Diversity faultlines, shared objectives, and top management team performance

Faultline theory suggests that negative effects of team diversity are better understood by considering the influence of different dimensions of diversity in conjunction, rather than for each dimension separately. We develop and extend the social categorization analysis that lies at the heart of faultline theory to identify a factor that attenuates the negative influence of faultlines: the extent to which the team has shared objectives. The hypothesized moderating role of shared objectives received support in a study of faultlines formed by differences in gender, tenure, and functional background in 42 top management teams. The focus on top management teams has the additional benefit of providing the first test of the relationship between diversity faultlines and objective indicators of organizational performance. We discuss how these findings, and the innovative way in which we operationalized faultlines, extend faultline theory and research as well as offer guidelines to manage diversity faultlines.

Harnessing diversity and collective action in the top management team

Diversity has become an important issue at all levels of the company from the boardroom to the back office. It is increasingly apparent that diversity is vital to productivity, with academic research indicating an important link between diverse top management team (TMT) composition and corporate performance. However, the nature of this link remains elusive, as there is little accessible research that can help top teams to evaluate how diversity impacts on their strategic capacity. This paper seeks to fill this gap by developing a conceptual framework, illustrated with case examples, to explain the relationships between TMT diversity and TMT collective action. As collective action is difficult to attain from top teams that are high in diversity, six practical processes are developed from this framework for establishing and exploiting top team strategic capacity. The paper concludes by outlining the theoretical implications of the framework. © Elsevier Ltd. All rights reserved.

An exploration of the determinants of innovation:the top management team, organisational climate and organisational learning

Some researchers argue that the top team, rather than the CEO, is a better predictor of an organisation’s fate (Finkelstein & Hambrick, 1996; Knight et al., 1999). However, others suggest that the importance of the top management team (TMT) composition literature is exaggerated (West & Schwenk, 1996). This has stimulated a need for further research on TMTs. While the importance of TMT is well documented in the innovation literature, the organisational environment also plays a key role in determining organisational outcomes. Therefore, the inclusion of both TMT characteristics and organisational variables (climate and organisational learning) in this study provides a more holistic picture of innovation. The research methodologies employed includes (i) interviews with TMT members in 35 Irish software companies (ii) a survey completed by managerial respondents and core workers in these companies (iii) in-depth interviews with TMT members from five companies. Data were gathered in two phases, time 1 (1998-2000) and time 2 (2003). The TMT played an important part in fostering innovation. However, it was a group process, rather than team demography, that was most strongly associated with innovation. Task reflexivity was an important predictor of innovation time 1, time 2). Only one measure of TMT diversity was associated with innovation - tenure diversity -in time 2 only. Organisational context played an important role in determining innovation. This was positively associated with innovation - but with one dimension of organisational learning only. The ability to share information (access to information) was not associated with innovation but the motivation to share information was (perceiving the sharing of information to be valuable). Innovative climate was also associated with innovation. This study suggests that this will lead to innovative outcomes if employees perceive the organisation to support risk, experimentation and other innovative behaviours.

Leaders' sensemaking under crises:emerging cognitive consensus over time within management teams

When facing a crisis, leaders' sensemaking can take a considerable amount of time due to the need to develop consensus in how to deal with it so that vision formation and sensegiving can take place. However, research into emerging cognitive consensus when leaders deal with a crisis over time is lacking. This is limiting a detailed understanding of how organizations respond to crises. The findings, based on a longitudinal analysis of cognitive maps within three management teams at a single organization, highlight considerable individual differences in cognitive content when starting to make sense of a crisis. Evidence for an emerging viable prescriptive mental model for the future was found, but not so much in the management as a whole. Instead, the findings highlight increasing cognitive consensus based on similarities in objectives and cause-effect beliefs within well-defined management teams over time.

Top teams and strategy in a UK university

This paper reports on the results of an in-depth study of how a top management team (TMT) puts strategy into practice in a UK university. A study of the top team in Warwick University was conducted to analyse how strategy was formulated and implemented. The results suggest that a combination of two broad theoretical lenses provide useful analytical insight. These are strategy as practice and strategy as process. The main elements of this university’s strategy result from an interplay of localized routines and patterns of action within an organizational context, which both produces and is a product of such actions. The TMT itself was found to be clearly identifiable and stable in composition. The team exhibited identifiable patterns of strategic thinking and acting. However, the role of organizational structure was also found to be a key influence on the actions and processes of the TMT with strong central control tendencies in the team being counterbalanced by devolved operational control to individual departments. The data also reveal inter-relationships between organizational structures and the TMT in four key areas: direction-setting, monitoring and control, the allocation of resources, and processes of interaction. The overall conclusion is that to understand how strategy is practised, analysis needs to focus on how patterns of action are associated with the characteristics of both the team and the wider organization. The nature and characteristics of these patterns can be related to how strategy is put into practice.

An investigation of management accounting control systems in the palm oil industry:a sociomaterial approach to practice change

The primary aim of this research is to understand what constitutes management accounting and control (MACs) practice and how these control processes are implicated in the day to day work practices and operations of the organisation. It also examines the changes that happen in MACs practices over time as multiple actors within organisational settings interact with each other. I adopt a distinctive practice theory approach (i.e. sociomateriality) and the concept of imbrication in this research to show that MACs practices emerge from the entanglement between human/social agency and material/technological agency within an organisation. Changes in the pattern of MACs practices happens in imbrication processes which are produced as the two agencies entangle. The theoretical approach employed in this research offers an interesting and valuable lens which seeks to reveal the depth of these interactions and uncover the way in which the social and material imbricate. The theoretical framework helps to reveal how these constructions impact on and produce modifications of MACs practices. The exploration of the control practices at different hierarchical levels (i.e. from the operational to middle management and senior level management) using the concept of imbrication process also maps the dynamic flow of controls from operational to top management and vice versa in the organisation. The empirical data which is the focus of this research has been gathered from a case study of an organisation involved in a large vertically integrated palm oil industry company in Malaysia specifically the refinery sector. The palm oil industry is a significant industry in Malaysia as it contributed an average of 4.5% of Malaysian Gross Domestic Product, over the period 1990 -2010. The Malaysian palm oil industry also has a significant presence in global food oil supply where it contributed 26% of the total oils and fats global trade in 2010. The case organisation is a significant contributor to the Malaysian palm oil industry. The research access has provided an interesting opportunity to explore the interactions between different groups of people and material/technology in a relatively heavy process food industry setting. My research examines how these interactions shape and are shaped by control practices in a dynamic cycle of imbrications over both short and medium time periods.

A study of strategic HR issues in an Asian context

Examines five strategic human resource management (HRM) issues using a qualitative methodology. Two of these are related to the central organisational-level constructs of structure and culture. The other three pertain to HR strategy, HR competencies, and HR outsourcing. The study employed the multiple-case design method proposed by Yin, with a view to extending theory in strategic HRM research. Semi-structured interviews were conducted with 35 managers (CEOs, line managers, and HR managers) of nine companies from two major industries in the manufacturing sector – electronic products and machinery/equipment. The research found that top management enlightenment and level of HR competencies together determine the role and status of the HR function in organisations, and that the companies studied pursue four types of HR strategies: informal and not communicated; informal and communicated; formal but not communicated; and formal and communicated. HR strategy was found to affect both vertical and horizontal fits of the HR function. Culture, HR strategy and HR competencies influenced organisational propensity to outsource HR activities.

Business process orientated holonic (PrOH) modeling

Purpose: The purpose of this paper is to describe how the application of systems thinking to designing, managing and improving business processes has resulted in a new and unique holonic-based process modeling methodology know as process orientated holonic modeling. Design/methodology/approach: The paper describes key systems thinking axioms that are built upon in an overview of the methodology; the techniques are described using an example taken from a large organization designing and manufacturing capital goods equipment operating within a complex and dynamic environment. These were produced in an 18 month project, using an action research approach, to improve quality and process efficiency. Findings: The findings of this research show that this new methodology can support process depiction and improvement in industrial sectors which are characterized by environments of high variety and low volume (e.g. projects; such as the design and manufacture of a radar system or a hybrid production process) which do not provide repetitive learning opportunities. In such circumstances, the methodology has not only been able to deliver holonic-based process diagrams but also been able to transfer strategic vision from top management to middle and operational levels without being reductionistic. Originality/value: This paper will be of interest to organizational analysts looking at large complex projects whom require a methodology that does not confine them to thinking reductionistically in "task-breakdown" based approaches. The novel ideas in this paper have great impact on the way analysts should perceive organizational processes. Future research is applying the methodology in similar environments in other industries. © Emerald Group Publishing Limited.

Earnings behaviour of financially distressed firms:The role of institutional ownership

Using a sample of 859 U.S. bankruptcy-filing firms over the period 1986-2004, we examine the earnings behaviour of managers during the distressed period by looking at sources of abnormal accruals prior to the bankruptcy-filing year. Results show that managers of highly distressed firms shift earnings downwards prior to the bankruptcy filing. We test and provide evidence in support of two potential contributing factors. First, top-level management turnover among distressed firms leads new managers to earnings bath choices during the distressed period. Second, qualified audit opinions exert pressure on managers to follow more conservative earnings behaviour during the distressed period. Evidence is also provided that the management of distressed firms with lower (higher) institutional ownership has greater (lesser) tendency to manage earnings downwards. Results also show that higher institutional ownership mitigates the negative abnormal returns of firms with top management turnover. To the authors' knowledge, this is the first study that attempts to examine whether institutional ownership relates to market reaction in conjunction with a top management turnover or a qualified audit opinion during the distressed period. Prior studies focused on the investigation of earnings management or institutional ownership (separately) during the distressed period, but did not examine if the effect of institutional ownership on earnings behaviour also influences subsequent returns. Thus, the results of this study should be of interest to analysts, standard setters and regulatory bodies since our results show that management turnover, qualified audit opinions and firm governance mechanisms affect the quality of earnings and the level of abnormal returns. © 2007 Accounting Foundation, The University of Sydney.

A comparative study of market orientation in China's two services sectors

Developing a Market Orientation (MO) is one of the key managerial issues. In this study, using a sample of firms from two services sectors in China with distinctly different business environments, we explored the effects of business environment on the development of a MO. A key finding of our study is that the effectiveness of top management emphasis on the MO development varies under different environmental conditions.

Does business environment matter to the development of a market orientation?

Developing a market orientation is one of the key issues in market-orientation research. In this study, based on a survey of top managers from 143 Chinese hotels and 72 travel services—two tourism sectors with distinctly different business environments—we explore the effects of environmental conditions on the development of market orientation. In particular we examine whether environmental conditions have a direct impact on the level of market orientation or whether they moderate the relationship between market orientation and its antecedents. We find that the effectiveness of top management emphasis varies under different environmental conditions but that the impact of other antecedents is not influenced by environmental conditions.

Mapping causal knowledge: how people consider their environment during meetings

Causal mapping can help managers to think through the causal influence between issues, enabling them to base a decision on a more structured consideration. Even in regular meetings, learning and the integration of knowledge from diverse stakeholders can benefit from causal mapping. Four causal mapping meetings with management teams are analysed to assess how managers thought causally about their environment when strategy-making. We found that although managers can use other views to expand their environmental knowledge, some prefer to use familiar information rather than less familiar information. Despite this preference, many managers thought systemically about a raft of related issues. We discuss our findings in the context of regular meetings and offer improvements to the facilitation of group causal mapping.

Strategic development process and complex adaptive systems

The two areas of theory upon which this research was based were „strategy development process?(SDP) and „complex adaptive systems? (CAS), as part of complexity theory, focused on human social organisations. The literature reviewed showed that there is a paucity of empirical work and theory in the overlap of the two areas, providing an opportunity for contributions to knowledge in each area of theory, and for practitioners. An inductive approach was adopted for this research, in an effort to discover new insights to the focus area of study. It was undertaken from within an interpretivist paradigm, and based on a novel conceptual framework. The organisationally intimate nature of the research topic, and the researcher?s circumstances required a research design that was both in-depth and long term. The result was a single, exploratory, case study, which included use of data from 44 in-depth, semi-structured interviews, from 36 people, involving all the top management team members and significant other staff members; observations, rumour and grapevine (ORG) data; and archive data, over a 5½ year period (2005 – 2010). Findings confirm the validity of the conceptual framework, and that complex adaptive systems theory has potential to extend strategy development process theory. It has shown how and why the strategy process developed in the case study organisation by providing deeper insights to the behaviour of the people, their backgrounds, and interactions. Broad predictions of the „latent strategy development? process and some elements of the strategy content are also possible. Based on this research, it is possible to extend the utility of the SDP model by including peoples? behavioural characteristics within the organisation, via complex adaptive systems theory. Further research is recommended to test limits of the application of the conceptual framework and improve its efficacy with more organisations across a variety of sectors.