Dynamic modeling of strategic thinking for top management teams and its impact on firm performance: a system dynamics approach

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Aqueeb Sohail Shaik ◽  
Sanjay Dhir
Keyword(s):  
Firm Performance ◽  
System Dynamics ◽  
Modeling And Simulation ◽  
Top Management Teams ◽  
Strategic Thinking ◽  
Top Management ◽  
Psychological Traits ◽  
Content Type ◽  
Psychological Constructs ◽  
Thinking Process

PurposeThe purpose of this study is to model the strategic thinking process, considering the different psychological traits of TMTs (top management teams) and how the technological dynamism affects the strategies framed together impacting the performance of the firm.Design/methodology/approachModeling and simulation are done in this study using the system dynamics (SD) tool. The data are extracted using social media analytics, and the same is given as an input for the SDmodel, which is used for modeling and simulation of the interdependencies between the psychological factors, technological dynamism and firm performance. The analysis decodes how a change in the thinking process of a TMT has an impact on the performance of the company in an automobile market.FindingsThe study has explained how different psychological traits affect the thinking process of a TMT and how the strategies framed with this thinking behavior have an impact on firm performance.Research limitations/implicationsThe study is limited only to the automobile industry in India, and only partial psychological constructs were considered to examine their impact on firm performance. This study can be further extended by analyzing the same to various other industries along with many other psychological constructs.Practical implicationsThe findings identify the change in behavior of the performance due to the thinking process and technological dynamism. This helps the top management to take into consideration different factors that affect the strategies framed for the company and what are the threshold points in the system that are to be focused on during the framing of a strategy.Originality/valueThe study fills the unattended gaps in the literature regarding how the psychological traits are interdependent and how their relationship is affecting the thinking process, which is going to have an impact on the behavior of the firm performance. It also adds to the literature of systems thinking.

Does participatory decision‐making in top management teams enhance decision effectiveness and firm performance?

2009 ◽  
Vol 38 (6) ◽  
pp. 696-714 ◽  
Author(s):  
Abraham Carmeli ◽  
Zachary Sheaffer ◽  
Meyrav Yitzack Halevi
Keyword(s):  
Decision Making ◽  
Firm Performance ◽  
Top Management Teams ◽  
Management Teams ◽  
Strategic Decision ◽  
Top Management ◽  
Joint Decision ◽  
Content Type ◽  
Participatory Decision Making ◽  
Decision Making Processes

PurposeThe purpose of this paper is to examine how participatory decision‐making processes in top management teams (TMT) influence strategic decision effectiveness and firm performance.Design/methodology/approachData from 94 TMTs are collected from structured surveys. Each firm's CEO provides data on strategic decision effectiveness, and a senior executive member of the TMT provided data on participatory decision‐making processes and firm performance.FindingsResults show that participatory decision‐making processes in the TMT are positively associated with decision effectiveness, but there is both a direct and an indirect relationship (through decision effectiveness) between participatory decision‐making processes and firm performance.Originality/valueThis paper sheds light on the importance of joint decision‐making processes among TMT members for improving choices and enhances firm performance.

scholarly journals Top management team meetings and firm performance

2020 ◽  
Vol 33 (6) ◽  
pp. 691-708
Author(s):  
Iman Harymawan ◽  
Mohammad Nasih ◽  
John Nowland
Keyword(s):  
Firm Performance ◽  
Performance Metrics ◽  
Top Management Team ◽  
Poor Performance ◽  
Top Management Teams ◽  
Management Team ◽  
Top Management ◽  
Content Type ◽  
Team Meeting ◽  
Team Meetings

Purpose How do shareholders know if corporate managers are doing their jobs? This paper aims to propose using top management team meetings as a measure of the behavior of company managers. More meetings may indicate effective effort by top management to enhance company performance. Alternatively, more meetings may reflect procrastination and decision paralysis. Design/methodology/approach Using top management team meeting data publicly disclosed by Indonesian companies during 2010–2017, this study tests for these hypothesized relationships between top management team meeting frequency and firm performance. Findings This study found that top management team meetings are positively related to firm performance, indicating that more meetings do represent more effective effort by top management teams. Further analysis shows that only firms that consistently hold more meetings than their peers perform better, particularly during periods of poor performance. Originality/value This study highlights top management team meetings as a valid signal of management effort and suggests there should be louder calls for disclosure of these types of executive performance metrics around the world.

scholarly journals Management Accounting Systems, Top Management Teams, and Sustainable Knowledge Acquisition: Effects on Performance

2020 ◽  
Vol 12 (5) ◽  
pp. 2132
Author(s):  
Andrés F. Ugalde Vásquez ◽  
David Naranjo-Gil
Keyword(s):  
Firm Performance ◽  
Knowledge Acquisition ◽  
Management Accounting ◽  
Top Management Teams ◽  
Management Teams ◽  
Mediating Effect ◽  
Top Management ◽  
Accounting Systems ◽  
Management Accounting Systems ◽  
Acquisition Processes

Organizations are increasingly aware of the importance of managing the acquisition processes of new and sustainable knowledge, which allows them to increase performance. These knowledge-acquisition processes require top management teams to focus on the external environment to search for sustainable opportunities and initiatives. This spurs top teams to make strategic decisions that require more comprehensive managerial information, which is provided by management accounting systems. Our research analyzes how top management team composition facilitates the acquisition of new knowledge. Our management accounting paper also analyzes the mediating effect of the interactive use of management accounting systems (MASs) and their impact on sustainable firm performance. A survey was conducted among the main manufacturer firms in the Republic of Ecuador. Results were analyzed by using the partial least squares methodology, and they showed a positive effect for the interactive use of management accounting systems on sustainable knowledge-acquisition processes. Results also showed that knowledge acquisition increased firm performance through an interactive use of MASs.

The glue that holds an organization together: building organizational vision with top management teams

2018 ◽  
Vol 32 (6) ◽  
pp. 1-4
Author(s):  
Frank Lattuch ◽  
Patricia Dankert
Keyword(s):  
Organizational Development ◽  
Design Methodology ◽  
Case Analysis ◽  
Shared Vision ◽  
Top Management Teams ◽  
Management Teams ◽  
Top Management ◽  
Shared Understanding ◽  
Organizational Vision ◽  
Content Type

Purpose Top-management teams often have no shared understanding of the organizational vision, or they find it unhelpful for decision-making due to its vague and uninspiring style. The purpose of this paper is to test a theory-based workshop to effectively develop a shared vision for organizational development and learning. Design/methodology/approach Based on the Collins and Porras (2008) vision framework, the authors tested a workshop design with top management teams. Findings The outlined vision workshop is a useful tool to develop a shared organizational vision in a systematic way. Originality/value This paper provides a practical approach to vision building that is relevant and shared by top management teams. Lessons drawn from the case analysis provide insights into the means by which organizations can shape their development through a compelling, guiding force.

Antecedents of relationship conflict in top management teams

2014 ◽  
Vol 25 (2) ◽  
pp. 124-147 ◽  
Author(s):  
Carmen Camelo-Ordaz ◽  
Joaquin García-Cruz ◽  
Elena Sousa-Ginel
Keyword(s):  
Top Management Teams ◽  
Management Teams ◽  
Relationship Conflict ◽  
Top Management ◽  
New Approach ◽  
Content Type ◽  
Behavioral Integration ◽  
Measurement Analysis ◽  
And Behavior ◽  
Relationship Of

Purpose – The aim of this paper is to analyze the influence of two categories of conflict antecedents – input and behavior antecedents – on the level of relationship conflict (RC) in top management teams (TMTs). The authors apply a process view to conflict, and consider that the effect of the input antecedents on RC may be mediated by a behavioral antecedent: behavioral integration. Design/methodology/approach – Using a survey instrument, multi-informant data were collected from 64 TMTs. An aggregation and measurement analysis was performed. To test the hypotheses of mediation, bootstrapping procedures were used. Findings – The results show that the effects of team tenure, intragroup trust and value consensus on relationship conflict are mediated by behavioral integration. However, TMT size does not affect relationship conflict – either directly or indirectly – through behavioral integration. Research limitations/implications – It is concluded that encouraging intragroup trust and value consensus among TMT members facilitates the integrated behavior of the team. This behavioral integration may allow conflict to be constructive. Therefore, firms should make an effort to encourage this psychological context. Originality/value – Previous research about the antecedents of RC in the field of TMTs is inconclusive. Additionally, a new approach to conflict antecedents is considered, to establish a direct and independent relationship between different categories of antecedents and TMT conflict. A relationship of interdependence is considered between different types of antecedents and their effects on RC.

Is top-management remuneration influenced by board characteristics?

2015 ◽  
Vol 23 (1) ◽  
pp. 60-79 ◽  
Author(s):  
Sebastien Deschenes ◽  
Hamadou Boubacar ◽  
Miguel Rojas ◽  
Tania Morris
Keyword(s):  
Corporate Governance ◽  
Academic Research ◽  
Top Management Teams ◽  
Top Management ◽  
Management Compensation ◽  
Content Type ◽  
Board Characteristics ◽  
Good Corporate Governance

Purpose – The purpose of this article is to examine if certain board characteristics have an impact on the total remuneration of top management and the ratio of stock-based remuneration to total top-management remuneration. Design/methodology/approach – The study draws on data from the largest public Canadian companies, the constituents of the TSX/60 index. The study controls for firm size and profitability. Findings – The authors concludes that total remuneration of top management is directly linked to board-member total remuneration and the board average number of director-tenure years. The study also shows that the ratio of stock-based to total top-management remuneration is positively affected by the percentage of independent directors, total remuneration of board directors, the ratio of stock-based remuneration of directors to their total remuneration and the average number of tenure years of the board of directors. Practical implications – If regulators are determined to curb the excesses in top-management remuneration by means of promoting boards with certain characteristics, they should implement measures facilitating the control of directors’ remuneration and tenure, to discourage cronyistic behavior. Good corporate governance requires that the board act as a counterbalance to top management, ensuring that a substantial percentage of top-executive total compensation is variable, and not fixed. According to our findings, the boards that are the most likely to hold managerial avoidance of variable pay in check are those favoring director independence, variable director remuneration and longer director tenures. Social implications – The present article examines specifically the latter aspect, namely, the role of board characteristics (independence, size, compensation, board director ownership and tenure, etc.) in the determination of top-management compensation. This relationship is important because it allows us to further the analysis of corporate governance. If the above-mentioned traits of boards have a meaningful relationship with the compensation of the top management, one might conclude that certain practices in the composition of boards could influence good corporate governance practices. This is relevant for regulatory agencies, for investors and for corporations. Originality/value – The article adds to the extant literature in a number of ways. Firstly, it considers the role of the traits of the board in the determination of the compensation of the top-management teams, and not only of the chief executive officer, as is the focus of previous literature. Secondly, the article focuses on the power interplay between boards and managers, and, more particularly, on the ability of boards to be an effective mechanism of corporate governance. Finally, the article examines the potential impact of board traits in the determination of top-management compensation in the context of Canadian firms, a subject that has received less attention from academic research, which has mostly concentrated on analyzing the issue in the US context.

Using Causal Mapping to Uncover Cognitive Diversity within a Top Management Team

2005 ◽  
pp. 203-232 ◽  
Author(s):  
David P. Tegarden ◽  
Linda F. Tegarden ◽  
Steven D. Sheetz
Keyword(s):  
Firm Performance ◽  
Top Management Team ◽  
Black Box ◽  
Top Management Teams ◽  
Management Team ◽  
Top Management ◽  
Cognitive Diversity ◽  
Causal Mapping ◽  
And Cluster Analysis ◽  
Cognitive Factions

The cognitive diversity of top management teams has been shown to affect the performance of a firm. In some cases, cognitive diversity has been shown to improve firm performance, in other cases, it has worsened firm performance. Either way, it is useful to understand the cognitive diversity of a top management team. However, most approaches to measure cognitive diversity never attempt to open the “black box” to understand what makes up the cognitive diversity of the team. This research reports on an approach that identifies diverse belief structures, i.e., cognitive factions, through the use of causal mapping and cluster analysis. The results show that the use of causal mapping provides an efficient and effective way to identify idiosyncratic and shared knowledge among members of a top management team. This approach allows the cognitive diversity of the top management team to not only to be uncovered, but also to be understood.

Corporate entrepreneurship strategy: an analysis of top management teams in SMEs

2018 ◽  
Vol 13 (4) ◽  
pp. 528-543 ◽  
Author(s):  
Asghar Afshar Jahanshahi ◽  
Khaled Nawaser ◽  
Alexander Brem
Keyword(s):  
Cultural Intelligence ◽  
Corporate Entrepreneurship ◽  
Top Management Teams ◽  
Future Research ◽  
Top Management ◽  
Ambiguity Tolerance ◽  
The South ◽  
Content Type ◽  
East Of Iran

Purpose In order to learn more about the antecedents of strategy at the top management team’s (TMT) level, the purpose of this paper is to investigate the effects of TMT cultural intelligence on corporate entrepreneurship strategy. Then, the authors examine how TMT’s ambiguity tolerance mediates this relationship. Design/methodology/approach The authors tested the hypothesis by collecting survey data from 41 TMTs of small- and medium-sized enterprises in the south-east of Iran. Findings The survey results confirm that a high level of cultural intelligence in TMTs is conducive to corporate entrepreneurship. Furthermore, the result shows that higher levels of cultural intelligence in TMTs relate to a higher level of ambiguity tolerance, which, in turn, enhances the possibility of pursuing corporate entrepreneurship strategy by SMEs. Research limitations/implications The data for this study were obtained from 41 TMTs in the south-east of Iran, which increases the probability that the results may not be directly transferable to certain companies in Western countries. Future research might attempt to test the ideas developed in this paper across different settings and samples. Originality/value Several theoretical and empirical studies have explored possible antecedents of corporate entrepreneurship. But a few papers investigated the role of TMT dispositions on corporate entrepreneurship strategy. By addressing the prominent role of TMT psychological dispositions on corporate entrepreneurship strategy, this paper attempts to fill this gap.

Top management team international experience and strategic decision-making

2018 ◽  
Vol 26 (1) ◽  
pp. 50-70 ◽  
Author(s):  
Akbar Azam ◽  
Cristina Boari ◽  
Fabiola Bertolotti
Keyword(s):  
Decision Making ◽  
Top Management Team ◽  
Time Frame ◽  
International Experience ◽  
Top Management Teams ◽  
Management Team ◽  
Strategic Decision ◽  
Strategic Decision Making ◽  
Top Management ◽  
Content Type

Purpose This study aims to explore the influence of top management team international experience on international strategic decision-making rationality and, subsequently, its effect on decision effectiveness (decision performance). Design/methodology/approach This analysis is based on survey data of small- and medium-sized international Pakistani firms operating in the IT industry. Findings Results show that top management team international experience is positively related to international strategic decision-making rationality, and the latter partially mediates the international experience – decision effectiveness relationship. Research limitations/implications The study is based on data collected from a single industry and focuses on an international decision that occurred within a time-frame of previous four years. Practical implications Findings suggest that international firms, when composing their top management teams, should favor the inclusion of internationally experienced managers. Originality/value The study of the influence of international experience on the decision-making process in general and decision-making rationality in particular has been largely neglected in extant literature. This paper highlights one way through which the international experience of the top management team as a whole relates to the effectiveness of international decisions. The paper also advances emergent managerial cognition literature focusing on the top management team and not individual decision makers.

scholarly journals Bank top management teams, disclosure, learning, survival and failure – 1990-2017

2019 ◽  
Vol 11 (1) ◽  
pp. 31-59 ◽  
Author(s):  
John Holland
Keyword(s):  
Global Financial Crisis ◽  
Rapid Change ◽  
Shareholder Wealth ◽  
Top Management Teams ◽  
Top Management ◽  
Gradual Change ◽  
Content Type ◽  
Bank Disclosure ◽  
The Global Financial Crisis ◽  
Financial Communications

Purpose Corporate financial communications concern public and private disclosure (Holland, 2005). This paper aims to explain how banks developed financial communications and how problems emerged in the global financial crisis. It explores policy responses. Design/methodology/approach Bank cases reveal construction and destruction of the social, knowledge and economic world of financial communications over two periods. Findings In the 1990s, learning about financial communications by a “dominant coalition” (Cyert, March, 1963) in bank top management was stimulated by gradual change. The management learnt how to accumulate social and cultural capital and developed “habitus” for disclosure (Bourdieu, 1986). From 2000, rapid change and secrecy factors accelerated bank internalisation of shareholder wealth maximising values, turning “habitus” in “market for information” (MFI) (Barker, 1998) into a “psychic prison” (Morgan,1986), creating riskier bank cultures (Schein, 2004) and constraining learning. Research limitations/implications The paper introduces sociological concepts to banking research and financial disclosures to increase the understanding about financial information and bank culture and about how regulation can avoid crises. Limitations reflect the small number of banks and range of qualitative data. Practical implications Regulators will have to make visible the change processes, new contexts and knowledge and connections to bank risk and performance through improved regulator action and bank public disclosure. Social Implications “Masking” and rituals (Andon and Free, 2012) restricted bank disclosure and weakened governance and market pressures on banks. These factors mediated bank failure and survival in 2008, as “psychic prisons” “fell apart”. Bank and MFI agents experienced a “cosmology episode” (Weick, 1988). Financial communications structures failed but were reconstructed by regulators. Originality/value The paper shows how citizens require transparency and contested accountability to democratise finance capitalism. Otherwise, problems will recur.

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