Academic journal article Administrative Science Quarterly

Top Management Team Demography and Process: The Role of Social Integration and Communication

Academic journal article Administrative Science Quarterly

Top Management Team Demography and Process: The Role of Social Integration and Communication

Article excerpt

1989 "Top management group heterogeneity and firm performance." Strategic Management Journal, Special Issue: 10: 125-141.

Norburn, David, and Sue Birley 1988 "The top management team and corporate performance." Strategic Management Journal, 9: 225-237.

O'Bannon, Douglas P., and Anil K. Gupta 1992 "Utility of heterogeneity versus homogeneity within top management teams: Towards a resolution of the empirical paradox." Paper presented at the Academy of Management Meeting, Las Vegas.

Although some researchers have argued that leaders and top management teams have little impact on organizational outcomes (Lieberson and O'Connor, 1972; Aldrich, 1979; Astley and Van de Ven, 1983), the emerging view from more recent research suggests otherwise (Romanelli and Tushman, 1986; Finkelstein and Hambrick, 1990). Finkelstein and Hambrick (1990: 500) found that in high-discretion industries, such as computers, for example, managers seem to "matter greatly." This recent stream of research has been facilitated by Hambrick and Mason's (1984) upper-echelons theory, which was inspired by Cyert and March's (1963) concept of the dominant coalition. According to Hambrick and Mason's upper-echelons theory, upper-level managers have an important impact on organizational outcomes because of the decisions they are empowered to make for the organization. Since these managers make decisions consistent with their cognitive base, which is in part a function of their personal values and experiences, their personal experiences and values can be linked to organizational outcomes. Based on this upper-echelons logic, scholars have linked top management teams to organizational innovation (Bantel and Jackson, 1989; O'Reilly and Flatt, 1989), strategy (Finkelstein and Hambrick, 1990; Michel and Hambrick, 1992), strategic change (Grimm and Smith, 1991; Wiersema and Bantel, 1992), and performance (O'Reilly and Flatt, 1989; Michel and Hambrick, 1992; Hambrick and D'Aveni, 1992). The three main clusters of concepts that are of interest in upper-echelons research are the team's demography and process and organizational performance. Demography refers to the aggregated external characteristics of the team, such as heterogeneity, tenure, and size, while process concerns the team's actions and behaviors, such as communication, and psychological dimensions, such as social integration.

Pfeffer (1983: 348) argued that "demography is an important, causal variable that affects a number of intervening variables and processes and, through them, a number of organizational outcomes." Hambrick and Mason (1984) contended that a manager's personal experiences and values can be inferred from observable demographic characteristics, such as years of experience, and that studying these observable characteristics overcomes the difficult problem of gaining access to executives to measure psychological or group dynamic variables, which may be the more direct underlying process characteristics linking the top management team's attributes to organizational outcomes. Following Hambrick and Mason (1984), scholars have empirically linked the top management team's demography to organizational performance (Murray, 1989; Eisenhardt and Schoonhoven, 1990; Michel and Hambrick, 1992), but no specific effort has been made to investigate the more fundamental intervening processes. If upper-echelons theory is to become useful in improving our understanding of top management teams, we need to elaborate and fully understand how team demography influences the organization.

While no empirical studies have directly investigated the process through which the top management team's demography influences organizational outcomes, several social-psychological explanations for the linkages have been proposed. Michel and Hambrick (1992) used the concept of social integration to explain links between average team tenure and diversification strategy and performance. They proposed that the length of team tenure is a proxy for the level of team cohesion and that cohesion in turn affects performance. …

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