TOP MANAGEMENT TEAM DIVERSITY AND ORGANIZATIONAL PERFORMANCE: A CRITICAL REVIEW OF LITERATURE
Abstract
Organizations aspire to achieve their goals in dynamic and competitive environments. In order for them to do this, they rely on the key people charged with steering them towards corporate success through the strategic decisions that they make. Empirical studies refer to these decision makers as Top Management Teams (TMTs). TMT characteristics have been linked to strategic decisions like diversification and acquisitions that have changed the direction of their firms. However, research differs as to whether TMT diversity affects strategic decisions and hence organizational performance. This has called for further research on TMTs and especially on their performance as influenced by other factors like their structures. Structures provide the necessary systems and processes required for effective strategy implementation. TMTs are structured differently such that in some, members operate autonomously while in others there is high interdependence. When there is high interdependence and diversity, team processes may be affected and consequently firm performance. Despite interdependence receiving scholarly attention, focus in earlier studies was on work groups and not TMTs. Additionally, it was not objectively operationalized. These gaps together with the inconsistent findings on how interdependence relates to performance require attention in upper echelon studies. This study paper provided insights on TMT by answering the question on how it may impact on performance and hence advance theory in TMT studies. Research from this study paper would have implications on policy and practice for managers charged with selection and structuring of TMTs in organizations as it would give an understanding on how TMTs should be structured or designed for effectiveness and better firm performance.
Key Words: Top Management Team Diversity, Organizational Performance
CITATION: Nyaberi, J. P. L. (2021). Top management team diversity and organizational performance: A critical review of literature. The Strategic Journal of Business & Change Management, 8 (3), 1102 – 1108.
Full Text:
PDFReferences
Andrews, K. (1971). The Concept of Corporate Strategy (3rd ed.) Richard D. Irwin Inc.
Awino, Z.B. (2013). An empirical study of top management team diversity and performance in the service industry. Research Journal in Organizational Psychology and Educational Studies, 2(1), 25-31.
Bantel, K., & Jackson, S. (1986). Top management and innovations in banking: Does the composition of the top team make a difference? Strategic Management Journal, 10,107-124.
Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99-120.
Barrick, M.R., Bradley, B.H., Kristof-Brown, A.L., Colbert, A.E. (2007). The moderating role of TMT interdependence: Implications for real teams and working groups. Academy of Management Journal, 50(3), 544-557.
Beersma, B., Hollenbeck, J.R., Humprey, S.E., Moon, H., Conlon, D.E., & Ilgen, D.R. (2003). Cooperation, competition and team performance: Towards a contingency approach. Academy of Management Journal, 46(5), 572-590.
Katzenbach, J.R., & Smith, D.K. (1993). The Wisdom of Teams: Creating the High Performance Organization. Boston, MA: Harvard Business School Press.
Kiggundu, M.N. (1981). Task Interdependence and the theory of job design. Academy of Management Review, 6(3), 499-508.
Miller, D. (1986). Configurations of strategy and structure: Towards a synthesis. Strategic Management Journal, 7(3) 233-249.
Mintzberg, H. (1990). The design school: Reconsidering the basic premises of strategic management. Strategic Management Journal, 11, 171-195.
Murphy,G.B., Trailer, J.W., & Hill, R.C. (1996). Measuring performance in entrepreneurship research. Journal of Business Research, 36(1), 15-23.
Mutuku, C., K’Obonyo, P., Awino, Z.B. (2013), Top management team diversity, quality of decisions and performance of commercial banks in Kenya. Asian Journal of Humanities and Social Sciences, 1(3), 101-113.
Newman, B., Ucbasaran, D., Zhu,F., & Hirst, G. (2014) .Psychological capital : A review and synthesis. Journal of Organizational Behavior, 35,120-138.
Stewart,L.G., & Barrick, M.R (2000). Team structure and performance: Assessing the mediating role of intrateam process and the moderating role of task type. Academy of Management Journal, 43(2), 135-148.
Tihanyi, L., Ellstrand,A.E., Daily, C.M., & Dalton, D.R.(2000) .Composition of the top management team and firm international diversification. Journal of Management, 26(6), 1157-1177.
Van De Vergt, G., Emans, B., & Van De Vliert, E. (2000). Team members affective responses to patterns of intra-group interdependence and job complexity. Journal of Management, 26(4), 633-655.
Venkatraman N., & Ramanujam,V. (1986). Measurement of business performance in strategy research: A comparison of approaches. Academy of Management Review, 1(4), 801-814.
Wageman, R., & Baker, G. (1997). Incentives and cooperation: The joint effects of task and reward interdependence on group performance. Journal of Organizational Behaviour,18 (2), 139-158.
Wageman, R. (1995). Interdependence and group effectiveness. Administrative Science Quarterly, 40(1), 145-180.
Wasike, S.M., Machuki, V., Aosa, E., & Pokhariyal, G. (2015). Top management team characteristics and performance of tea factory companies in Kenya. Journal of Business Management and Economics, 3(10), 21-27.
Wernefelt, B. (1984). A resource based view of the firm. Strategic Management Journal, 5(2), 171-180.
Wiersema, F., & Bantel, K.A. (1992). Top management team demography and corporate strategic change. Academy of Management Journal, 35(1), 91-121.
DOI: http://dx.doi.org/10.61426/sjbcm.v8i3.2127
Refbacks
- There are currently no refbacks.
This work is licensed under a Creative Commons Attribution 3.0 License.
PAST ISSUES:
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.