Top Management Team Performance Research Articles

A study on the relationship between compensation gap within the top management team and corporate performance: An empirical research based on the moderation effect of fairness preference.

This study explores the relationship between the compensation gap within the top management team (TMT) and corporate performance. We focus on how the fairness preference of the TMT moderates this relationship. The existing researches on the relationship between the compensation gap within the TMT and corporate performance are inconclusive. The reason may be that the traditional tournament theory is based on the hypothesis of self-interest preference of homo economicus. In the research, the fairness preference theory is added to the traditional tournament model, and a more realistic tournament model considering fairness preference is constructed. Based on the analysis of the theoretical model and the empirical regression analysis of the panel data of 733 non-financial A-share listed companies in Shanghai and Shenzhen stock markets from 2014 to 2020, we draw the following main conclusions: (1) There is an inverted U-shaped relationship between the TMT compensation gap and the corporate performance. Within the optimal compensation gap, there is a significant positive correlation. The larger the compensation gap, the better the corporate performance will be. When the optimal compensation gap is exceeded, there is a significant negative correlation. The larger the compensation gap, the worse the corporate performance will be. (2) The fairness preference of the TMT will weaken the correlation between the TMT compensation gap and corporate performance. Within the optimal compensation gap, the fairness preference will weaken the positive relationship between them, and when it exceeds the optimal compensation gap, the fairness preference will also weaken the negative relationship between them.

CEO performance management behaviors’ influence on TMT flourishing, job attitudes, and firm performance

Does a chief executive officer’s (CEO’s) ability to manage and motivate their direct reports impact firm financial performance? Good or bad, CEO leadership research is increasingly romanticized, leading to investigations of CEO traits as visionary and transformational behaviors at the expense of understanding whether the mundane, everyday management of a top management team (TMT) is important for firm performance. In this article, we developed and tested a model linking CEO performance management behaviors and firm performance through two mediating mechanisms. We hypothesized and found a positive relationship between CEO performance management behaviors and TMT flourishing. TMT flourishing related to TMT overall job attitudes and subsequently firm performance. Additionally, performance management behaviors were related to TMT overall job attitudes via TMT flourishing and performance management behaviors related to firm performance via TMT flourishing and job attitudes. Our analyses were based on a unique sample of 105 CEOs and 519 TMT members (60% response rate for CEOs and 90% response rate for TMT members). These findings provide important research directions for CEO research, performance management, upper echelons, and positive psychology research, highlighting the importance of CEO managerially oriented behaviors to create more optimally functioning environments for the TMT and organization.

A Summary of the Research on the Top Management Team of Colleges and Universities

<span lang="EN-GB">The current academic research on top management teams (TMT) focuses on the characteristics of TMT, the relationship between TMT and organizational performance, and the relationship between TMT organizational strategy and organizational performance. The research on TMT in colleges and universities mainly focuses on the principal responsibility system under the leadership of the Party committee. As a </span><span lang="EN-US">team </span><span lang="EN-GB">that formulates development strategies, conduct</span><span lang="EN-US">ing</span><span lang="EN-GB"> performance management</span><span lang="EN-US"> and </span><span lang="EN-GB">stakeholder management, involving</span><span lang="EN-GB">top talent evaluation, and other issues management, standing</span><span lang="EN-GB">in a forward-looking position. Team operation plays an important role in performance improvement. The top management team is important for colleges and universities. The growth of the </span><span lang="EN-US">team </span><span lang="EN-GB">plays a positive role.</span>

Bridging the Female Gap at the Top: Implications for Firms’ Strategic Behavior and Performance

A large literate has examined whether female representation in Top Management Teams (TMT) positively affects firm performance. These studies provide evidence of a performance advantage, however, evidence is rare when it comes to the question why this advantage occurs. We analyze how four intervening mechanisms - namely strategic conformity, risk taking, CSR and governance - influence the relation between female representation at TMT and firm performance. We test our theoretical predictions using data on the TMT of the S&P 1,500. We find robust mediating effects of conformity, risk taking and CSR: Female representation at TMT leads to less conformity, less risk taking and more CSR engagement. Performance effects are mixed.

Who pays the penalty? Implications of gender pay disparities within top management teams for firm performance

AbstractDespite the expected advantages of appointing women to corporate leadership roles, empirical evidence provides mixed support for the positive relationship between women's representation in the top management team (TMT) and subsequent firm performance. Considering the evidence that female TMT members are often paid less than their male colleagues, this study examines the implications of a gender pay disparity for the relationship between women's representation in the TMT and firm performance. Our analysis that draws on TMT pay data in public Australian firms demonstrates that gender pay disparities within TMTs negatively moderate the relationship between women's representation in the TMT and subsequent firm performance. Specifically, when female TMT members are paid less than their male colleagues, and this gender pay disparity is large, women's representation in the TMT is negatively associated with firm performance.

CEO transformational leadership and top management team performance: study from GCC

Purpose Various research studies have been carried out to study Chief Executive Officers’ (CEOs’) transformational leadership in driving organizational performance and success. Evidence shows that few studies were carried out on CEO transformational leadership and top management team (TMT) performance in Gulf Cooperation Council (GCC) region. Thus, this study aims to provide a unique contribution and the first of its kind to examine the CEO leadership–TMT performance link across GCC countries. Design/methodology/approach In this study, the researchers approached 500 employees and 30 CEOs working in 30 different organizations operating in the GCC countries. The firms were selected conveniently from different industries located in the UAE, Saudi Arabia, Kuwait, Oman and Bahrain. The researchers used the PASW (SPSS) program to analyze the data. Findings The findings show that psychological empowerment has no significant role in moderating the transformational leadership – TMT performance relationship. Internal support for innovation plays a significant role in mediating the relationship between transformational leadership and TMT performance. Research limitations/implications The present study has not examined the behavioral aspects of CEO followers. Future research may study behavioral characteristics of the entire TMT. Originality/value This study contributes to body of research that identifies CEO transactional leadership as perceived by the followers was found to be more important in predicting TMT performance than transformational leadership in the context of organizations located in GCC countries. Managerial implications and future research areas are further discussed.

Chief executive officer participative leadership and the performance of new venture teams

In this article, we examine the mediating role played by affective and cognitive trust in chief executive officer (CEO) and intra-group trust, on the relationship between CEO participative leadership and the performance of the top management team (TMT) and its members within entrepreneurial new ventures. Drawing on four waves of multilevel, multi-source data, our study extends social exchange theory by teasing out the trust-based social exchange mechanisms linking CEO participative leadership to performance outcomes. Specifically, the data analysis revealed that intra-group trust mediated the relationship between CEO participative leadership and TMT performance, while affective trust mediated the relationship between CEO participative leadership and performance of TMT members. However, cognitive trust did not mediate this relationship. This suggests that it is important for CEOs of new ventures to use participative leadership to create strong levels of affective trust with TMT members and intra-group trust within the TMT.

Top Management Team Tenure Diversity and Performance: The Moderating Role of Behavioral Integration

Integrating insights from organizational information processing theory and social categorization theory, we examine how top management team (TMT) tenure diversity affects team performance. We propose a theoretical framework that examines how these two conflicting processes occur simultaneously within diverse TMTs by arguing that TMT tenure variety influences information processing while TMT tenure separation influences the social categorization process. We argue for the presence of nonlinear relationships between tenure variety, tenure separation, and team performance. Furthermore, we propose that these relationships are moderated by the level of TMT behavioral integration. Based on a sample of 357 senior managers from 126 firms in China, we find that both TMT tenure variety and TMT tenure separation have opposing and nonlinear relationships with TMT performance, and the relationship between TMT tenure separation and TMT performance is moderated by the level of TMT behavioral integration. Our results help clarify the conflicting conclusions of previous TMT tenure diversity research. Our findings suggest that the effect of diversity depends on the type of diversity as they affect different processes. Our findings also explain how the opposing effects of both information processing and social categorization can occur simultaneously in the TMT. Furthermore, the effects of both processes are not linear while the level of diversity variety and diversity separation can affect the marginal effects. Finally, TMT behavioral integration processes affect how tenure diversity plays its role in team performance.

The boundary conditions of gender diversity in top teams

PurposeIn this study, the authors aim to extend previous research and examine the phenomenon of gender diversity on firm performance in the context that of community-based enterprises (CBEs). The study builds on gender role theory and analyzes three factors that affect the relationship between gender diversity and firm performance: the overall percentage of women in the business, the level of participative decision-making and top management team (TMT) compensation.Design/methodology/approachData for this study were obtained from the Solidarity Economy Enterprise Database. The Brazilian Government created the database to gather information regarding the status of the Solidarity Economy in the country.FindingsThe authors argue and find support for the idea that gender diversity in TMT positively influences firm performance. However, there is a point where higher presence of women in the business starts to be detrimental for firm performance. That is, the authors find that there is a curvilinear relationship between gender diversity in TMT and firm performance. Moreover, they found strong empirical evidence for the influence of compensation in strengthening the effect of gender diversity on firm performance.Research limitations/implicationsThe great potential that this study offers applied to the CBEs relies on the fact that these businesses are naturally oriented toward equality, so understanding how the unbalance in gender diversity may affect the firm performance could help us to understand if there is a disconnection between the theory and the practice in terms of how women are positioned.Practical implicationsThe paper has important implications for corporate boards and policy-makers, suggesting the importance of increasing the number of women in boards of directors to benefit from the diversity in value, perspectives, background and skills they bring to TMTs. This study focuses on an under-researched context in terms of TMTs – CBEs.Social implicationsThis work shows that gender diversity in top on boards of CBE’s is positive which is aligned to the orientation toward equality that these businesses have. However, at the same time even although having more women is positive for financial performance, there is a saturation point from when the influences starts to be detrimental.Originality/valueThe authors consider that this study raises areas for further consideration in efforts to understand what are the boundary conditions of gender diversity in top teams.

The Role of Conflicts in Top Management Teams

Purpose: The purpose of this paper is to find out the role of conflicts and conflict management in Top Management Teams (TMTs). Design/Methodology/Approach: Based on the secondary research and literature review a conceptual model for conflict management in TMTs is proposed. 66 reasons for conflicts and 55 conflict resolution techniques are identified for TMTs from literature review. They are ranked based on reference count in the literature. TMT processes interaction is shown pictorially. Findings: Top 5 reasons for conflicts in TMTs identified are value differences, resources, attitudes, structures and trust. Top 6 conflict resolution techniques identified in TMTs are avoidance, compromise, withdrawal, collaboration, confrontation and integration. Research Limitations/Implications: Further empirical research can be done based on the identified top reasons for conflicts and conflict resolution techniques. Also impact of countries and culture can be further be researched. Practical and Social Implications: Based on the findings executive teams can manage the conflicts effectively in organizations. This research is useful for the society in proper management of organizations. Originality/Value: The main contributions of this work are the conceptual model of conflict management in TMTs, TMT processes interaction diagram, top 5 reasons for conflicts in TMTs, top 6 conflict resolution techniques in TMTs, managing conflicts in TMTs and the factors impacting TMT performance.

CEO transformational leadership and firm performance: A moderated mediation model of TMT trust climate and environmental dynamism

This study examines the role of top management team (TMT) trust climate in the relationship between CEO transformational leadership (TFL) and firm performance under dynamic environments. The research results based on a sample collected from firms in Vietnam show that TMT trust climate is a key mediator which can convert CEO TFL into better performance outcomes. Moderated-mediation analyses further reveal that the mediating effect of TMT trust climate is more significant in less dynamic environments. Our study contributes to the TFL theory by identifying a critical mechanism that intervenes in the relationship between CEO-level TFL and firm performance. We reveal how CEOs exert leadership influence on subsequent TMT dynamics and performance outcomes by navigating external environments. Moreover, our study offers insights with regard to the trust theory by uncovering TMT-level intragroup trust as a mediator, and thus complements most of prior examinations that focus on the moderating role of trust in workplace team contexts.

It Depends: Environmental Context and the Effects of Faultlines on Top Management Team Performance

Informational faultlines, the alignment of team member task-related attributes to form subgroups, are important in explaining team performance. Although informational faultlines may promote specialization and division of labor, they may also increase communication and coordination costs. Integrating work on the categorization-elaboration model, social identity theory, and contingency theory, we posit that facets of a team’s external environment moderate the effects of informational faultlines on performance. Using a sample of 380 top management teams, we examine moderation effects of environmental dynamism, complexity, and munificence. We find that informational faultline strength positively affects firm performance under low environmental dynamism, high complexity, and high munificence, but it negatively affects firm performance under high environmental dynamism, low complexity, and low munificence. We discuss the implications of our findings for theory and practice.

English

The relationship between enterprise culture and enterprise performance and the relationship between top management team (TMT) and enterprise performance have been the hot topics which academy and business circles focused on since Pettigrew put forward the "organizational culture"; Hambrick and Mason proposed the "upper echelons theory". However, previous studies on the relationship between enterprise culture and enterprise performance and the relationship between TMT and enterprise performance were carried out according to two parallel lines, with almost no crossover studies on them. This paper will combine both of them together organically in order to study respectively the relationship between enterprise culture and enterprise performance, the relationship between TMT interaction and enterprise performance as well as the relationship between TMT interaction and enterprise culture and then put forward the research theoretical frameworks on the basis of reviewing previous studies on the enterprise culture, TMT and enterprise performance. Finally, the effect of TMT interaction on enterprise performance from the perspective of enterprises culture will be studied.   Key words: Enterprise culture, top management team (TMT), team interaction, enterprise performance. &nbsp

A study of network-building HR practices for TMT, strategic flexibility and firm performance

Purpose– The purpose of this study is to introduce strategic flexibility as an important dynamic capability into the field of strategic human resource management (SHRM) and explore its mediating role between network-building HR practices for top management team (TMT) and firm performance. Moreover, based on the context of transition economy in China, the authors examine environmental uncertainty as a moderator in these relationships and empirically test the questions above.Design/methodology/approach– The authors have conducted questionnaire surveys on 780 top managers in 390 companies mainly located in Beijing, Tianjin, Shanghai, Jiangsu and Zhejiang and finally received 241 valid samples.Findings– The results show that network-building HR practices have positive effects on firm performance and strategic flexibility plays a fully mediating role between them. In addition, environmental uncertainty moderates the relationship between network-building HR practices for TMT and strategic flexibility, while it has no moderating effect in the relationship between strategic flexibility and firm performance.Originality/value– These conclusions have important implications for the development and application of SHRM in dynamic environments. Theoretically, the authors enrich the functions of network-building HR practices for TMT and provide the evidence to advocate the development of the innovative HR practices in China. In terms of the practical implications of the study, it is argued that network-building HR practices for TMT and strategic flexibility can help firms to deal with uncertainty and achieve high performance, which provides constructive guidance in the development of enterprises in the China's transition economy.

TMT Tenure Diversity and Its Performance: The Moderating Role of Behavioral Integration

Previous research has an inconclusive conclusion on the effect of top management team (TMT) diversity on TMT performance. Integrating insights from organizational information processing theory and social identity and self categorization theory, we start by investigating tenure diversity, among different types of TMT diversity. We argue that different dimensions of tenure diversity (i.e., tenure variety and tenure separation) have divergent influences on TMT performance. Based on data provided by 261 senior managers from 110 enterprises in China, we find that (1) TMT tenure variety positively affects TMT performance. (2) TMT tenure separation negatively affects TMT performance. (3) The level of behavioral integration positively moderates the relationship between TMT tenure variety and TMT performance. Our empirical findings provide substantial support to our arguments and thus this research offers both theoretical and practical implications.

Top Management Team Diversity

Empirical research investigating the impact of top management team (TMT) diversity on executives’ decision making has produced inconclusive results. To synthesize and aggregate the results on the diversity-performance link, a meta-regression analysis (MRA) is conducted. It integrates more than 200 estimates from 53 empirical studies investigating TMT diversity and its impact on the quality of executives’ decision making as reflected in corporate performance. The analysis contributes to the literature by theoretically discussing and empirically examining the effects of TMT diversity on corporate performance. Our results do not show a link between TMT diversity and performance but provide evidence for publication bias. Thus, the findings raise doubts on the impact of TMT diversity on performance.

Organizational Tenure Diversity as Predictors of Combat Performance in ROK Army

Drawing on the upper-echelons theory and diversity issues, this study examines the relationships between top management team (TMT) organizational tenure, tenure diversity, and combat performance. The study is based on of Korea Combat Training Center (KCTC) that is designed for training and evaluation of the battalion combat power. Findings indicate that battalions with higher levels of TMT tenure have a positive effect on combat performance. Tenure diversity of TMT has a negative effect on combat performance. In addition, results showed that the negative relationships between tenure diversity of TMT and combat performance are attenuated by commander’s shared experience with other TMT members.

Innovation in top management teams: Minority dissent, transformational leadership, and radical innovations

Research among lower level teams suggests that minority dissent stimulates team innovation. We consider the role of CEO transformational leadership in the dissent–innovation relation and study this in Top Management Teams (TMTs). We propose that transformational leaders create a psychologically safe team climate, in which dissenting opinions are used effectively to create radical innovations. Members of 36 TMTs (N = 196) completed a questionnaire to assess minority dissent, transformational leadership, and participative safety. CEOs provided data about the innovations implemented by the team. Results showed that minority dissent was positively related to the number of innovations implemented by TMTs. However, only under high levels of transformational leadership were these innovations radical. It was further found that transformational leadership had this effect because it was positively associated with participative safety. These results indicate that minorities stimulate innovativeness and that through transformational leadership CEOs can create a climate in which minority input is transformed into radical innovations. Implications for TMT performance and team innovation are discussed.

Diversity faultlines, shared objectives, and top management team performance

Faultline theory suggests that negative effects of team diversity are better understood by considering the influence of different dimensions of diversity in conjunction, rather than for each dimension separately. We develop and extend the social categorization analysis that lies at the heart of faultline theory to identify a factor that attenuates the negative influence of faultlines: the extent to which the team has shared objectives. The hypothesized moderating role of shared objectives received support in a study of faultlines formed by differences in gender, tenure, and functional background in 42 top management teams. The focus on top management teams has the additional benefit of providing the first test of the relationship between diversity faultlines and objective indicators of organizational performance. We discuss how these findings, and the innovative way in which we operationalized faultlines, extend faultline theory and research as well as offer guidelines to manage diversity faultlines.

최고경영자 팀이 의료기관의 성과에 미치는 영향

This study empirically analyzed the effects of the Top Management Team (TMT) on organizational performance. We verified whether the age heterogeneity, job heterogeneity (core career, core function and major), and process (communication and integration) of the TMT affect organizational performance (management performance and healthcare service quality evaluation level). We collected data about 473 members of the 2006 TMT in 81 medical institutions. We also utilized statistics of organizational performance from the Ministry for Health, Welfare and Family Affairs and the Korean Institute of Hospital Management. Results of the study showed that the age heterogeneity of TMT exerted a negative effect on the healthcare service quality evaluation level, while the process exerted a positive effect. However, the age heterogeneity, job heterogeneity, and process had no influence on management performance. We discussed the implications of such outcome of the investigation in comparison with the former studies on TMT and organizational performance, and presented its restrictions and future plans.