Benefiting from CEO's empowerment of TMTs: Does CEO–TMT dissimilarity matter? |
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| Institution: | 1. George Mason University, School of Business, MSN 5F5, 4400 University Drive, Fairfax, VA 22030-4444, USA;2. Hong Kong Baptist University, Kowloon, Hong Kong;3. Xiamen University, Xiamen, Fujian, China;1. Jepson School of Leadership Studies, 28 Westhampton Way, University of Richmond, VA 23173, USA;2. Social and Organisational Psychology Group, VU University Amsterdam, Van der Boechorststraat 1, 1081 BT Amsterdam, Netherlands;3. Institute for Cognitive and Evolutionary Anthropology, University of Oxford, UK;1. University of Birmingham, Birmingham Business School, B15 2TY, Edgbaston, Birmingham, UK;2. Cass Business School, City University London, UK;3. SOAS, London, UK;1. School of Hotel Administration, Cornell University, Ithaca, NY 14853-6901;2. School of Business Administration, University of Miami, Coral Gables, FL 33124-9145;1. School of Psychology, University of Western Australia, Perth, Australia;2. Division of Psychology, School of Social and Health Sciences, Abertay University, Dundee, Scotland, United Kingdom;3. Institute of Neuroscience and Psychology, University of Glasgow, Glasgow, Scotland, United Kingdom |
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| Abstract: | This study examines empowering leadership from an upper echelons perspective by focusing on top management teams (TMTs) and considering the demographic dissimilarities between the CEO and other TMT members. Data from a multisource survey of 129 Chinese firms demonstrate the importance of the fit between the backgrounds of the leader and the TMT members. Although empowerment of TMTs by CEOs predicts superior organizational performance in general, the findings show that this practice is most beneficial when the CEO and the TMT members differ in their informational demographics but have a longer tenure overlap. If either dissimilarity in informational demographics or tenure overlap is lacking, the CEO's empowerment of the TMT has a less positive effect on firm performance. Essentially, a three-way interaction is demonstrated. Introducing boundary conditions for the empowerment of TMTs by CEOs and testing their interactive influence broadens our understanding of how CEO leadership style can affect organizational performance, and refines the guidance for practitioners on TMT management. |
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