Top Management Team Members’ Decision Influence and Cooperative Behaviour: An Empirical Study in the Information Technology Industry
| Published date | 01 April 2014 |
| Date | 01 April 2014 |
| DOI | http://doi.org/10.1111/1467-8551.12004 |
Top Management Team Members’
Decision Influence and Cooperative
Behaviour: An Empirical Study in
the Information Technology Industry
Tine Buyl, Christophe Boone and Walter Hendriks1
University of Antwerp, Faculty of Applied Economics, Department of Management, Antwerp Centre of
Evolutionary Demography, Prinsstraat 13, 2000 Antwerpen, Belgium, and 1Hasselt University,
KIZOK Research Centre, Agoralaan, Building D, 3590 Diepenbeek, Belgium
Corresponding author e-mail: tine.buyl@ua.ac.be
Organizational leadership is generally distributed between the chief executive officer
(CEO) and the top management team (TMT) members. Building on this observation, we
present an empirical investigation of the cues for CEOs to delegate decision-making
influence to particular TMT members. In the literature, explanations both based on
expertise and driven by similarity are described. In this study, we reconcile both expla-
nations by examining the moderating role of the TMT’s level of ‘cooperative behaviour’
(collaboration and information exchange). We analyse when and in what circumstances
TMT members’ expertise and similarity to the CEO regarding his/her functional back-
ground and/or locus-of-control predict their decision-making influence. We postulate
that TMT cooperative behaviour will advance the effect of expertise on TMT members’
decision influence but impede the effect of similarity to the CEO. Our hypotheses are
tested on a data set of 135 TMT members from 32 Dutch and Belgian information
technology firms. Overall, we find that our proposed research model is confirmed for
technology-oriented decisions. Furthermore, we draw exploratory conclusions about the
effect of TMT cooperative behaviour on the systematic distribution of decision influence
in TMTs.
Introduction
Top management teams (TMTs) are often formed
with the explicit goal of uniting individuals who
differ in expertise and experience to improve
decision quality and organizational performance
(Jehn, Northcraft and Neale, 1999). Never-
theless, research in the ‘upper echelons’ stream
(Hambrick and Mason, 1984), which typically
studies the effects of (diversity in) TMT members’
(demographic) characteristics and experiences on
organizational outcomes, shows equivocal results
(Certo et al., 2006; Patzelt, zu Knyphausen-
Aufess and Nikol, 2008). Several scholars argue
that these ambiguous findings might be due to the
implicit assumption in upper echelons research
that the TMT as a whole acts as an organization’s
decision-making unit (Roberto, 2003) and that
each TMT member’s unique expertise and knowl-
edge will be used collectively in TMT decision-
making (Bunderson, 2003a). However, this
We wish to thank the participants of the Strategic Deci-
sion Making session of the Academy of Management
Meeting in Chicago (2009) and the members of the
Antwerp Centre of Evolutionary Demography for their
constructive comments. Furthermore, we gratefully
acknowledge financial support from the Research Foun-
dation – Flanders (FWO-Vlaanderen), both through the
Odysseus programme and through a personal scholar-
ship of the first author.
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British Journal of Management, Vol. 25, 285–304 (2014)
DOI: 10.1111/1467-8551.12004
© 2013 The Author(s)
British Journal of Management © 2013 British Academy of Management. Published by John Wiley & Sons Ltd,
9600 Garsington Road, Oxford OX4 2DQ, UK and 350 Main Street, Malden, MA, 02148, USA.
collective perspective on TMTs implies that
important individual-level effects are overlooked
(Carpenter, Geletkanycz and Sanders, 2004).1In
our study, we explicitly consider the fact that not
all TMT members have equal impact on strategic
decisions and we propose that TMT members’
decision influence depends on their own (demo-
graphic) backgrounds and the TMT’s processes.
By treating the TMT as a monolithic unit, TMT
scholars ignore that TMTs are essentially hierar-
chical decision-making bodies (Hollenbeck et al.,
1995), underestimating the often dominant role of
the chief executive officer (CEO). The CEO – the
‘formal leader’ of the TMT and the organization –
plays a unique and decisive role in the distribution
of decision influence by delegating it to the
TMT members (Hakimi, van Knippenberg and
Giessner, 2010). Former research (e.g. Arendt,
Priem and Ndofor, 2005; Bunderson, 2003a) sug-
gests that CEOs use different cues to delegate
decision influence to certain TMT members. First,
the ‘strategic contingencies’ view (Hickson et al.,
1971) suggests that CEOs should be guided by
TMT members’ expertise, as groups perform
better (e.g. better quality decisions, fewer errors,
higher efficiency) when expert members are
allowed to influence group decisions (e.g. Libby,
Trotman and Zimmer, 1987; Littlepage et al.,
1995). Second, CEOs tend to attribute decision
influence to those who are similar to them
(Hoffman and Maier, 1966). In contrast to the
strategic contingencies view, behavioural theories
of decision-making de-emphasize the primacy of
expertise and stress the importance of socio-
psychological forces in shaping TMT decision-
making (Eisenhardt and Zbaracki, 1992). The
‘homophily’ mechanism – implying that people
consciously and unconsciously prefer working
with others who are similar to them (for a review
see McGuire, 1985) – has been introduced as a
major potential source of decision influence.
CEOs tend to delegate decision influence to
similar subordinates because they expect them to
perform in ways that reinforce their own personal
interests (Jackson et al., 1991; Tsui and O’Reilly,
1989).
Hence, we identify two separate cues that may
induce CEOs to delegate decision influence to par-
ticular TMT members2– their expertise and simi-
larity – but it remains inconclusive which of these
two will prevail. Little systematic research has
been performed on the exact determinants of
decision influence of individual TMT members
(Menz, 2012; Smith et al., 2006). We attend to this
gap by proposing that the salience of the two cues
for CEOs’ delegation of decision influence will be
moderated by the TMT’s internal processes –
here, TMT cooperative behaviour, which includes
collaboration and information exchange between
TMT members (Milton and Westphal, 2005).
TMT cooperative behaviour captures a team
climate where members of the TMT act as a ‘real’
team as opposed to a fragmented, loosely coupled
collection of executives3(cf. Hambrick, 1994).
Recent research underscores the central role of
such cooperative climate for TMT functioning
(Boone and Hendriks, 2009; Friedrich et al.,
2009). For instance, Carmeli and Schaubroeck
(2006, p. 442) found that TMTs that are ‘charac-
terized by intense interaction that produces open
information exchange and collaboratively based
solutions’ display higher quality in their decision-
making.
We expect that high TMT cooperative behav-
iour increases the CEO’s reliance on the expertise
of its TMT members to delegate decision influ-
ence and decreases the relevance of the socio-
psychological forces of TMT member similarity.
In cooperative teams, the CEO is aware of the
areas of expertise of the TMT members
(Rulke and Galaskiewicz, 2000) and is better able
to draw from the executives’ knowledge
(Lubatkin et al., 2006). Therefore, cooperative
behaviour increases competence-based trust
(Carmeli and Schaubroeck, 2006), which stimu-
1See Menz (2012) for a recent review, synthesis and
research agenda on individual-level TMT research.
2Although both cues suggest different sources of TMT
members’ decision influence – i.e. expertise versus simi-
larity to the CEO – they are not fundamentally incom-
patible. A TMT member might simultaneously be both
expert and similar to the CEO.
3TMT cooperative behaviour is highly related to the con-
struct ‘behavioural integration’ (Hambrick, 1994), which
is generally defined as a meta-construct including three
dimensions: collaborative behaviour, information
exchange, and joint decision-making. In this study, we
particularly focus on the two dimensions pertaining to
the TMT’s cooperative climate – collaboration and
information exchange – and study how this climate
affects the dyadic relation between the CEO and indi-
vidual TMT members concerning delegation of decision
influence.
286 T. Buyl, C. Boone and W. Hendriks
© 2013 The Author(s)
British Journal of Management © 2013 British Academy of Management.
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