Browsing by Subject "TMT"
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Item Bridging the Macro-Micro Divide: An Examination of the Proximal Top Management Team Factors that Influence Strategy Implementation and Organizational Performance(2014-04-23) Mistry, SalOrganizational research has historically investigated strategy formulation while giving far less consideration to strategy implementation. This is surprising given that between 70 and 90 percent of formulated strategies fail. Moreover, the few studies that do address strategy implementation focus almost entirely on how the organization, a distal situational determinant, impacts strategy implementation. In addition to prior research focusing on distal situational determinants, most of these studies are conceptual or rely on qualitative or archival data. To fill this gap in theory and research, this dissertation proposes that an organization?s top management team (TMT) is a proximal determinant of strategy implementation, and more specifically, the TMT?s strategy implementation efforts. Indeed only by first understanding the strategists and their effects on TMT strategy implementation can one hope to gain clarity on the alarming rates of implementation failures. Drawing on ?macro-organizational? theory, this treatise develops a new theoretical framework that emphasizes TMTs as being an influential proximal determinant of strategy implementation. To my knowledge, no studies have examined the role that top executive teams have in strategy implementation. Furthermore, using ?micro-organizational? constructs, this dissertation examines the processes and structures that affect strategy implementation and organizational performance. In this sense, rather than argue (as many strategy scholars have) that distal organizational structures or processes influence strategy implementation, I argue a more proximal team structure of executive team interdependence and executive team processes influence the executive team?s strategy implementation, which, in turn, influences the organization?s performance. Accordingly, this dissertation offers an important theoretical contribution to both literature streams that move beyond extant conceptions that the distal organization and its attributes impact strategy implementation and bridges the prevalent micro-macro divide that exists in the literature today. Next, this dissertation provides a valuable empirical contribution by first applying a construct-oriented micro-organizational scholarly approach to tidy up extant strategy implementation and TMT process constructs and then submits these and other proposed factors to an empirical test. Last, given the strikingly high rates of strategy implementation failures, a practical implication of this dissertation is to help top executives optimize their structure, process, and strategy implementation tasks in order to enhance their organization?s performance.Item Top Management Team Personal Wealth, Within-Team Diversity and the Implications for Firm-Level Risk Taking(2012-07-16) Campbell, JoannaThe manager's personal wealth is one of the central building blocks of agency theory, which considers wealth to be an especially important source of individual utility. The managers' financial position, or the portion of their financial well-being that is not dependent on the firm, is also introduced in the original formulation of upper echelons theory. However, despite the importance of executive personal wealth to both theories, it is rarely mentioned, and even more scarcely studied. My research builds on and extends agency and upper echelons theories by focusing on executive personal wealth, defined here as the portion of executive net worth that is not attached to current employment at the firm (i.e., not contingent on current or future earnings). As such, this research provides an initial answer to the following research question: how does the average personal wealth of the top management team as well as within-team differences in wealth influence firm strategic choices with respect to risk? Specifically, I argue that external wealth alters how managers view firm decisions regarding risk; thus, I hypothesize that average top management team (TMT) wealth is negatively related to firm unrelated diversification, positively related to R&D investments, and positively related to firm risk. Next, I propose that two types of within-group diversity ? TMT wealth diversity and TMT pay dispersion ? attenuate the effect of average TMT wealth on these firm outcomes. I test my hypotheses on a panel dataset of over 700 firms/TMTs from the S&P1500 over 2002?2008 using panel tobit and fixed effect models, and conduct multiple robustness checks. Empirical results strongly and consistently support the hypothesized main effects of wealth. However, the results regarding the moderating effect of within-group diversity are weak, as the majority of the moderation hypotheses are not supported. The main conclusion is that wealthier TMTs are less risk averse with respect to firm strategic decisions, which manifests in greater R&D spending, lower unrelated diversification, and higher overall firm risk. Theoretical and empirical implications as well as suggestions for future research are discussed.