Top Management Team Size, CEO Dominance, and firm Performance: The Moderating Roles of Environmental Turbulence and Discretion

Adopting an information-processing perspective and drawing on work in social psychology, a study examined the effects of top management team size and chief executive officer (CEO) dominance on firm performance in different environments. Data from 47 organizations revealed that large teams and teams...

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Bibliographic Details
Published in:Academy of Management journal 1993-08, Vol.36 (4), p.844-863
Main Authors: Haleblian, Jerayr, Finkelstein, Sydney
Format: Article
Language:English
Subjects:
Chief executive officers
Communication
Corporate profits
Decision making
Demographics
Effects
Management decisions
Problem solving
Productivity
Social psychology
Statistical analysis
Strategic management
Studies
Teams
Work environment
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Summary:Adopting an information-processing perspective and drawing on work in social psychology, a study examined the effects of top management team size and chief executive officer (CEO) dominance on firm performance in different environments. Data from 47 organizations revealed that large teams and teams with less dominant CEOs were more profitable in a turbulent environment (the computer industry) than in a stable environment (natural gas distribution). In addition, the association between team size and CEO dominance, and firm performance, is significant in an environment that allows top managers high discretion in making strategic choices but is not significant in a low-discretion environment. Thus, environmental turbulence and discretion appear to operate as complementary constructs.
ISSN:0001-4273
1948-0989
DOI:10.5465/256761