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Top Management Team Agreement About The Strategic Decision Process: A Test Of Some Of Its Determinants And Consequences

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  • ANTHONY L. IAQUINTO
  • JAMES W. FREDRICKSON

Abstract

The level of agreement among a firm’s top executives about how things are done in that firm has a variety of important implications. For example, agreement about a firm’s decision‐making norms may allow members of the top management team (TMT) to focus on the substance of their most critical decisions and not get bogged down in debates about the process. In the present study, data from 65 firms in two industries were used to identify determinants and consequences of TMT agreement about the comprehensiveness of the strategic decision process. Results for consequences indicate that the level of TMT agreement was positively related to organizational performance. As for the determinants of agreement, organizational size was negatively related to agreement but past performance exhibited no association. Therefore, the results suggest that it is TMT agreement that influences performance, not the reverse. In addition, a surprising result was that firms in an industry with an unstable environment exhibited significantly more agreement about the process than did their counterparts in an industry whose environment was stable. © 1997 by John Wiley & Sons, Ltd.

Suggested Citation

  • Anthony L. Iaquinto & James W. Fredrickson, 1997. "Top Management Team Agreement About The Strategic Decision Process: A Test Of Some Of Its Determinants And Consequences," Strategic Management Journal, Wiley Blackwell, vol. 18(1), pages 63-75, January.
    • Handle: RePEc:bla:stratm:v:18:y:1997:i:1:p:63-75
    DOI: 10.1002/(SICI)1097-0266(199701)18:13.0.CO;2-N
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    1. Olie René & Heijltjes Mariëlle G. & Glunk Ursula, 2003. "Continuity And Renewal At The Top: Performance Effects Of The Level, Extent, Type And Frequency Of Top Management Team Changes," Research Memorandum 059, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
    2. Corrado Cuccurullo & Federico Lega, 2013. "Effective strategizing practices in pluralistic settings: the case of Academic Medical Centers," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 17(3), pages 609-629, August.
    3. María del Carmen Triana & Toyah L. Miller & Tiffany M. Trzebiatowski, 2014. "The Double-Edged Nature of Board Gender Diversity: Diversity, Firm Performance, and the Power of Women Directors as Predictors of Strategic Change," Organization Science, INFORMS, vol. 25(2), pages 609-632, April.
    4. David Deakins & Eileen O'Neill & Patrick Mileham, 2001. "Chief Executive Officers and Nonexecutive Directors: Their Relationships in Small Companies," Environment and Planning C, , vol. 19(3), pages 355-372, June.
    5. Ramos-Garza, Claudia, 2009. "TMT strategic consensus in Mexican companies," Journal of Business Research, Elsevier, vol. 62(9), pages 854-860, September.
    6. J. Ruben Boling & Torsten M. Pieper & Jeffrey G. Covin, 2016. "CEO Tenure and Entrepreneurial Orientation within Family and Nonfamily Firms," Entrepreneurship Theory and Practice, , vol. 40(4), pages 891-913, July.
    7. Rapert, Molly Inhofe & Velliquette, Anne & Garretson, Judith A., 2002. "The strategic implementation process: evoking strategic consensus through communication," Journal of Business Research, Elsevier, vol. 55(4), pages 301-310, April.
    8. Rydén, Pernille & Ringberg, Torsten & Wilke, Ricky, 2015. "How Managers' Shared Mental Models of Business–Customer Interactions Create Different Sensemaking of Social Media," Journal of Interactive Marketing, Elsevier, vol. 31(C), pages 1-16.
    9. Dalton, Dan R. & Daily, Catherine M., 1998. "Executive briefing/corporate governance digest," Business Horizons, Elsevier, vol. 41(2), pages 6-7.
    10. Alessandro Minichilli & Guido Corbetta & Ian C. MacMillan, 2010. "Top Management Teams in Family‐Controlled Companies: ‘Familiness’, ‘Faultlines’, and Their Impact on Financial Performance," Journal of Management Studies, Wiley Blackwell, vol. 47(2), pages 205-222, March.
    11. Ciaran Heavey & Zeki Simsek & Frank Roche & Aidan Kelly, 2009. "Decision Comprehensiveness and Corporate Entrepreneurship: The Moderating Role of Managerial Uncertainty Preferences and Environmental Dynamism," Journal of Management Studies, Wiley Blackwell, vol. 46(8), pages 1289-1314, December.
    12. Mark M. Suazo, 2007. "Implications of the Affective Response to Psychological Contract Breach," Working Papers 0028, College of Business, University of Texas at San Antonio.
    13. Barron, John M. & Chulkov, Dmitriy V. & Waddell, Glen R., 2011. "Top management team turnover, CEO succession type, and strategic change," Journal of Business Research, Elsevier, vol. 64(8), pages 904-910, August.
    14. Patricia Pitcher & Anne D. Smith, 2001. "Top Management Team Heterogeneity: Personality, Power, and Proxies," Organization Science, INFORMS, vol. 12(1), pages 1-18, February.
    15. Bongjin Kim & Mark M. Suazo & John E. Prescott, 2008. "Exploring the Cognitive Nature of Boards of Directors and Its Implication for Board Effectiveness," Working Papers 0032, College of Business, University of Texas at San Antonio.
    16. Elosge, Corinna & Oesterle, Michael-Joerg & Stein, Christina M. & Hattula, Stefan, 2018. "CEO succession and firms’ internationalization processes: Insights from German companies," International Business Review, Elsevier, vol. 27(2), pages 367-379.
    17. Ramirez, R. & Bhatti, Y. & Tapinos, E., 2020. "Exploring how experience and learning curves decrease the time invested in scenario planning interventions," Technological Forecasting and Social Change, Elsevier, vol. 151(C).
    18. Schrettle, Stefan & Hinz, Andreas & Scherrer -Rathje, Maike & Friedli, Thomas, 2014. "Turning sustainability into action: Explaining firms' sustainability efforts and their impact on firm performance," International Journal of Production Economics, Elsevier, vol. 147(PA), pages 73-84.
    19. Linlin Jin & Kristen Madison & Nils D. Kraiczy & Franz W. Kellermanns & T. Russell Crook & Jing Xi, 2017. "Entrepreneurial Team Composition Characteristics and New Venture Performance: A Meta–Analysis," Entrepreneurship Theory and Practice, , vol. 41(5), pages 743-771, September.

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