Top Management Teams

Prior research indicates that the relationship between top management team (TMT) faultlines and firm performance is equivocal. We shed new light on this topic by highlighting the moderating role of the CEO–TMT interface. Analyzing data from large international firms over the period 2005–2009 (347 firm-year combinations), we find that the performance effect of knowledge-based TMT faultlines is significantly altered when the leader of the TMT (i.e., the CEO): (a) socio-demographically resembles incumbent executives, (b) possesses a diverse career background, and (c) shares common socialization experience with other TMT members. Overall, our research reveals that different dimensions of the CEO-TMT interface play a pivotal role in determining the performance effects of knowledge-based TMT subgroups. Implications for upper echelons theory, team diversity, and strategic leadership research are discussed.

While the strategic leadership literature has examined relationships between top management team characteristics and various types of outcomes, there has been relatively little research on the ways in which these teams' members dynamically interact. In an attempt to shed light on this aspect, we conducted an exploratory study of the dynamics in two top management teams. We focused on interactions between team members and on their interrelationships during decision-making processes. Our study led us to identify five forms of microdynamics, which we labeled the constellation, the bridge, the triangle, the umbrella and the island. We present each of these microdynamics and discuss their consequences for the team's functioning and for behavioral integration, drawing on our own data, and on examples from other texts (published cases and book chapters, the popular press). Our findings show how each of these microdynamics influences the team's collective processes and how they may interact with each other to produce greater or lesser degrees of behavioral integration within the team. The bridge microdynamic emerges as particularly important in generating greater behavioral integration. Because these microdynamics can yield positive and negative consequences, the way they are managed can play a role in effectively mobilizing team diversity while avoiding counterproductive and detrimental situations. Introduction Teamwork poses various challenges. These challenges are heightened in top management teams whose purpose is to accomplish strategic work. Their functioning, decision-making processes, and actions are often complex and have consequences for a whole organization. The high stakes associated with their activities often make their work very challenging as well as stressful. At the same time, top management teams like other groups are social systems. While the individuals in the team may have formal positions that establish expectations of exactly what they will do and how they will work and with whom, natural affinities, personal preferences, relationship histories, knowledge bases and career rivalries also influence how they interact with their colleagues. The particular mix of people around the table makes a difference. Over time, a team may tend to develop idiosyncratic and repetitive interaction patterns that can become quite ingrained and affect patterns of decision making. For example, some top management teams are said to have an " inner circle " where the " real decisions " are made, leaving other team members on the sidelines (Roberto, 2003). Other teams may be traversed by ongoing tensions between certain executives, perhaps stimulated by succession horse races or factional differences (Li and Hambrick, 2005). Sometimes, particular individuals in the team seem to always end up on the wrong side of every debate. Other individuals always seem to be smoothing things over. Sometimes, the team may include people in explicit or implicit mentor-protégé relationships that could affect how both parties behave and are treated by others in the team (Collins and Clark, 2003). In the study presented here, our research question was as follows: How do the members of top management teams (TMTs) actually interact as they go about the work of guiding the organisation and making decisions together? Upper echelons theo-rists have argued that the diverse viewpoints held by TMT members provide the requisite variety (Ashby, 1956) and range of decision-relevant information that can lead to higher performance (Simons et al., 1999). However, a diverse TMT may be necessary but not sufficient: the rich pool of information that exists as a potential within the TMT must be surfaced, shared and processed (Kauer et al., 2007). How does this happen? What explains whether or not it occurs? Based on our findings, we argue in this paper that interactions between TMT members — or, as we shall call them, microdynamics — represent important, but often neglected processes in top management teams. These microdynamics are made up of the interactions, relations and interpersonal processes that occur as a TMT goes about its work. As their name

The process of strategic management, represent the basic focus of study of the strategic management discipline. However, there are different opinions about the ways and approaches of theoretical organization of the process of strategic management. Different approaches imply differences in the perceiving, behavior, decisions and principles resulting in the fact that the same subject matter of research is seen in so many different ways that it are questionable whether it is the same subject matter. In an abundance of different professional and scientific suggestions and examples the schools of strategic management represent a try to synthesize these ideas and thoughts by grouping similar and related approaches into the same school of strategic management. The Environmental school of strategic management believes that it is not the subject which forms the process, but the forces which force it to choose a specific form of the process of strategic management. Most generally speaking, this school believes that it is the environment and its conditions that dictate when, how, who and in what manner will the strategic management formed, implemented and controlled. Within the school, the Power school imposes itself by openly talking about the influences of interest groups and their power to redirect certain decisions from clearly economic principles when dominated by power. The Cultural school of strategic management believes that the source of differences, misunderstandings and debates lies in the systems of values, norms and behavior which we have inherited from our families, the environment we grew in and in which we do business and in the region that has specific cultural and traditional attitudes and lines of thought. On the sample of middle and large companies in Primorsko-goranska County we studied the influence of the Environmental school of strategic management. The research was conducted on the basis of theoretical construct of the Environmental school of strategic management. The questionnaire covered the mentioned statements and general data on questioned companies. The measuring characteristics of the questionnaire showed that the questionnaire is reliable and valid. From the analysis of the construct of the Environmental school of strategic management we may conclude that the stress is on the conscious key need to adapt which springs from very general social sources. This adjustment does not come from the anticipations and planning in advance, but from reacting to already existing changes in the environment. The companies may recognize the indications for change, however not all react until this change takes place in their nearest environment. The companies believe that changes are not determined by others but result from the (mis)opportunities within the society. The concrete elements of the environment that have a great influence are such as mentality and the cultural milieu, whereas politics and social pressures enter the sphere of business decision making. Top managers within the companies sense their importance, but do not have a feeling of strength while influencing the conditions of doing business or changes in the market demands. The empirical research established the difference in the perception of the process of strategic among differently positioned managers. Namely, the higher positioned managers are acquainted with the wider environment, they get their information from informal sources on the basis of which they find that the strategic choice for the company is very limited. On the other side, the lower positioned managers see possibilities, more room for maneuver for strategic choice, believing that changes for the better are possible and they believe that the influence of the Environmental school is far less important in relations to the ranking of top executives. The way managers think about the process of strategic management directly reflects itself on the way they manage their companies and the way they adjust to the competitiveness in Europe.

A burgeoning stream of sustainability research explores the role of companies' top management team (TMT) characteristics in corporate sustainability efforts, while another stream investigates the effect of a company's supply chain position on its likelihood of engaging in sustainability. This study shows the importance of integrating the two research streams by demonstrating that supply chain position moderates the relationship between TMT characteristics and sustainability and thus establishes boundary conditions for this relationship. By matching 758 corporate sustainability initiatives with control observations, our results show that the size of the top executive team and the average age of its members, two well-known predictors of corporate sustainability, are distinctly moderated by supply chain position. While business-to-business (B2B) companies are less likely to report a sustainability initiative compared to business-to-consumer (B2C) organizations, we found that B2B TMT size has a greater positive effect on sustainability initiative likelihood than B2C TMT size. Conversely, average B2C TMT age has greater predictive power in explaining sustainability initiative likelihood than average B2B TMT age. The implications of these findings in advancing corporate sustainability and organizational change are discussed.

Organizational scholars have highlighted the importance of interpretive ambivalence for mindful-ness, creativity, and strategic change. Ambivalence occurs when an issue is seen simultaneously as positive and negative. We examine organizational factors that influence the propensity of organizational leaders to evaluate a new strategic issue ambivalently. Data come from a survey of 220 German CEOs confronted with the enlargement of the European Union. We find that CEOs of firms with a more ambidextrous strategic orientation and a moderate sense of organizational control over their environment are most likely to be ambivalent about this issue. Our findings affirm the prevalence of interpretive ambivalence at the executive level and suggest ways for organizations to promote or prevent ambivalence in strategic sensemaking.

Top management teams (TMTs) that work (not so) well together enhance (restrict) the ability of the firm to leverage capabilities, which affects outcomes such as innovation. Although internal team dynamics at this level have notable effects on the firm, much remains to be understood about how these effects occur. Therefore, we investigate TMT conflict (cognitive and affective) to understand how the firm-level knowledge capability of absorptive capacity (ACAP) is altered as a result of such types of conflict. Further, given that strategic orientations offer guiding principles for organisational behaviours, we suggest that the main effects of conflict are augmented by strategic orientations. Specifically, both entrepreneurial orientation and market orientation are posited to affect the relationship between conflict and ACAP, which expands understanding of the conditions in which TMT conflict affects ACAP. In all, a conceptual framework is developed to offer insight into how TMT conflict affects firm-level ACAP, highlighting differences that are

La influencia de la gerencia en el desempeño de la firma ha sido un tema debatido en el campo de la estrategia. Este
artículo se inspira en dos preguntas que han estado presentes a lo largo de la historia de este campo: ¿influye la gerencia
en el comportamiento y desempeño de la organización?¿esta influencia se da de manera individual o colectiva?
Con el propósito de dar respuesta a estas preguntas, se hace una revisión de los autores y textos considerados relevantes
en el tema de gerencia. En un primer momento, se explica la evolución que el tema de la gerencia ha tenido en
el campo de la estrategia. Luego se destacan las perspectivas que niegan o minimizan la influencia de la gerencia y,
posteriormente, se contrastan las perspectivas de la gerencia como una práctica individual o colectiva. Finalmente, se
ahonda un poco más en las perspectivas de la alta dirección (upper echelons) y en las lógicas dominantes. Este texto
contribuye a fortalecer teóricamente el aprendizaje de conceptos sobre gerencia en relación con la estrategia; y promueve
la investigación sobre la gerencia en distintos contextos.

This paper aims to introduce the concept of top management team (TMT) regulatory focus to explain the differences in executive motivation. Upper echelons research has demonstrated that top managers’ willingness to deviate from their current strategies is a key determinant of organizational success. However, it is not clear why some TMTs are motivated to embrace strategic change while others are motivated to favor the strategic status quo. Recent work in the psychology of motivation is used to develop a conceptual model explaining how the regulatory focus of TMTs can impact their outlooks toward strategic change. It is theorized that there is a positive (negative) relationship between promotion (prevention)-focused TMTs and strategic change. It is also theorized that executives’ performance aspirations, firm maturity and the stability of the environment will influence the relationship between regulatory focus and strategic change. Although the theoretical explanations provided by past research on top manager motivation are psychological in their general focus, with few exceptions research has not sought to understand the specific deep-level, socio-cognitive characteristics that shape executives’ perceptions of strategic change. By developing an understanding of the psychological determinants of strategic change, as well as the interplay between these determinants and firm- and environment-level factors, this paper represents a step in the direction of explaining why some TMTs are motivated to embrace strategic change while others seem “locked-in” to the status quo.

Despite the abundant opportunities in the Indonesian bank industry, the digital era began to challenge banks to fully embrace the use of technology (information) to prolong competitive advantage. An organization becomes a reflection of its top managers. In facing such challenges, Top Management Team (TMT) members' initiative to overcome the current status quo, will be reflected in the company under their management. For this reason, an effective TMT structure is mandatory during the digital era to digitalize banking firms. This research investigates the relationship between top management team characteristics and Indonesian banks' financial performance during the digital era. For top management team characteristics, this research includes functional background, gender diversity, average age, level of education, IT Expertise, and experience in years. While to measure the performance of Indonesian banks' financial performance the paper includes return on asset (ROA), capital adequacy ratio (CAR), and non-performing loan (NPL). The results show that gender diversity has positive significant influences on NPL, average age have positive significant influences on ROA, CAR, NPL, and IT expertise have positive significant influences on CAR. Abstrak: Meskipun terdapat banyak peluang di industri perbankan Indonesia, era digital mulai menantang bank untuk sepenuhnya merangkul penggunaan teknologi (informasi) dengan tujuan untuk memperpanjang keunggulan kompetitif. Suatu organisasi menjadi cerminan dari para manajer puncaknya. Dalam menghadapi tantangan seperti itu, inisiatif anggota Tim Manajemen Teratas (TMT) untuk mengatasi status quo saat ini, akan tercermin pada perusahaan di bawah manajemen mereka. Untuk alasan ini, struktur TMT yang efektif adalah wajib selama era digital untuk mendigitalkan perusahaan perbankan. Makalah ini menyelidiki hubungan antara karakteristik tim manajemen teratas dan kinerja keuangan bank-bank di Indonesia selama era digital. Untuk karakteristik tim manajemen teratas, penelitian ini mencakup latar belakang fungsional, keragaman jenis kelamin, usia rata-rata, tingkat pendidikan, keahlian di bidang Tekonologi Informasi (TI), dan pengalaman dalam tahun. Sementara untuk mengukur kinerja keuangan bank-bank di Indonesia, makalah ini mencakup pengembalian atas aset (ROA), modal rasio kecukupan (CAR), dan kredit bermasalah (NPL). Hasil penelitian menunjukkan bahwa keragaman gender memiliki pengaruh signifikan positif pada NPL, usia rata-rata memiliki pengaruh signifikan positif terhadap ROA, CAR, NPL, dan keahlian IT memiliki pengaruh signifikan positif terhadap CAR.