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The effectiveness of top management groups in manufacturing organisations

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  • West, Michael
  • Patterson, Malcolm
  • Dawson, Jeremy
  • Nickell, Steve

Abstract

We test whether demographic characteristics and team processes in top management teams predict the subsequent productivity and profitability of their companies in 42 UK manufacturing organisation. The results that there are independent effects of both demographic characteristics and team processes. Team member mean educational level and team tenure both predict the subsequent productivity and profitability of the companies positively, while age diversity in the team is a negative predictor of company performance. Team processes (clarity of and commitment to objectives, participation, task orientation, and support for innovation) predict (positively) company performance. Only mean educational level, of the demographic variables, also predicts team processes, suggesting that the effects of demographic variables on company performance are not strongly mediated by team processes. The implications of these findings for the composition and development of top management teams are discussed.

Suggested Citation

  • West, Michael & Patterson, Malcolm & Dawson, Jeremy & Nickell, Steve, 1999. "The effectiveness of top management groups in manufacturing organisations," LSE Research Online Documents on Economics 20209, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:20209
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    1. 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.
    2. Karen A. Bantel & Susan E. Jackson, 1989. "Top management and innovations in banking: Does the composition of the top team make a difference?," Strategic Management Journal, Wiley Blackwell, vol. 10(S1), pages 107-124, June.
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    More about this item

    JEL classification:

    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General

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