Profiting from CEOs’ Empowerment of TMTs: Does the Social Context Matter?

Abstract

This study enriches the research about team empowerment by focusing on top management teams (TMTs) and taking an aspect of social context into consideration: the relational demography between CEOs and team members. Using data from a multi-source survey in 129 Chinese organizations, we found that empowering leadership, which has primarily been examined at lower-level teams, was also important at the top executive level. CEOs’ empowerment of TMTs predicted superior organizational performance. This influence was found to be most beneficial when the CEO and TMT members differed in informational background but had long team tenure overlap (i.e., a three-way interaction). Introducing contextual contingencies and testing their influence broadens the understanding of the drivers of team performance and refines the guidance for practitioners regarding top team management.