Antecedents and Performance Consequences of Top Management Team Role Structure

Drawing upon contingency theory, we analyze the antecedents and performance consequences of top management team (TMT) role structure. We argue that environmental dynamism, a firm's diversification degree, and CEO's functional background determine the ratio between functional and divisional TMT members. Further, we hypothesize that the fit between these conditions and TMT role structure improves firm performance. Results from a large-scale sample of S&P 500 firms over a five-year period partially support this contingency perspective in explaining TMT role structure and its performance effects. Specifically, we find that the fit between diversification strategy and TMT role structure is beneficial. The study highlights the importance of TMT structure for understanding how TMTs affect outcomes.