Competitive Repertoire Complexity: A Potential Mediator in the Upper Echelons Propositions?

Patriciah G Mwangi,Ganesh P Pokhariyal,Kennedy Ogollah ,Zachary Bolo Awino

doi:10.5539/ijbm.v13n10p83

Patriciah G Mwangi, Ganesh P Pokhariyal + Show 2 more

Open Access

https://doi.org/10.5539/ijbm.v13n10p83

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Abstract

This study sought to evaluate the relationships between top management team (TMT) heterogeneity, competitive repertoire complexity and firm performance. The study was grounded on the upper echelons theory which argues that the TMT characteristics affect the organization&rsquo;s performance through their influence on strategic choices. This study sought to investigate this relationship using the complete array of strategies deployed by heterogeneous TMTs. The study was conducted through a cross sectional descriptive survey of 53 large food and beverage manufacturers in Kenya. Primary data and secondary data was collected through a structured questionnaire and checklist respectively and analyzed by descriptive and inferential statistics. The study established that TMT heterogeneity had a significant negative effect on financial, internal processes and social performance in line with the upper echelons theory. Competitive repertoire complexity was not associated with TMT heterogeneity and did not significantly mediate the relationship between TMT heterogeneity and firm performance as expected from the information processing theory. This study contributed to the strategic management field by providing empirical evidence to the upper echelons and resource based view. Managers would benefit by careful consideration of how their TMTs were designed. Policy makers would also be aware about the competitive actions they adopted and their effect on their organizations performance.

Highlights

1.1 Top Management Team HeterogeneityThe people at the helm of the organization determine its fortunes by influencing its actions and their outcomes
To examine the first objective, this study set out the first hypothesis, H1: top management team (TMT) heterogeneity has no significant effect on firm performance which was tested against the six performance perspectives of the sustainable balanced scorecard (SBSC)
This study found that TMT heterogeneity affected different dimensions of performance differently

Summary

Introduction

1.1 Top Management Team HeterogeneityThe people at the helm of the organization determine its fortunes by influencing its actions and their outcomes. Hambrick and Mason (1984) argued that to understand why organizations behave and perform in a certain way it is important to consider their top executives They argued that viewing organizations as abstract entities whose outcomes were either planned or unfortunate was not exhaustively insightful because the organization’s actions and the success or failure associated with them are as a result of the decisions of their key decision makers. The top management team (TMT) comprises of the managers at the helm of the organization with whom the overall decision making and running of the organization is vested. TMT heterogeneity means the differences in the attributes and traits of the senior managers of an organization It implies that the senior management’s characteristics are different from one manager to the next. In terms of the characteristics of managers there are few subgroups within the TMT

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