The Impact of Top Management Team Demographic Characteristics on Firm Performance: A Case of Marketing and Social Research Association (MSRA) Firms in Kenya

Tecle H. Yohannes, Aloys B. Ayako and Danson Musyoki

International Journal of Management Sciences, 2016, vol. 7, issue 2, 44-61

Abstract: This study investigated the relationship between Top Management Team (TMT) demographic characteristics diversity and firm performance using control variables (firm size and TMT size) in the Marketing and Social Research Association (MSRA) firms in Kenya. The study estimated two relationships at the same time to address the research objectives. First, the relationship between TMT characteristics diversity and performance was analyzed. Second, the link between control variables and firm performance was assessed to evaluate the impact of TMT on firm performance. Mixed methods research design was used to critically investigate the relationship between the variables of this study. The mixed research design used in the study was triangulation design, which is mainly transformation design model. The pooled data were analyzed using structural equation modeling in AMOS software program. The study found out that demographic diversities within top management team members had statistically significant influence on firm performance (P = 000). Besides, control variables showed a statistically significant positive relationship to firm performance (P = 0.024). The findings of this study implied that organizations need to know and develop the best composition of top management team based on their demography diversity attributes in relation to the organizational type or environment. Besides, the organizations need to empower the TMT members using monetary and nonmonetary incentives to further improve performance. Last but not least, gender diversity should be considered in the composition of TMT.

Keywords: Performance; Demographic characteristics; Top management team (search for similar items in EconPapers)
Date: 2016
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