| dc.description.abstract | Researchers have established that top executives affect company outcomes. This
finding is grounded on the top management teams demography research, which forms
the bulk of the extant literature in upper echelons theory. As the volume of research
linking top management teams and strategic outcome grows, so too does the call for
research that goes inside the “black box” of the upper echelons. The black box
criticism is so common in a majority of upper echelon studies that some researchers
encourage a moratorium on the use of demographic variables as surrogates for top
management team behavior. This study sought to contribute to knowledge by
departing from the demographic path to assess the effect of top management team
psychological characteristics on organizational performance, cognizant of the
probable role of institutional environment and team processes. The main objective of
the study was to establish the influence of institutional environment and team
processes on the relationship between top management team psychological
characteristics and organizational performance. The study‟s population consisted of
61 companies listed at Nairobi Securities Exchange and data was collected from 46
organizations. Data was analyzed and interpreted based on descriptive statistics,
multivariate regression analysis and structural equation modeling. The study revealed
on one hand, significant results for the effects of top management team psychological
characteristics on non-financial performance and on the other hand non-significant
results for the effects of top management team psychological characteristics on
earnings per share performance. Additionally, the study also revealed significant
results for the moderating role of institutional environment on top management team
psychological characteristics and performance relationship. In opening up the top
management team „black box‟, this study has provided an empirical foundation for
investigating the impact of top management team psychological characteristics on
organizational performance. The study has also made a unique contribution to the
academic literature arising from integration of upper echelon theory, group dynamics
theory, institutional theory and social psychology theory. The study has also made a
unique contribution to policy formulation and development in Kenya. Policy makers
will benefit in understanding how institutional forces in the Kenyan context impact
organizational performance and hence be guided in formulation of reforms in various
political, judicial and economic institutions. This research has given rise to several
new research avenues and practical implications such as the need to replicate this
study in different contexts in order for researchers to draw patterns showing effect of
top management team behavior on various organizational outcomes. One of the main
drawbacks of this study was that all the study‟s data except organizational earnings
per share were obtained through self-reporting measures, which are subjective in
nature. The reliance on primary data has the potential associated with sources of
systematic measurement error. Future studies could focus on using secondary data to
measure, for example, organizational non-financial performance. Secondly, the study
employed a cross sectional approach whereas a longitudinal approach would provide
for a longer time of study to observe relationships among study‟s variables. | en_US |
