Top Management Team Composition Research Articles

Triggering absorptive capacity in organizations: CEO succession as a knowledge enabler

PurposeThe purpose of this paper is to introduce CEO succession (and subsequent TMT turnover) as a knowledge enabler. Focusing on absorptive capacity, an important dynamic capability involving the acquisition, assimilation, transformation and exploitation of knowledge, this paper highlights the role of a new CEO in emphasizing specific facets of the knowledge management (KM) process to fulfill expected strategic mandates.Design/methodology/approachThis paper presents a conceptual framework that underscores the importance of CEO succession as a knowledge enabler by depicting its influence on the various dimensions of absorptive capacity. To this end, this paper develops an integrated set of propositions that unpack the influence of different types of CEO successions that trigger and enable different KM processes involved dimensions of absorptive capacity.FindingsThe theoretical framework presented in this paper suggests that given a certain succession context (forced or voluntary turnover of predecessor) different types of CEO succession, combined with possible executive turnover, will constitute a reorientation in top management experience and expertise. This will in turn trigger certain dimensions of absorptive capacity (potential or realized), to fulfill specific strategic mandates such as strategic change or strategic continuity.Research limitations/implicationsThis paper presents a theoretical framework that underscores the importance of studying CEO succession in conjunction with their influence on different knowledge dimensions of absorptive capacity. CEO succession (and subsequent changes in top management team composition) is suggested to be a knowledge enabler. Based on the context of CEO turnover (forced vs voluntary) and the amount of change undergone in TMT composition, different types of CEO succession (based on their origin) are suggested to have different challenges to overcome and different strategic mandates to fulfill. Fulfilling these strategic mandates will require an emphasis on different facets of the KM process, which is encompassed in the dimensions of absorptive capacity. This will, in turn, resolve questions about which knowledge activities the organization needs to invest its resources in and resources allocation decisions may become easier.Practical implicationsBased on their origin, three kinds of CEO succession have been described in this paper – insider-follower, insider-contender and outsider succession. Each of these types of succession encounter different challenges and are expected to fulfill different kinds of strategic mandates. Accordingly, this paper proposes that each kind of CEO succession trigger and enable the knowledge components of absorptive capacity (knowledge acquisition, knowledge assimilation, knowledge transformation and knowledge exploitation) in different manners. This will in turn, allow firms to prioritize the allocation of resources toward different kinds of knowledge activities related to absorptive capacity.Originality/valueThis paper suggests that the CEO succession event, although broadly discussed in management research, has been overlooked when it comes to KM in organizations. Given that strategic leadership is one of the powerful enablers of organizational practices and outcomes, this paper emphasizes that different types of CEO succession may be able to influence the KM process by enabling the different dimensions of absorptive capacity (potential and realized).

Top Management Team Turnover and the Combined Effects of Experience on New Ventures’ Performance

Top management teams (TMT) are the primary source of congenital knowledge for entrepreneurial ventures. As a consequence, changes in TMT composition are likely to alter the types of prior experienc...

Women on Boards, Selection Processes & Dynamics: Pushing Boundaries with New Research Approaches

The under-representation of women on corporate boards (WoCB), a proxy for women in economic decision-making, continues to be a subject of substantive interest to practitioners, policymakers, and academics across the world. The number of academic publications has proliferated since 2008, but with a stalled focus on either regulatory impact or input-output studies trying to link the numbers of women to some level of firm performance. Academics have a role to play in moving the discussion forward, and therefore must work more closely with businesses to develop new approaches to women on corporate board research. This symposium seeks to progress board research by exploring new aspects of and approaches to the fundamental elements of board composition, dynamics, and the ‘black box’ of boardroom behaviour. We present five projects, with 16 academics, ranging from doctoral student to full professor, representing 13 institutions, across six countries. There is one conceptual paper and four empirical papers with methods ranging from the use of surveys, to qualitative comparative analysis, to board observations and time analysis. Three of the papers focus on aspects of composition and director selection, considering intended and unintended consequences; three consider the influencing factors and processes on and of the diverse composition of board and top-management team; two question the distinctions between surface and deep-level diversity, and two mainly consider board dynamics, translating how that composition may ultimately influence board behavior. Two established WoCB discussants will pull together the key findings and suggest new ways forward. Integrating identity into director selection process and structure Presenter: Cynthia E. Clark; Bentley U. Presenter: Patricia Gabaldon; IE Business School Is Corporate Executive Diversity Only Skin Deep? Presenter: Johanne Grosvold; U. of Bath Female Directors in the CEO In-Group and New Female Director Appointments Presenter: Ting Yao; U. of North Carolina, Chapel Hill Presenter: Corinne A. Post; Lehigh U. Presenter: Diana Bilimoria; Case Western Reserve U. Board Gender Diversity and Board Dynamics: What is Going On Inside the Boardroom? Presenter: Claude Francoeur; HEC Montreal Presenter: Caroline Aubé; HEC Montreal Presenter: Samuel Sponem; HEC Montréal Presenter: Michel Séguin; U. du Québec à Montréal Presenter: Faranak Farzaneh; HEC Montréal Behind the Numbers: Boardroom Processes that Increase Womens Participation on Corporate Boards Presenter: Louise Tilbury; U. of Exeter Business School Presenter: Ruth Sealy; U. of Exeter Business School

Exploring Top Management Team Composition in Private Family Firms

Exploring Top Management Team Composition in Private Family Firms

Top Management Team Characteristics and Organizational Virtue Orientation: An Empirical Examination of IPO Firms

ABSTRACT:Despite extensive research on organizational virtue, our understanding about factors that promote virtue within organizations remains unclear. Drawing on upper echelon theory, we examine the relationship between five top management team (TMT) characteristics and organizational virtue orientation (OVO)—the integrated set of values and beliefs that support ethical traits and virtuous behaviors of an organization. Specifically, we utilize prospectuses of initial public offering (IPO) firms and 10-K post-IPO filings to explore how TMT composition with respect to member age, tenure, education, functional background, and gender influences OVO. Additionally, we examine the moderating effects of organizational size, and argue that the more expansive structures and processes associated with larger organizations diminish the main relationships. Our findings, using two sources of data, are consistent, but somewhat mixed in their support for our hypotheses. Overall, TMT characteristics do appear to influence OVO, but in more complex and counterintuitive ways than initially expected.

How does top management team composition matter for continual growth? Reinvestigating Penrose’s growth theory through the lens of upper echelons theory

PurposePenrose’s argument regarding the managerial constraint on continual expansion over two consecutive periods is termed the “Penrose effect,” a relatively less investigated premise in Penrose’s growth theory. The purpose of this paper is to empirically re-examine the Penrose effect from the perspective of upper echelons theory and investigated how top management team (TMT) composition influences the continual growth of a firm.Design/methodology/approachThis study empirically tested the hypotheses based on a sample of listed manufacturing firms operating in Taiwan, a newly industrialized economy in the Asia–Pacific region. Moderated hierarchical regression analyses were applied to test hypotheses.FindingsThe empirical results suggest that low TMT diversity (in terms of educational, functional and team tenure diversity) is likely to engender a situation in which the Penrose effect might occur. Additionally, the results indicate that the proportion of functional executives plays a significant role in influencing the growth trend over two consecutive periods and may soften the impact of the Penrose effect.Practical implicationsThis paper suggests that appropriate structuring of TMTs and appropriate management of their members’ backgrounds and team tenure diversity can help firms overcome the Penrose effect and grow continually. Furthermore, the proportion of functional executives in a TMT is influential.Originality/valueThis paper uniquely contributes to the theoretical and empirical development of Penrose’s growth theory, upper echelons theory and resource-based view concerning managerial resources.

CSR COMPARISON BETWEEN FAMILY BUSINESSES AND NON-FAMILY BUSINESS

This paper is designed to explore whether family businesses outperform nonfamily businesses regarding Corporate Social Responsibility (CSR) performance. Upon comparing the CSR performances of 64 top family businesses in the US with CSR performances of the top nonfamily businesses in the US; the results have showed that nonfamily businesses outperform family businesses on CSR. Analysis of four out of five categories of CSR performance resulted in favor of nonfamily businesses and no statistical difference was found in one category. Hence, results show that family businesses are reluctant to corporate social responsibility concern. The result of this study may suggest that family businesses are self-interested; however, some research literature may advise otherwise. Strong agency problems and having family influence in the top management team composition may be shown as the main reason behind this phenomenon. Also results show that among the family businesses, increased family member presence in the top management has a positive effect on CSR performance. For further analysis and future studies, recommendations are made in the conclusion section.

CSR COMPARISON BETWEEN FAMILY BUSINESSES AND NON-FAMILY BUSINESS

This paper is designed to explore whether family businesses outperform nonfamily businesses regarding Corporate Social Responsibility (CSR) performance. Upon comparing the CSR performances of 64 top family businesses in the US with CSR performances of the top nonfamily businesses in the US; the results have showed that nonfamily businesses outperform family businesses on CSR. Analysis of four out of five categories of CSR performance resulted in favor of nonfamily businesses and no statistical difference was found in one category. Hence, results show that family businesses are reluctant to corporate social responsibility concern. The result of this study may suggest that family businesses are self-interested; however, some research literature may advise otherwise. Strong agency problems and having family influence in the top management team composition may be shown as the main reason behind this phenomenon. Also results show that among the family businesses, increased family member presence in the top management has a positive effect on CSR performance. For further analysis and future studies, recommendations are made in the conclusion section.

Disentangling the antecedents of ambidexterity: Exploration and exploitation

We view ambidexterity as a paradox whereby its components, exploration and exploitation, generate persistent and conflicting demands on an organization. Drawing on the attention based view of the firm (ABV), we examine three antecedents of organizational ambidexterity that reflect ABV’s three principles − the principle of focus of attention; the principle of situated attention; and the principle of structural distribution of attention. Specifically, we examine the influence of top management team (TMT) composition, whether or not the firm has a clear written vision, and the extent to which organizational attention is focused on investments in R&D, and continuous improvement. We empirically validate our model on a sample of 422 small and medium-sized enterprises in the UK and find that ambidexterity is supported by a blend of integration and differentiation approaches.

Understanding Managerial Antecedents of Business Model Innovation

Substantial past research has investigated the effects of top management team composition on strategic change outcomes. In light of the mixed results from these studies, this paper explores the eff...

Exploratory and exploitative innovation in family businesses: the moderating role of the family firm image and family involvement in top management

Drawing on innovation and family business literature, this study examines the largely overlooked family effect in exploratory and exploitative innovation–performance processes via the moderating impact of the family firm image and family involvement in the top management team (TMT). Based on a sample of 91 Spanish small and medium family firms (family SMEs), our results show some interesting findings. First, we find that while family firm image is beneficial to the exploitative innovation–firm performance relationship, it has a negative impact on the exploratory innovation–performance link. Second, we find that different forms of family involvement in the TMT have different effects on the results of exploratory and exploitative innovation processes. A higher proportion of family members in the TMT negatively impacts the positive effect that both exploratory and exploitative innovation have on firm performance. We also find that a higher number of generations involved in the TMT has a positive effect on exploratory innovation–firm performance, but a detrimental effect on exploitative innovation–firm performance. Thus, our study deepens the current understanding of exploratory and exploitative innovation in family SMEs, highlighting previously overlooked effects of family firm image and two forms of family involvement in the TMT on exploration– and exploitation–firm performance relationships. Furthermore, our findings have meaningful managerial implications for the development of an attractive family firm image and an effective TMT composition in order to improve the outcomes of exploratory and exploitative innovation processes.

The Internationalisation of Family Firms: the Role of the Ownership Structure and the Composition of Top Management Team

Objective : The objective of this paper is to investigate the determinants of family firm internationalisation, focusing on the roles of ownership (i.e. concentration of ownership, foreign ownership) and management (i.e. involvement of nonfamily managers, owner-CEO). Research Design & Methods : We test our hypothesis using linear regression models and logistic regression models, based on a sample of 6,957 family firms from seven European countries (Austria, France, Germany, Hungary, Italy, Spain, UK). Findings: The concentration of ownership within the family hinders the propensity to export, but it has no effect on export intensity and export scope. Foreign ownership contributes to firm performance and that the impact of minority foreign ownership is more pronounced than the controlling foreign ownership. The involvement of nonfamily managers enhances internationalisation, and that owner-CEO hinders internationalisation, but only in terms of global exporting. Implications & Recommendations: The inclusion of outsiders (both in terms of ownership and management) enhances family firms’ internationalisation. This finding is particularly relevant to family business planning to expand abroad. We encourage further research investigating the relationships between different dimensions of ‘familiness’ and firm internationalisation, preferably in a multi-country context (e.g. advanced versus emerging economies). Contribution & Value Added: The originality of this work lies in treating family firms as a heterogeneous group and investigating the impact of different dimensions of ’familiness’ (i.e. ownership structure, composition of TMTs) upon an internationalisation strategy.

The Influence of Top Management Team Composition of Venture Capital Reputation for Their Investment Strategies of Industry Diversification

The Influence of Top Management Team Composition of Venture Capital Reputation for Their Investment Strategies of Industry Diversification

Top Management Team Demographic Diversities, Generic Strategy and Firm Performance in Marketing Social Research Association (MSRA) in Kenya

This study investigated the relationship between Top Management Team (TMT) demographic diversities and firm performance using generic strategies as intervening variable in the Marketing and Social Research Association (MSRA) firms in Kenya. First, the relationship between TMT characteristics diversities and generic strategy was analyzed. Second, the link between generic strategy and firm performance was estimated. Mixed methods research design was used to critically investigate the relationship between the latent exogenous and endogenous variables of this study. The mixed research design used in this study was triangulation design, which was mainly transformation design model. The data were analyzed using structural equation modeling analysis, using IBM SPSS AMOS version 21. The study found out that the homogenous demographic diversities among the top management team members had statistically significant effect on cost leadership strategy (p = 0.012). Besides, cost leadership strategy showed a statistically significant positive relationship on firm performance (p = 0.005). The findings of this study implied that organizations need to know and develop the best composition of top management team based on their demographic diversities in relation to the environment. Besides, the organizations need to empower the TMT members using monetary and nonmonetary incentives to further improve performance. Last but not least, the compositions of TMT in marketing research firms need to embrace gender diversity.

Top management team and IPO firms’ acquisition activity

Purpose – The purpose of this paper is to explore the role of the top management team (TMT) in determining whether IPO firms in high-tech industry will engage in acquisitions during the post-IPO period. Design/methodology/approach – The authors collect IPO and TMT data from firm prospectuses, and acquisition and financial data from Securities Data Company Platinum and Compustat, respectively. Poisson regression analysis is applied to test the effect of TMT characteristics on acquisition activity. Findings – Using 135 IPO firms, the authors find evidence that TMT composition directly influences acquisition activity of IPO firms during the post-IPO period. Specifically, the authors find that TMT experience serving as members other firms’ boards and TMT experience in senior level management positions are both positively associated with acquisition activity. TMTs with prior IPO experience and TMTs with longer organizational tenures are negatively associated with acquisition activity. Originality/value – This study is among the first to examine the impact of TMT demography on newly public firms’ acquisition activity. In doing so, it adds meaningfully to the understanding of the factors driving such firms’ strategic behavior.

The Role of Management Control Systems and Top Teams in Implementing Environmental Sustainability Policies

This paper simultaneously examines how the design of management control systems and top management team composition help organizations to implement environmental sustainability policies successfully. It also analyzes the effect of those policies on both short-term and long-term performance. A questionnaire was sent to every member of top management teams in 231 public hospitals in Spain. It obtained 457 useful responses from TMT members, allowing us to collect data on 81 full top management teams (35.06%). The partial least squares statistical technique was used to test the causal research model. It was found that the implementation of environmental sustainability policies has a negative effect on short-term organizational performance and a positive effect on long-term performance. The results show that management control systems and top management team diversity have a complementary effect on implementing policies focused on environmental sustainability. A broad design of management control systems helps organizations adopt sustainability policies to achieve long-term performance. It was also found that top management team diversity mitigates the negative effect of adopting environmental sustainability policies on short-term organizational performance.

The Influence of Top Management Team Characteristics on BPD Performance

Based on ”upper echelons theory”, this paper investigates the relation between top management team composition and BPD performance. For top management team characteristics, we employ age, level of education, background of education, gender, and functional background, while for measured the BPD performance we employ return on asset (ROA), return on equity (ROE), capital adequacy ratio (CAR), net interest margin (NIM), loan to deposit ratio (LDR), non-performing loan (NPL) and operation expenses to operation income (BOPO). The results show that all characteristics have positive significant influences on BPD performance.

The Influence of Top Management Team Characteristics on BPD Performance

Based on upper echelons theory, this paper investigates the relation between top management team composition and BPD performance. For top management team characteristics, we employ age, level of education, background of education, gender, and functional background, while for measured the BPD performance we employ return on asset (ROA), return on equity (ROE), capital adequacy ratio (CAR), net interest margin (NIM), loan to deposit ratio (LDR), non-performing loan (NPL) and operation expenses to operation income (BOPO). The results show that all characteristics have positive significant influences on BPD performance.DOI :https://doi.org/10.21632/irjbs.8.3.155-166Keywords: Top Management Team, BPD Performance, Upper Echelons Theory

A theoretical model of training and its transference: the pivotal role of top management team composition and characteristics

Training is considered an important tool for organizations as they attempt to gain competitive advantages. However, transferring and maintaining the acquired skills and knowledge to the workforce remain problematic. Managerial support is a factor influencing training and its transference. However, the role of top management teams (TMTs) in this process has largely been ignored. This paper posits that the degree to which an organization invests in training initiatives, as well as the percentage of training transference and maintenance, is a function of TMT composition, TMT characteristics, and the degree to which the TMT holds subordinate managers accountable. A model and propositions are advanced in this study.

Exploring the antecedents of firm performance in a Latin-American and European diverse industrial context

PurposeThe purpose of this paper is to determine the top management team (TMT) intangible assets (demographical and managerial experience) diversity which influences firm performance in a diverse industrial context.Design/methodology/approachThe paper analyses 159 whole TMTs from Latin American and European enterprises. The study focuses on three indicators (sales, return on assets and return on sales) as proxies of firm performance. The hypotheses formulated were tested using panel data and applying a random-effects model.FindingsThe paper reveals a large degree of volatility in the findings depending on the type of firm performance indicator. This provides insights regarding the controversy surrounding the black box Upper Echelon Theory and for entrepreneurial purposes concerning the relationship between TMT composition and the achievement of a high level performance.Research limitations/implicationsThis study could be extended by analysing other important variables, such as top mangers’ physiological traits and cultural differences within the TMTs. The analysis could also be applied to a wider geographical area.Practical implicationsThis paper may help enterprises to reach a better understanding of their TMT’s internal complex diversity by providing appropriate insights for a better decision-making process required to achieve an accurate firm outcome.Originality/valueThe paper is an extension on prior studies not only by focusing on a different geographical area different from the traditional USA context but also applying a longitudinal study scarcely applied in the demographic literature. In addition, attributes for all the TMT’s members (not only CEOs), three different proxies of performance and a highly diverse industry context from Latin American and European companies have been considered.