Top Management Team Effectiveness Research Articles

Enhancing post‐acquisition organisational performance: the role of the top management team

PurposeThe purpose of this paper is to address the link between the effectiveness of the top management team (TMT) and post‐acquisition organisational performance.Design/methodology/approachThe paper undertakes a literature review, identifies four streams of research regarding TMT effectiveness and explores the role of TMT in the post‐acquisition integration process.FindingsThe paper identified the characteristics of an effective TMT in the post‐acquisition integration context. It pointed to the fact that, if TMTs effectively utilise the resources, effectively manage group processes and demonstrate high levels of group task leadership as well as personal integration to the task, then it will lead to an effective decision‐making process, demonstrate vision and be able to exert influence and commitment to the goal from their subordinates.Practical implicationsThe paper can be used by managers to help them identify the critical factors that contribute to the success of an acquisition.Originality/valueThe paper addresses the literature on TMT effectiveness, applies it to the M&A context and proposes a way of examining this relationship.

Ethical and despotic leadership, relationships with leader's social responsibility, top management team effectiveness and subordinates' optimism: A multi-method study

In this multi-method study, we examined the relationships of leader's social responsibility with different aspects of ethical leadership (morality and fairness, role clarification, and power sharing) as well as with despotic leadership. We also investigated how these leadership behaviors relate to effectiveness and optimism, using multiple-source ratings. Interviews with CEOs ( N = 73) were coded for the presence of leader's social responsibility and its facets. Also, using questionnaires, direct reports rated each CEOs' leader behavior ( n = 130) and a second group of direct reports ( n = 119) rated effectiveness and optimism. As expected, leaders high on social responsibility were rated higher on ethical leadership and lower on despotic leadership. Ethical leadership was also positively related to perceived top management team effectiveness and subordinates' optimism about the future of the organization and their own place within it.

Direct and interaction effects of top management team and board compositions on R&D investment strategy

AbstractThis paper examines why firms differ in levels of R&D investment intensity by developing and testing a theory of direct and interaction effects of top management team and board outsider composition on R&D intensity. The theory is tested in a longitudinal sample of technology‐intensive firms that completed an initial public offering. The results indicate that both top management team composition and board composition have direct and additive effects on R&D investment intensity. Also, monitoring by outsider directors does not constitute a universally effective governance mechanism with regard to a firm's R&D investment strategy. Firms opt for lower levels of R&D investment intensity when their outsider‐rich board interacts with a team of managers who have high levels of (1) firm tenure, (2) shared team‐specific experience, or (3) functional heterogeneity. When a firm's competitiveness relies on sustained R&D investments, it is important to note these interaction effects and make adjustments to promote a healthy dialogue between managers and the board. Adjustments could be made to the management team composition (e.g., initiating management turnover to reduce firm tenure) or to the bundle of governance mechanisms (e.g., partially substituting board monitoring with other mechanisms). Copyright © 2006 John Wiley & Sons, Ltd.

Cooperative Goals, Leader People and Productivity Values: Their Contribution to Top Management Teams in China*

abstract This study proposes that when top management team members are convinced that their leader is committed to people and productivity, they conclude that their leader is effective and contribute to making their organization innovative. Cooperative goals among top management team members may be credible evidence that their leader has people and production values. Executives from over 100 organizations in China completed measures of their cooperative, competitive, and independent goals, their leader's people and production values, and their leader's effectiveness. CEOs from these firms rated their organization's innovativeness. Structural equation analysis suggested that cooperative goals among top management teams convince them that their leader values people and production and that these values in turn result in leader effectiveness and organizational innovation. Results, coupled with previous research, were interpreted as suggesting that cooperative goals and leader people and production values are foundations for leader and top management team effectiveness in China.

Strategic leadership and executive innovation influence: an international multi‐cluster comparative study

AbstractThis study investigates the relationship of strategic leadership behaviors with executive innovation influence and the moderating effects of top management team (TMT)'s tenure heterogeneity and social culture on that relationship. Using survey data from six countries comprising three social cultures, strategic leadership behaviors were found to have a strong positive relationship with executive influence on both product–market and administrative innovations. In addition, TMT tenure heterogeneity moderated the relationship of strategic leadership behaviors with executive innovation influence for both types of innovation, while social culture moderated that relationship only in the case of administrative innovation. Copyright © 2005 John Wiley & Sons, Ltd.

Conflict Management for Effective Top Management Teams and Innovation in China*

abstract Top management teams may be critical for developing organizations that can keep abreast of marketplace changes and innovate. Several streams of strategy research have argued that conflict and diversity promote top management team effectiveness. This study proposes that how top management teams manage conflict can greatly contribute to their effective leadership of organizational innovation. A total of 378 executives from 105 organizations in China completed measures of conflict management (cooperative, competitive, and avoiding) and productive conflict (an outcome of conflict). Separately, 105 CEOs from these firms indicated their team's effectiveness and their organization's innovativeness. Results support the theory that conflict management can contribute to making top management teams effective. Structural equation analysis suggests that cooperative conflict management promotes productive conflict and top management team effectiveness that in turn result in organizational innovation. These results, coupled with previous research, were interpreted as suggesting that cooperative conflict management is an important contributor to effective top management teams even in the collectivist culture of China.

A dynamic model of top management team effectiveness: managing unstructured task streams

Leadership research relating top management team (TMT) demographics to firm performance has produced mixed empirical results. This article suggests a new explanation for these inconsistencies. We first note that a given TMT is likely to face a variety of different situations over time. Thus, while TMT demographic composition is relatively stable, the TMT task is dynamic and variable. In some situations, team members have similar information and interests (a symmetric distribution); in others, information or interests diverge (an asymmetric distribution). Based on team effectiveness theory, we argue that, unless group process is managed accordingly, asymmetric distributions of situation-specific information and interests will reduce TMT decision-making effectiveness. We then develop leader process choices to mitigate the potentially harmful effect of these asymmetries. These arguments form the basis of a theoretical model of TMT effectiveness that integrates insights from research on leadership, TMTs, small group process, and negotiation, and has practical implications for how leaders of senior teams can improve team effectiveness through appropriate process choices.

Chief executive leadership style, consensus decision making, and top management team effectiveness

Using data from 79 high technology firms in the US and Ireland this study concludes that leadership style has both direct and indirect relationships with consensus decision making and with the reported effectiveness of top management teams. It focuses on what effective leaders do rather than the individual traits they possess and distinguishes between four styles of leadership: authoritarian (characterized by the use of instruction and non-contingent reprimand), transactional (influence via exchange of valued rewards for services/behaviours), transformational (inspiring followers to do more than originally expected), and laissez faire (avoiding decision making and supervisory responsibility). The transformational style of leadership was significantly and positively related, and the laissez faire style was significantly negatively related to reported team

Problems with top management teams

Records that a capable and effective top management team's CEO may be unprepared for team problems. Gives research details from in‐depth interviews with 23 chief executives based in both the USA and Europe, from a wide range of industries. Postulates that there appeared to be no correlation between size of team and size of organization. Goes on to give problems and answer paragraphs to explain various areas for the executives. Uses an information panel for further discussion.