Top Management Team Faultlines and Firm Performance: Moderating Effects of CEO Characteristics
ISSN
0065-0668
Type
conference paper
Date Issued
2014-08-01
Author(s)
Abstract
Research indicates that the impact of TMT faultlines on firm performance is equivocal. We address this issue by emphasizing the moderating role of the CEO. Drawing on the categorization-elaboration model (CEM) and the upper echelons perspective, we propose that CEOs with diverse career experience and shared team tenure with other executives are better equipped to reduce the self-categorization costs of TMT faultlines and enhance information processing and performance benefits. Longitudinal data from an unbalanced panel dataset of 109 large European firms between 2005 and 2009 (390 firm-year observations) shows that experience-based TMT faultlines have more detrimental effects on firm performance than socio-demographic TMT faultlines. Our results also demonstrate that CEOs` background characteristics do play a key role in minimizing the severe performance consequences of experience-based TMT subgroups. Theoretical and practical implications of these findings are discussed together with future research directions.
Language
English
Keywords
Top Management Teams
Faultlines
CEO
Firm Performance
HSG Classification
contribution to scientific community
Refereed
Yes
Book title
Academy of Management Annual Meeting Proceedings. 2014
Publisher
Academy of Management
Start page
35
Event Title
74th Academy of Management Annual Meeting (AOM) 2014 "The Power of Words"
Event Location
Philadelphia, PA
Event Date
01-05.08.2014
Subject(s)
Eprints ID
234031