|This dissertation takes an evolutionary approach toward Top Management Team (TMT) heterogeneity by examining its antecedents (i.e., CEO characteristics) and outcomes (i.e., firm performance, TMT turnover) as well as several boundary conditions of these relationships (i.e., TMT discretion, TMT power distribution). Four primary research questions are explored in detail, including 1) In what ways are a CEO’s characteristics related to TMT heterogeneity?; 2) What is the nature of the relationship between TMT heterogeneity, firm performance, and TMT turnover?; 3) What are the temporal dynamics of these relationships?; and 4) How do TMT power and discretion influence the relationships between TMT heterogeneity, firm performance, and turnover?
The primary goal of this study was to better understand how TMT heterogeneity manifests in organizations and the influence it has on different outcomes of interest to firms. Emanating from the strategic leadership literature, the Upper Echelons perspective served as the primary theoretical framework in this study. Additional theories from the strategic management and social psychology literatures were incorporated to gain a greater understanding of the modeled relationships as well as how they unfold over time.
Using latent growth modeling and multiple regression analyses, this study examined the above phenomena among a sample of firms on the Fortune 1000 list from 2002 through 2012. The results highlight the complicated associations between executive diversity, firm performance, and executive turnover over time. Specifically, most
diversity types had a short-lived influence on performance, though TMT Race Diversity emerged as having a persistent and nonlinear relation. Additionally, certain diversity types were associated with gains in financial performance, though only when combined with certain levels of specific moderators. Ultimately, this study finds support for the influence of CEOs on TMT diversity, the Upper Echelons perspective, and, perhaps most importantly, the benefits of opening the ‘black box’ in organizational demography research.