The Influence of Top Management Team Heterogeneity on Firms' Competitive Moves

  • Hambrick D
  • Cho T
  • Chen M
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Abstract

Explores the executive origins of firms' competitive moves by focusing on top management team characteristics, specifically on team heterogeneity. Arguing that competitive actions and responses represent different decision situations, the authors develop propositions about how heterogeneity may enhance some competitive behaviors but impair others. With a large sample of actions and responses of 32 US airlines over 8 yrs, the authors find results that largely conform to their propositions. The top management teams that were diverse, in terms of functional backgrounds, education, and company tenure, exhibited a greater propensity for action, and both their actions and responses were of substantial magnitude. Heterogeneous teams were slower in their actions and responses and less likely than homogeneous teams to respond to competitors' initiatives.

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Authors

  • Donald C. Hambrick

  • Theresa Seung Cho

  • Ming-Jer Chen

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