Abstract
We argue that top management team (TMT) demographic faultlines accelerate the downward spiral of organizational decline by hampering information processing and deteriorating TMT functioning. That is, the first performance decline more likely leads to further decline when the TMT has strong faultlines. In addition, CEO power and organizational slack buffer but market complexity escalates the detrimental effects of strong TMT faultlines. Data on publicly listed firms in China provides support to these predictions.
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