IDEAS home Printed from https://ideas.repec.org/a/inm/ormnsc/v38y1992i10p1445-1466.html
   My bibliography  Save this article

Top Team Deterioration as Part of the Downward Spiral of Large Corporate Bankruptcies

Author

Listed:
  • Donald C. Hambrick

    (Graduate School of Business, 711 Uris Hall, Columbia University, New York, New York 10027)

  • Richard A. D'Aveni

    (Amos Tuck School of Business Administration, Dartmouth College, Hanover, New Hampshire 03755)

Abstract

This exploratory study of 57 large bankruptcies and 57 matched survivors examined the top management team (TMT) characteristics associated with major corporate failure. Prior research was used to guide selection of specific team characteristics for study. Not only did the failing firms show significant annual, or cross-sectional, divergence from survivors on several indicators of TMT composition, but also those divergences became more pronounced, even accelerating, over the last five years of the bankrupts' lives. The results thus suggest that deterioration of the top management team is a central element of the downward spiral of large corporate failures. Based upon a limited test of causality, the authors propose that a two-way process is at work: (1) team deficiencies bring about or aggravate corporate deterioration, either through strategic errors or stakeholder uneasiness with the flawed team; and (2) corporate deterioration brings about team deterioration, through a combination of voluntary departures, scapegoating, and limited resources for attracting new executive talent.

Suggested Citation

  • Donald C. Hambrick & Richard A. D'Aveni, 1992. "Top Team Deterioration as Part of the Downward Spiral of Large Corporate Bankruptcies," Management Science, INFORMS, vol. 38(10), pages 1445-1466, October.
    • Handle: RePEc:inm:ormnsc:v:38:y:1992:i:10:p:1445-1466
    DOI: 10.1287/mnsc.38.10.1445
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1287/mnsc.38.10.1445
    Download Restriction: no
    File URL: https://libkey.io/10.1287/mnsc.38.10.1445?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inm:ormnsc:v:38:y:1992:i:10:p:1445-1466. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Asher (email available below). General contact details of provider: https://edirc.repec.org/data/inforea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.