Recent research has focused on the importance of managerial cognition, and resonates with extant literature on the effect of executive succession and top management team turnover on firm performance. In this study, we dwell deeper into the subject by examining the impact of industry origin of new TMT members on firm growth, and the moderating effect on this relationship of existing TMT members experience in the focal industry. We test our hypotheses in the context of the US cellular phone service providers industry from 1983 to 1999. We find that first time TMT members that have experience outside the focal industry have a positive influence on the firm’s performance, while the reverse is true for first time TMT members with experience within the focal industry. However, within industry experience of existing TMT members positively moderates this relationship.
The effect of industry origins and experience of top management teams on firm growth
WILLIAMS, FREDERICK CHARLES;
2009
Abstract
Recent research has focused on the importance of managerial cognition, and resonates with extant literature on the effect of executive succession and top management team turnover on firm performance. In this study, we dwell deeper into the subject by examining the impact of industry origin of new TMT members on firm growth, and the moderating effect on this relationship of existing TMT members experience in the focal industry. We test our hypotheses in the context of the US cellular phone service providers industry from 1983 to 1999. We find that first time TMT members that have experience outside the focal industry have a positive influence on the firm’s performance, while the reverse is true for first time TMT members with experience within the focal industry. However, within industry experience of existing TMT members positively moderates this relationship.
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