Top Management Team Diversity and Company Performance: The moderating effect of Organization Life Cycle

Emil Velinov, Milan Malý

Abstract


The research paper examines the moderating impact of Organizational Life Cycle on the relationship between Top Management Team Diversity and Company Performance. The study first elaborates and establishes the theoretical link between organization lifecycle and composition of management elites. Second, a quantitative empirical study is conducted to test the OLC stages moderating impact on the upper echelons diversity and firm performance of the top companies in the Czech Republic.

A detailed procedure is developed to accurately classify organizations at different lifecycle stages, drawing extensively on existing literature and scales.

Paper findings state that more mature the company becomes, more diversified the senior management is regardless the firm performance. Also, the industry dynamism impact has its own role in the relationship between the organization life cycle and senior management diversity which is expressed by the paper findings as well.


Keywords


Top management team, Diversity, Company performance, Organization life cycle.

References


Barney, J. B. 1991. Firm resources and sustained competitive advantage. Journal of Management, vol. 17.

Burt, R. S. 1992. Structural Holes: The socio structure of competition. Cambridge, MA: Harvard University Press.

Cannella, A.A., Park, J. A., Lee, H.U. 2008. Top management team functional background diversity and firm performance: Examining the roles of team member colocation and environmental uncertainty. Academy of Management Journal, vol. 51(4).

Carpenter, M. A. 2002. The implications of strategy and socio context for the relationship between top management team diversity and firm performance. Strategic Management Journal, vol. 23.

Coleman, J. S. 1988. Socio capital in the creation of human capital. American Journal of Sociology, vol. 94.

Dodge, H.R., & Robbins, J.E. 1992. An empirical investigation of the organizational life cycle model for small business development and survival, Journal of Small Business Management, vol. 30(1).

Greiner, L.E. 1972. Evolution and revolution as organizations grow, Harvard Business Review, vol. 50(4).

Greve, P., Biemann, T., & Ruigrok, W. 2011. Fishing in the global talent pool: A multilevel approach to foreign executive appointments. Working paper, University of St. Gallen.

Hambrick, D. C. 2007. TMTs theory: An update. Academy of Management Review, vol. 32.

Kimberly John R. and Robert H, Miles, 1980 Sources, Responses, and Effects of Organizational Decline," in The Organizational Life Cycle: Issue in the Creation, Transformation and Decline of Organizations, ed. [San Francisco: Jossey-Bass Publications, 1980].

McNamara, P. & Baden-Fuller, C. 1999. Lessons from the Celltech case: Balancing knowledge exploration and exploitation in organizational renewal. British Journal of Management, vol. 10.

Miller, D. & Friesen, P.H. 1984. Organizations: A Quantum View, Prentice-Hall, Englewood Cliffs, New Jersey.

Pfeffer, J., & Salancik, G. 1978. The external control of organizations: A resource dependence perspective. New York: Harper & Row.

Ruigrok, W., Mayr, R., & Greve, P. 2011. Age matters: Top management team socio-economic faultlines and firm performance. Working paper, University of St. Gallen, Switzerland.

Smith, K.G., T.R.Mitchell, C.E.Summer 1985. Top level management priorities in different stages of the organisational life cycle, Academy of Management Journal, vol. 28(4).


Full Text: PDF

Refbacks

  • There are currently no refbacks.


Creative Commons License
This work is licensed under a Creative Commons Attribution 3.0 License.

The IEECA Press

ISSN 2328-8272 (print)   ISSN 2328-8280 (online)