The Impact of Environmental Change on the Characteristics of Top management Teams*

AuthorBehlül Üsdiken
DOIhttp://doi.org/10.1111/j.1467-8551.1992.tb00046.x
Publication Date01 Dec 1992
British
Journal
of
Management,
Vol.
3,207-219 (1992)
The Impact
of
Environmental Change on
the
Characteristics
of
Top Management Teams*
Behlul
Usdiken
BogaziGi University Department
of
Management,
P.K.
2,
Bebek, 808
15
Istanbul, Turkey
SUMMARY
The study reported in this paper examined the impact of environmental change on
the background characteristics of top management teams. The banking sector in Turkey
provided the setting
for
the study. Starting with
a
package of economic policy decisions
put into effect in January
1980,
the banking sector experienced
a
shift from
a
highly
stable and regulated industry into one characterized by change, and at times,
a
highly
turbulent setting. Twenty of the
28
banks that existed throughout the
1975-1986
period
constituted the sample for the study. The study focussed on entire management teams,
and data were collected on all incumbents
(380
in total) of general manager or assistant
general manager positions in these banks in the
1975-1986
period. Three biographical
background variables, operationalized at the top-management team level, were included
in the analyses: age, length of time of inside service and formal education. The results
provided support for the expectation that changes in environmental context affect organi-
zational choices about characteristics of top management teams. The effects of environ-
mental change, however, did not appear to be uniform across all variables included
in the study. Size effects were also found for the average age of management teams,
showing that changes in the predicted direction were more common among smaller
organizations. Changes in large banks appeared to lag behind the more immediate
response of smaller banks.
Introduction
Over the last two decades, a major thrust in organi-
zational research has been to explore the interac-
tion between organizations and their environments.
Three dominant perspectives can be discerned
among theorizing and research that has focussed
on the
organization-environment
interface. The
population ecologists (e.g., Hannan and Freeman,
1989) have accorded a deterministic role to the
environment in shaping the fate
of
organizations.
On the contrary, strategic management theorists
(e.g., Hofer and Schendel, 1978) have assumed that
organizations are able to formulate strategic action
and have, therefore, devoted their attention
to
stu-
dying the content and processes
of
strategy-mak-
*This
is
a revised version
of
a paper presented at the
9th
EGOS
Colloquium in Berlin, 11-14 July 1989.
1045-3172/92/040207-13$11.50
@
1992
by John Wiley
&
Sons,
Ltd.
ing. The external control perspective (e.g., Pfeffer
and Salancik, 1978) adopts an intermediate stance
in that organizations are regarded as constrained
by powerful external constituencies but also as hav-
ing some latitude in exercising choice and devising
adaptive responses.
The role of top managements has received, albeit
differently, some attention in the latter two perspec-
tives. Within the strategic management tradition
especially, there has been an upsurge lately in
research interest on top leadership in organiza-
tions. Hambrick and Mason (1984), for example,
have proposed an ‘upper echelons’ theory where
they have posited that organizational strategies and
outcomes would reflect the characteristics
of
top
level managers. In a similar vein, the ‘strategy-
manager alignment’ literature (e.g., Gupta, 1984;
Szilagyi and Schweiger, 1984; Govindarajan, 1989)
has argued that congruence between strategy
requirements and the background and personality
Received31 January
1991
Revised
18
February
1992

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