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This research used data from 53 high-technology firms to test three alternative models of the effects of the top management team's demography and process on organizational performance: (1) a demography model, in which team demography accounts entirely for performance outcomes, and process has no impact; (2) a process model, in which process contributes incrementally and directly to performance outcomes, over and above the team's demography; and (3) an intervening model, in which the effects of the top management team on performance outcomes are due entirely to the effects of its demography on process. The study found the top management team's demography indirectly related to performance through process and process directly related to performance, although direct effects of team demography on performance were also found. These results suggest a fourth, more complex model of top management team behavior.
Although some researchers have argued that leaders and top management teams have little impact on organizational outcomes (Lieberson and O'Connor, 1972; Aldrich, 1979; Astley and Van de Ven, 1983), the emerging view from more recent research suggests otherwise (Romanelli and Tushman, 1986; Finkelstein and Hambrick, 1990). Finkelstein and Hambrick (1990: 500) found that in high-discretion industries, such as computers, for example, managers seem to "matter greatly. This recent stream of research has been facilitated by Hambrick and Mason's (1984) upper-echelons theory, which was inspired by Cyert and March's (1963) concept of the dominant coalition. According to Hambrick and Mason's upper-echelons theory, upper-level managers have an important impact on organizational outcomes because of the decisions they are empowered to make for the organization. Since these managers make decisions consistent with their cognitive base, which is in part a function of their personal values and experiences, their personal experiences and values can be linked to organizational outcomes. Based on this upper-echelons logic, scholars have linked top management teams to organizational innovation (Bantel and Jackson, 1989; O'Reilly and Flatt, 1989), strategy (Finkelstein and Hambrick, 1990; Michel and Hambrick, 1992), strategic change (Grimm and Smith, 1991; Wiersema and Bantel, 1992), and performance (O'Reilly and Flatt, 1989; Michel and Hambrick, 1992; Hambrick and D'Aveni, 1992). The three main clusters of concepts that are of interest in upper-echelons research are the team's demography and process and organizational performance. Demography refers to the aggregated external...