A dynamic model of top management team effectiveness

Leadership research relating top management team demographics to firm performance has produced mixed empirical results. This paper suggests a new explanation for these inconsistencies. We first note that a given top management team (TMT) is likely to face a variety of different situations over time. Thus, while TMT demographic composition is relatively stable, the TMT task is dynamic and variable. In some situations, team members have similar information and interests ( a symmetric distribution); in others, information or interests diverge ( an asymmetric distribution). Based on team effectiveness theory, we then argue that, unless group process is managed accordingly, asymmetric distributions of situation-specific information and interests will reduce TMT decision-making effectiveness. We develop leader process choices to mitigate the potentially harmful effect of these asymmetries. These arguments form the basis of a theoretical model of TMT effectiveness that integrates insights from research on leadership, group decision-making, team effectiveness, and negotiation, and has practical implications for how leaders of senior teams can improve team effectiveness through appropriate process choices.