The Effectiveness of Top Management Groups in Manufacturing Organisations

J Dawson, Stephen Nickell, M Patterson and M West

CEP Discussion Papers from Centre for Economic Performance, LSE

Abstract: We test whether demographic characteristics and team processes in top management teams predict the subsequent productivity and profitability of their companies in 42 UK manufacturing organisation. The results that there are independent effects of both demographic characteristics and team processes. Team member mean educational level and team tenure both predict the subsequent productivity and profitability of the companies positively, while age diversity in the team is a negative predictor of company performance. Team processes (clarity of and commitment to objectives, participation, task orientation, and support for innovation) predict (positively) company performance. Only mean educational level, of the demographic variables, also predicts team processes, suggesting that the effects of demographic variables on company performance are not strongly mediated by team processes. The implications of these findings for the composition and development of top management teams are discussed.

Date: 1999-11
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Working Paper: The effectiveness of top management groups in manufacturing organisations (1999)
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