human capital needs they may face when interpreting strategic issues in strategy formation processes. Originality/value This paper makes a twofold contribution to the extant literature: proposing an analysis of TMTs’ human capital from a synergistic perspective (“human capital profiles”) instead of using the traditional “more is better” approach and providing preliminary explanations about how those human capital combinations contribute to success in the strategic issue diagnosis process.


2020 ◽  
pp. 147612702091932
Author(s):  
Korcan Kavuşan ◽  
Nüfer Yasin Ateş ◽  
Anna Nadolska

We investigate why some acquirers value targets’ technological relatedness (i.e. similarity and complementarity) more than others. We propose that the importance of technological relatedness as a target selection criterion is influenced by the extent to which an acquirer Top Management Team is divided into subgroups based on managers’ demographic characteristics (i.e. faultlines). That is because an acquirer Top Management Team’s understanding of technological relatedness depends on the team’s information processing capabilities, driven primarily by Top Management Team faultlines. Our analysis of 94 realized acquisitions among 2082 potential acquisition matches in high-technology industries shows that while both technological similarity and complementarity increase the likelihood of an acquisition match, only the impact of technological complementarity is affected by Top Management Team faultlines. Specifically, we find that Top Management Teams with moderately strong divisions between subgroups pay more attention to technological complementarities between their firm and potential acquisition targets than Top Management Teams with very strong or weak divisions.


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.> 


2004 ◽  
Vol 47 (5) ◽  
pp. 633-656
Author(s):  
Christophe Boone ◽  
Woody Van Olffen ◽  
Arjen Van Witteloostuijn ◽  
Bert De Brabander

2020 ◽  
pp. 147612702096268
Author(s):  
Kalin D Kolev ◽  
Gerry McNamara

Past research rooted in the Behavioral Theory of the Firm has extensively examined the impact of performance feedback on organizational change and risk taking, finding robust effects that performance shortfalls enhance the risk taking of firms. We argue that the strength of this effect is likely to be contingent on the attributes of the firm’s top management team. To enhance our understanding of which firms are more likely to be sensitive to performance cues, we draw on the Upper Echelon Theory to theorize that key structural attributes of the top management team—tenure and gender diversity, size, and pay disparity—affect how top executives interpret poor performance and act upon it through engagement in strategic risk taking. Results show that top management teams with greater tenure diversity, smaller size, and smaller pay disparity among members engage in more strategic risk taking following performance shortfalls.


1994 ◽  
Vol 1994 (1) ◽  
pp. 372-376 ◽  
Author(s):  
Susan Houghton ◽  
Carl P. Zeithaml ◽  
Thomas S. Bateman

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