Conflicts in top management teams and team/firm outcomes

Abstract

PurposeThe purpose of this paper is to examine how different conflict‐handling approaches moderate the relationship between conflicts and TMT as well as firm performance by adopting the Thomas terminology.Design/methodology/approachCEOs, TMT members, and lower‐level employees of 200 firms in the telecommunication industry in Mainland China were surveyed. Survey data collected from 123 CEOs, 442 TMT members, and 894 employees and archival data of firm performance were matched for hierarchical regression modeling (HRM) analyses.FindingsResults show relationship conflict reduces team cohesiveness and both relationship and task conflicts are negatively related to firm performance. With relationship conflict, the results show using compromising approach could help reduce its negative effects on TMT cohesiveness and firm performance; but avoiding either type of conflict will undermine both team and firm outcomes. Accommodating approach does not have significant moderating effect on conflict‐outcome relationships.Research limitations/implicationsThe study reveals some interesting insights, but it does not include any contextual variables such as firm culture or team norms or climate which are shown to relate to both conflict types and conflict management approaches.Originality/valueBy examining the interplay between conflict types and conflict management approaches, the paper offers interesting insights into the connection between nature of conflicts, conflict management, employee‐rated TMT effectiveness, and objective firm performance.