On the one hand, ceos may pursue strategic actions because they are confident they will enhance firm value. How ceo empowering leadership shapes top management team. Upper echelons theory suggests that an organization is a reflection of its top managers because top executives collective interpretations of the strategic environment guide their strategic choices, which ultimately influence organizational outcomes hambrick, 2007. The question that this article seeks to answer is whether chief executives have an influence on the collaborative activity of their organizations.
At the invitation of the editor, i recap the article in which the theory was originally presented, discuss subsequent refinements of the theory, and lay out several promising avenues for. Background on ceo discretion in upper echelons research. Mason 1984, upper echelons theory is the idea that top executives view their situations through their own highly personalized lenses. The uet states that the managerial background traits or characteristics estimate organizational outcomes, planned choices and the performance levels hambrick and mason 1984. This doctoral seminar addresses various aspects of the upper echelons perspective the view that the organizations actions and outcomes are reflections of its top managers. In fact, after more than 30 years since its original conceptualization, the authors believe that the ue field is mature enough. Bromiley, rau social, behavioral, and cognitive influences on upper echelons 175 sparked by hambrick and masons 1984 seminal article tracing firm strategic decisions back to the characteristics of upper echelon managers making those decisions, upper echelon. The relationship between cahrs wp0704 page 3 of 14. Propositions and methodological suggestions are included. The proposal is expected to include 1 conceptual and literature background, 2 theory development and hypotheses, and 3 methodology.
Heterogeneous teams combining knowledge from different domains through. Upper echelons theory, top executives, united states of america, africa. This paper attempts to synthesize these previously fragmented litera tures around a more general upper echelons perspective. Upper echelon characteristics such as age, functional background, and educational. Theorists in various fields have discussed characteristics of top managers. Ceo burnout, managerial discretion, and firm performance. Antecedents and consequences of top management team diversity. An illustration of these components as they combine to form an organizational. In recent years, scholars have started to draw on upper echelons theory to analyze the relationship between the characteristics of top managers and management accounting and control systems.
Small and medium enterprises, upper echelon theory, information technology adoption demographic characteristics. Upper echelons theory in management accounting and control research. There will be a takehome final examination consisting of several questions of an integrative nature. The central premise of upper echelons theory is that executives experiences, values, and personalities greatly influence their interpretations of the situations they face and, in turn, affect their choices. To address this question, the management field has accumulated a substantial amount of research over the past three decades built on upper echelons theory uet, which posits that ceo characteristics manifest in firm strategic actions and, in this way, future firm performance. Hambrick 2007 suggested that executive experiences, values and personalities greatly influence. The theory states that organizational outcomesstrategic choices and performance levelsare partially predicted by managerial background characteristics. The understanding that the senior executives of an organization the ceo and hisher selected team are responsible for strategic formation and enactment. Esteve and others published external environment and upper echelons. Due to the reason that managerial values and perceptions are difficult to measure, the upper echelons theory draws prior.
Prime journal of business administration and management. Impression offsetting as an early warning signal of low ceo. Alternatively, ceos may take actions even when they have low confidence in the value of those actions, perhaps driven by selfinterest or social pressures. Introduction the roots of the upper echelons perspective lie in the.
Upper echelons theory predicts two moderating factors that would cause crosssectional variations in managerspecific effects. Servant leadership as a model for leading in the upper echelons. The upper echelons approach states that an organization is a reflection of its top executives. The organization as a reflection of its top managers. The leading entry of a nonzero row of a matrix is defined to be the leftmost nonzero entry in the row. However, hambrick 2007 stated in an update on his initial article on upper echelons theory, that the psychological and social processes by which executive profiles are converted into strategic choices still remain largely a mistery the proverbial black box p. Row echelon form and reduced row echelon form a nonzero row of a matrix is defined to be a row that does not contain all zeros. The organization as a reflection of its followership.
The top management team, formulation of corporate strategy. Examining upper echelons managers characteristics on. Social, behavioral, and cognitive influences on upper. This research examines individual contextual variables and the institutional environment in each league as they impact the. Upper echelons theory upper echelons theory was introduced by donald hambrick and phyllis mason in 1984 as an endeavor to synthesize the previously fragmented literatures from various fields about the characteristics of top managers around a more general upper echelons perspective. Gallen, school of management, economics, law, social sciences. Upper echelons theory conceptual framework that views organizational outcomes strategic choices and performance levels as reflections of the values of the members of the top management team level 5 leadership pyramid. To achieve this objective, we rely on upper echelons ue theory hambrick. Pdf external environment and upper echelons theory. Thus, according to the theory, organizations become reflections of their top executives. View upper echelons theory research papers on academia. This study integrates and extends the literature on upper echelons theory uet and institutional theory by investigating general manager gm strategic decision making in the north american professional sport context. Mason columbia university theorists in various fields have discussed characteristics of top manag ers.
The relationship between upper echelon diversity, the adoption of diversity practices, and organizational performance. Additionally, this theory argues that the attributes of a certain person affect the attitudes and preferences of top members and the group dynamics. The theory simply attributes the performance outcomes of firms to the characteristics of their top management teams and associates heterogeneity of the strategic behavior of firms with the cognitive and behavioral diversity of their managerial teams. Prime journal of business administration and management bam. At the invitation of the editor, i recap the amr article. Pdf in recent years, scholars have started to draw on upper echelons theory to analyze the relationship between the characteristics of top managers. In particular, we argue that the effectiveness of a gmm estimator depends on whether current characteristics of corporate. In particular, in four cumulative studiesthe dissertation explores.
Upper echelons theory uet is one of the mostresearched theories in organization and management literature. This short survey paper aims to give an overview of upper echelons theory and its current applications to management accounting and control research. Antecedents and consequences of top management team. According to contingency theory, organizations strategy is a function of the. Our findings extend research on upper echelons and organizational behavior in a number of ways. Upper echelons theory in management accounting and control. Endogeneity and the dynamics of upper echelons research. How has upper echelons theory uet hambrick and mason, 1984 been evolving over time. Upper echelons theory and research semantic scholar. It states that organizational outcomes are partially predicted by managerial background characteristics of the top level management team. The upper echelon theory u et explains this phenomenon in the behavioral finance study. Upper echelons theory has its roots in behavioural theory of the firm nielsen, 2010, which at its core centres on impacts of managers cognitions, values and perceptions on the strategic choices. The suggestion that leader characteristics should closely align with core business activity is empirically motivated.
Pdf upperechelons perspective reading list hallqvist. An upper echelons perspective on information technology business. The organization as a reflection of its top managers1 donald c. Pdf upper echelons theory in management accounting and. Thus, our study pertains not only to the literature on how upper echelons influence corporate strategy, but also provides a novel empirical lens on the increasingly important context of corporate philanthropy. We extend the existing research on upper echelons theory, which has. Thus, it seems promising to combine these variables, while complying. Top executives and the upper echelons perspective hambrick, d. Upper echelons theory herman major reference works. Though community can be defined in a number of ways, in this paper community means the. This study employs different methods pooled ols regression and fixed effects panel regression for the analysis.
In this section, i summarize the literature on upper echelons in. It is hoped that the result of this paper can fill the gap of the literature on the relationship between ceo personal characteristics and financial leverage as explained by upper echelon theory. Do ceos personal values affect employees innovative work. Tmt, provides new insights into the upper echelons research stream. The basic thought behind this theory is that the most powerful people in organizations are affected by. The upper echelons theory uet claims that firm performance, organizational change, strategy, and structure are influenced by managers and entrepreneurs experience and personal traits hambrick. Nov 30, 2017 this article calls for attention to the dynamic endogeneity problem in the upper echelons research on how characteristics of corporate elites affect firm strategy or performance and the application of generalized method of moments gmm estimator to address such a problem. This theory suggests that the attributes of managerial background are predictors of the outcomes. The upper echelons theory is a management theory published by donald c. This paper will look the upper echelon perspective and compare this view of leading with the servant leadership model. The definition of the upper echelon theory mainly states that, decisionmaking is based on the interpretations of the executives. The upper echelon theory connects the attributes of company performance and top management employee. Dec 18, 20 in recent years, scholars have started to draw on upper echelons theory to analyze the relationship between the characteristics of top managers and management accounting and control systems.
Upper echelons theory focuses on the characteristics of the top management team and especially the top executives who have great power to influence decision making of organizations. The paper shows that existing research consistently. The model depicts the main characteristics which may substantially influence smes managers decision on it adoption behaviour. The model proposes that both external and internal factors situational conditions can influence decisionmakers and their decision to adopt it. Through the historical discussion, this paper aims to provide an updated and also innovative from some aspects big picture on this famous approach to strategic management. Oct 22, 2019 researchers have long been interested in understanding the motives behind ceos actions. Managerial discretionnamely, the degree of influence that executives might exertis a fundamental enabler in upper echelons theory hambrick and mason, 1984 explaining not only whether managers matter but also when they do. The people in charge of an organization view opportunities, threats and alternatives through their own highly personalized lenses, because of their own past experiences, values, and overall personalities.
In viewing strategy, and in interpreting strategic possibilities, members of the organizations upper echelons inevitably do so through the lens of their through their. Upper echelons and their impact on internationalisation processes 2. Using the characteristics of small business managers to. This study integrates and extends the literature on upper echelons theory uet and institutional theory by.
Testing the upper echelons theory in the european context. Upper echelons theory states that top management team tmt members characteristics, including past experiences, values, and personalities, affect how they make strategic and organizational decisions. Organizations wishing to attract, retain, and benefit from diverse talent are often advised to. The upper echelons perspective holds that ceos take actions. A number of scholars have concluded that upper echelons findings, in particular in terms of the consequences of tmt heterogeneity, have been inconclusive. Thus, following upper echelons theory, the present paper aims to add to research on the determinants of public collaboration by examining the role of the characteristics of public managers. Do ceos matter to firm strategic actions and firm performance.
Manuscript upper echelons theory in management accounting. An upper echelons view of finance managers in family firms the main tenet of upper echelons theory is that top managers i. Hambrick the pennsylvania state university the central premise of upper echelons theory is that executives experiences, values, and personalities greatly influence their interpretations of the situations they face and, in turn, affect their choices. Upper echelons theory points to the key role of the top management team tmt in shaping work processes and in. This paper attempts to synthesize these previously fragmented literatures around a more general upper echelons perspective. In sum, we seek to bridge upper echelons theory with strategic renewal. Upper echelons and their impact on internationalisation.
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