Dc. Hambrick et al., THE INFLUENCE OF TOP MANAGEMENT TEAM HETEROGENEITY ON FIRMS COMPETITIVE MOVES, Administrative science quarterly, 41(4), 1996, pp. 659-684
This paper explores the executive origins of firms' competitive moves
by focusing on top management team characteristics, specifically on te
am heterogeneity, rather than on the more often studied environmental
and organizational determinants of such behaviors, Arguing that compet
itive actions and responses represent different decision situations, w
e develop propositions about how heterogeneity may enhance some compet
itive behaviors but impair others. With a large sample of actions and
responses of 32 U.S. airlines over eight years, we find results that l
argely conform to our propositions. The top management teams that were
diverse, in terms of functional backgrounds, education, and company t
enure, exhibited a relatively great propensity for action, and both th
eir actions and responses were of substantial magnitude. Heterogeneous
teams, by contrast, were slower in their actions and responses and le
ss likely than homogeneous teams to respond to competitors' initiative
s. Thus, although team heterogeneity is a double-edged sword, its over
all net effect on airline performance, in terms of changes in market s
hare and profits, was positive.