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top management team and performance

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Composition of the Top ManagementTeam and Firm InternationalDiversificationLaszlo TihanyiUniversity of OklahomaAlan E.EllstrandUniversity of ArkansasCatherine M.DailyDan R.DaltonIndiana UniversityThis study investigates the impact of various top management teamcharacteristics on firm international diversification.Relying on datafrom 126firms in the electronics industry,we find that certain topmanagement team characteristics are related to international expan-sion.Specifically,results indicate that lower average age,higher aver-age tenure,higher average elite education,higher average interna-tional experience,and higher tenure heterogeneity are associated withfirm international diversification.The study reinforces the importance oftop management team composition in internationalization decisions andsuggests further research in this context.©2000Elsevier Science Inc.All rights reserved.Establishing international markets is one of the most important challenges firms face,especially during the growth phase.The advantages of international expansion have been outlined in the internationalization literature (e.g.,Hymer,1976;McKiernan,1992;Rugman,1981;Vernon,1966).Notably,however,recent empirical research suggests that there are potential threats associated with the internationalization process as well (Hitt,Hoskisson,&Kim,1997;Mitchell,Shaver,&Yeung,1992).Various aspects of international operations,such as entry mode,ownership mode,collaboration,competition,cultural differences,and organizational implications,have been studied extensively.Although many of these studies acknowledge the importance of corporate executives in the interna-tionalization process,relatively little research has focused specifically on the role of top management teams in the decision to internationalize.Direct all correspondence to:Laszlo Tihanyi,Division of Management,Michael F.Price College of Business,University of Oklahoma,307West Brooks,Norman,OK 73019-4006;e-mail:Ͻltihanyi@ Ͼ.Journal of Management2000,Vol.26,No.6,1157–1177Copyright ©2000by Elsevier Science Inc.0149-206311571158L.TIHANYI ET AL.There is an increasing research effort in the management literature dedicated to better understanding the role of top management teams.A stream of research, largely originating from Hambrick and Mason’s(1984)upper echelons perspec-tive,has investigated the role of top management teams in important organiza-tional decisions(e.g.,Bantel&Jackson,1989;Finkelstein&Hambrick,1990; Hambrick,Cho,&Chen,1996;Murray,1989).The research reported here extends this stream of research by focusing on the relationship between top management team characteristics andfirm international diversification.We focus on the electronics industry during its initial international expansion in the mid-1980s.During this period American corporations significantly in-creased their international business operations.For example,the value of foreign firms acquired by U.S.firms during the1980s was ten times the level of foreign acquisitions during the1970s.Markides and Ittner(1994)found that a significant portion of thesefirms had no prior international operations.The majority of foreign acquisitions during the1980s were noted in the manufacturing sector.Among U.S.manufacturingfirms,the electronics industry, along with the food and pharmaceutical industries,reported the greatest amount of foreign acquisition activity during the period(Markides&Ittner,1994). International diversification provided new opportunities for electronicsfirms as they emerged from the turmoil that the industry endured during the recession of the early1980s.From1985to1987,foreign sales as a percentage of total sales for leadingfirms in the electronics industry increased from14%of sales to24.7%of sales (Electronic Business,1988),an expansion of76.4%.As an electronics industry analyst noted at that time“panies that have recognized the importance of foreign markets...stand ready to prosper....[C]ompanies that have ignored overseas markets will pay the price”(Electronic Business,1986:87).The purpose of this study is to extend previous work on the nature of the relationship between the composition of top management andfirm international diversification.By examining the demographic traits of top management teams (e.g.,age,tenure,education,elite education,international experience),as well as team heterogeneity,we hope to gain additional insights into the characteristics of top management teams that were proactive in leading theirfirms into international markets.We employ a multidimensional measure of international diversification as our dependent variable.To avoid potential confounds,we focus our study on a single industry during a period of rapid internationalization.The following sections include a review of prior research on international diversification and top management teams, conceptual linkages among top management team characteristics and the degree of international diversification,the research design and methodology on which we rely, the results of the research,and implications for future research.BackgroundInternational DiversificationCorporate executives consider the diversification of business activities across national borders to be a complex strategic decision.The complexity associated with geographic diversification decisions may be due,in part,to the increased JOURNAL OF MANAGEMENT,VOL.26,NO.6,2000opportunities and threats that executives encounter in international markets.Whereas there is agreement in the literature that international diversification affects firms,empirical results have been mixed on the specific direction of these influences (Hitt et al.,1997;Tallman &Li,1996).An extensive body of research suggests that international diversification provides firms significant benefits.Advantages associated with internationaliza-tion are illustrated by studies on foreign direct investment (Dunning,1988;Hymer,1976),international product life cycle models (McKiernan,1992;Vernon,1966),oligopolistic competition (Caves,1996;Kindleberger,1969),and the operations of multinational firms (Grant,1987;Hennart,1982;Rugman,1981).Empirical findings indicate that international diversification produces higher firm performance than domestic product diversification (Hitt,Hoskisson,&Ireland,1994;Kim,Hwang,&Burgers,1993).Additionally,Hughes,Longue and Sweeney (1975)found that multinational corporations provided higher returns than did domestic firms.Studies have also documented higher risk-adjusted returns for multinational,as compared to domestic,firms (Lessard,1973;Rug-man,1976).International diversification,however,is not without risk.International ex-posure increases the level of uncertainty business face in their domestic markets.Misunderstanding factors such as consumer tastes,regulations,retaliation from local and multinational players,or access to distribution,may result in damaging and costly mistakes (Mitchell et al.,1992).Increased international diversification may also lead to organizational problems.Due to increased size and complexity,multinational companies may have higher monitoring costs than domestic firms (Fatemi,1984;Geringer,Beamish,&daCosta,1989).Studies have also demonstrated that there are performance declines associ-ated with increased international diversification.Michel and Shaked (1986),for example,found performance to be higher for domestic firms than for multina-tional firms.A study by Collins (1990)reported that multinational firms with developing country operations had lower performance than domestic firms and multinationals with developed country operations.However,this study did not find performance differences between the latter two groups.Geringer et al.(1989)suggest that the relationship between international diversification and firm performance may be curvilinear.These researchers pro-posed that higher levels of international diversification were associated with performance declines.Consistent with the propositions of Geringer et al.(1989),Hitt et al.(1997)noted that the eventual performance decline might be due to the increased complexity of international operations.Although there are conflicting research findings,there seems to be an agreement in the literature that international diversification decisions may influ-ence firm performance.As a result,international diversification may be of interest to corporate executives.Research examining the decision-making processes within multinational companies has contributed significantly to our understanding of internationalization decisions.Building on findings in other areas of manage-ment (e.g.,Bower,1970;Tushman &Romanelli,1985),the “process school of internationalization”focused on the decision making of top management teams in1159INTERNATIONAL DIVERSIFICATION FROM MANAGEMENT JOURNAL OF MANAGEMENT,VOL.26,NO.6,20001160L.TIHANYI ET AL.international markets(Bartlett&Ghoshal,1987;Doz&Prahalad,1984;Hamel& Prahalad,1989;Malnight,1995;Prahalad&Bettis,1986).To better understand how executives deal with uncertainties in international markets,some recent studies have focused on the characteristics of top manage-ment teams(Athanassiou&Nigh,1999;Sambharya,1996;Wiersema&Bird, 1993).Although these studies examined top management teams in different roles, they seem to agree that,through their decisions,the characteristics of these decision-making bodies may have an effect on organizational success.The present study aims to extend our understanding of the factors that influence international diversification by focusing on the role of the top management team in expanding international operations.Specifically,we examine the composition of the top management team to consider whether particular demographic characteristics are associated with international diversification.Top Management TeamsIn recent years,management researchers have placed an increased emphasis on investigating the influence of management on corporate performance(Thomas, 1988).An important focus of this research has been to examine the linkages between the characteristics of top organizational managers and a variety of organizational outcomes(Bantel,1993;Michel&Hambrick,1992;Wiersema& Bantel,1992).This trend has emerged as a result of two important theoretical developments in organizational studies.Thefirst development was the concept of the dominant coalition,suggested by Cyert and March(1963),which shifted the level of analysis employed in studies of organizational leadership from the individual(CEO)to the entire team of top managers.The second development is the increased emphasis on employing observable demographic characteristics (e.g.,age,tenure,experience)in organizational research and exploring the rela-tionship between these characteristics and organizational outcomes(e.g.,Pfeffer, 1983).The dominant coalition concept and demographic research were united in the seminal work of Hambrick and Mason(1984).They proposed that specific organizational outcomes are associated with top management teams possessing particular demographic profiles.At the heart of this upper echelons perspective is the belief that the background,experiences and values of corporate executives influence important strategic decisions enacted by these key corporate actors. They also suggested that observable characteristics such as age,tenure and functional experience might serve as useful proxies for the cognitive base that guides top executive decisions.This demographic approach,however,has recently been criticized(cf., Aldrich,1979;Lawrence,1997;Pettigrew,1992).The central concern is the need to access the“black box”that may provide the operative mechanism linking demographic factors and organizational outcomes(e.g.,Finkelstein&Hambrick, 1996).Pettigrew,for example,suggested that little is known about“the processes by which top teams go about their tasks”(1992:178).Lawrence(1997)noted that demographic variables are often used as proxies for subjective concepts.She observed that researchers relying on the demographic approach apply a congru-JOURNAL OF MANAGEMENT,VOL.26,NO.6,2000ence assumption in which demographic variables are used to represent subjective concepts without providing a rationale for why this is a valid approach.Recent research exploring team demography and processes has,in fact,provided valuable insights into the reported “black box.”Smith et al.(1994),for example,found that top management team demography was indirectly related to performance through intervening process variables including social integration and communication.Pelled,Eisenhardt,and Xin (1999)found that team demo-graphic diversity influenced conflict,which in turn,influenced group perfor-mance.These researchers also found that these relationships were further mod-erated by task routineness and group longevity.In a computer simulation study,Carroll and Harrison (1998)found that tenure heterogeneity in an organization or team was positively related to the organization’s cultural heterogeneity.They also noted that various social processes underlie this relationship.Although there are limitations inherent in any approach,we would note that there is a stream of research relying exclusively or primarily on top management team demographic variables that has yielded significant findings.These studies have largely focused on two dimensions of team composition.The first set of studies is focused on the influence of demographic traits on organizational outcomes and is based on the belief that specific demographic characteristics are associated with executive perceptions that ultimately lead to certain actions and outcomes.Several of these studies identified significant relationships between top management team demographic characteristics and corporate strategies (Bantel,1993;Bantel &Jackson,1989;Finkelstein &Hambrick,1990;Wiersema &Bantel,1992).Other researchers found associations between top management team demographic characteristics and corporate performance (Finkelstein &Hambrick,1990;Haleblian &Finkelstein,1993;Smith,Smith,Olian,Sims,O’Bannon,&Scully,1994).A second stream of research in this area examined the effects of top management team heterogeneity.Studies have identified significant relationships between various measures of heterogeneity and corporate strategic outcomes (Bantel,1993;Bantel &Jackson,1989;Hambrick et al.,1996;Lant,Milliken,&Batra,1992;Wiersema &Bantel,1992).In addition,researchers have established an association between top management team heterogeneity and corporate per-formance (Hambrick et al.,1996;Keck,1997;Murray,1989).Extensions of the upper echelon perspective into the international context have been limited.Wiersema and Bird (1993)examined the influence of the demographic characteristics of top managers in 40large Japanese firms on top management team turnover.Their findings indicated that Japanese firms with more heterogeneous top management teams (based on age,team tenure and educational prestige)had higher levels of management turnover.These results were stronger than results for similar U.S.firms.Sambharya (1996)examined the influence of executives’international experience on international involvement in large multinational corporations and found that top management teams with a higher mean foreign experience and greater heterogeneity of foreign experience were associated with the firm’s international involvement.In a recent study,Athanassiou and Nigh (1999)found that the extent of a firm’s internationalization1161INTERNATIONAL DIVERSIFICATION FROM MANAGEMENT JOURNAL OF MANAGEMENT,VOL.26,NO.6,20001162L.TIHANYI ET AL.was related to the top management team’s international business advice network density.In light of thesefindings,there seems to be continued promise in reliance on the demographic approach(e.g.,Finkelstein&Hambrick,1996).As noted by Lawrence,demographic variables have desirable properties,“thus providing high content validity and replicability which is an important consideration in afield where replication is all too infrequent”(1997:16).Furthermore,Pfeffer(1983) has suggested that the use of observable managerial characteristics may help to address the limitations associated with subjective research that often includes measurement error,differences in conceptualizations and low levels of explained variance.This sentiment is mirrored by Finkelstein and Hambrick(1996:47)who noted,“...an executive’s tenure in thefirm is open to essentially no measurement error.”Moreover,in response to the limitations of reliance on psychological,as compared to demographic,variables,Finkelstein and Hambrick(1996)observed that demographic variables are far more accessible to researchers,as top execu-tives are typically unwilling to“submit to batteries of psychological tests”(p.46).The decision thatfirms makes to expand into international markets is a consequential judgment that requires careful review and consideration of a vast array of complex environmental factors.Extending the demographic approach into the study offirms’international business activity may lead to better under-standing of the role of the top management team in international diversification. In the following section we develop specific hypotheses that examine the rela-tionships between top management team demography and heterogeneity andfirm international diversification.Hypothesis DevelopmentThis study includes examination offive demographic variables:age,educa-tion,functional background,international experience,and tenure on the top management team.We examined the influence of demographic traits as well as team heterogeneity,as both have been shown to relate to specific corporate outcomes(Bantel,1993).Previous research suggests that these selected demo-graphic measures may be valid proxies for attitudes about international diversi-fication decisions.Demographic TraitsAverage age.Prior research has demonstrated that younger managers are associated with greater strategic change(Wiersema&Bantel,1992).Based on thesefindings,older executives may be less willing to adapt to new ideas or behaviors(Bantel&Jackson,1989).In addition,older executives may be at a stage in their careers wherefinancial security is important and risk-taking behav-iors may be seen as a threat to that security(Wiersema&Bantel,1992).Finally, older managers may have a greater stake in supporting the status quo,as it reflects the strategies they adopted over the years(Hambrick&Mason,1984).The complexity and risk associated with international expansion may repre-sent a formidable challenge to top executives.Such a strategic initiative may be JOURNAL OF MANAGEMENT,VOL.26,NO.6,2000more attractive to younger,energetic managers willing to accept the risk associ-ated with global expansion in exchange for the potential reward of career ad-vancement.As Hambrick and Mason note,younger managers may be more oriented toward “attempting the novel,the unprecedented,taking risks”(1984:198).Therefore:H1:Higher average age of the top management team will be nega-tively related to the degree of the firm’s international diversification.Average top management team tenure.Tenure within a group is an important determinant of group process.Increased tenure is associated with stability,reduced conflict and superior communication (Katz,1982).In addition,Michel and Hambrick (1992)suggest that longer tenure on the top management team may be associated with social cohesion and shared cognitive structures.These team attributes may enhance socialization and lead to better firm perfor-mance (Carroll &Harrison,1998,Smith et al.1994).Other researchers,however,argue that executive team tenure may also be associated with negative effects (Keck,1997).Executives who serve together for extended periods of time may tend to develop similar views since the long-term acculturation of team members may lead to a common perspective or corporate paradigm (Pfeffer,1983).This can result in dysfunctional decision processes including “groupthink,”a collective pattern of defensive avoidance (Janis &Mann,1977;Keck,1997).Still,due to the complex and uncertain nature of international diversification decisions,a shared understanding of the international environment may be criti-cal.Executives with longer tenure on the top management team may develop more accurate shared cognitive structures about new environments.Additionally,longer tenure may provide the opportunity for team members to better assess firm capabilities suitable for international diversification.Therefore:H2:Higher average tenure of the top management team will be posi-tively related to the degree of the firm’s international diversification.Elite cation provides another important dimension that helps shape an individual’s cognitive base (Hambrick &Mason,1984).Recent research has suggested a unique influence associated with an elite education.Finkelstein,in his study of power in top management teams,stated that “atten-dance at certain schools carries with it an aura of prominence”(1992:516),and suggests that managers with elite educational credentials may enjoy enhanced prestige.Central to this research is the concept that elite educational institutions provide their students with more than just a formal education.As Domhoff notes,“elite educational institutions are instrumental in transmitting the mentality and lifestyle that exists within the upper class”(1983:24).Students attending such institutions are exposed to specific vocabulary,styles of dress,esthetic tastes,beliefs and values.The values associated with such a program may encourage students to have a more open-minded attitude toward other cultures (Domhoff,1983).Elite institutions may also provide students with unique international1163INTERNATIONAL DIVERSIFICATION FROM MANAGEMENT JOURNAL OF MANAGEMENT,VOL.26,NO.6,20001164L.TIHANYI ET AL.educational experiences and the opportunity to meet other elites from diverse international backgrounds.Thus,executives with an elite educational background may be more aware of international issues and may be more inclined to view international opportunities favorably.Therefore,H3:There will be a positive association between the average level ofelite education on the top management team and the degree of thefirm’sinternational diversification.International experience.Perlmutter(1969)suggested that international firms evolve through stages as they increase their international presence.In the early stages of international expansion,firms hold an ethnocentric orientation in which they possess the belief that home country practices should be used in all international operations.Asfirms increase their international experience,they gain a geocentric perspective,an approach that seeks to integrate diverse areas of the world through a global decision making process.Geocentrism has been associated with expansion into international markets as well as success in export operations(Dichtl,Koeglmayr,&Mueller,1990;Kobrin,1994).Perlmutter (1969)noted that international assignments provide an important foundation for building a geocentric corporate orientation.More recently,Sambharya(1996) found that international experience among top executives might be an important determinant of international involvement.International assignments may be associated with a higher degree of inter-national diversification for several reasons.First,international assignments pro-vide executives with afirst-hand awareness of opportunities in overseas markets. In addition,international experience helps executives to reduce the anxiety and complexity associated with operating under conditions of greater uncertainty (Sambharya,1996).Finally,while on international assignments,managers may make contacts that will be useful in facilitating future international ventures. Thus,international experience may be vital to afirm’s international expansion. Therefore:H4:There will be a positive association between the average level ofinternational experience on the top management team and the degree ofthefirm’s international diversification.Team heterogeneity.Age heterogeneity may play an important role in influencing strategic decision-making.Different age cohorts experience different environmental events that have an important influence on shaping executives’attitudes and beliefs(Bantel&Jackson,1989).Noting that managers may have an influence on top management team demography through recruitment,Lawrence (1997)suggested that executives’perceptions of their own age in relation to others might influence decision-making processes.Age diversity should encour-age the exchange of a wide variety of viewpoints that can lead to greater acceptance of change.This diversity of opinion might be particularly useful in the international arena where the environment is especially complex.JOURNAL OF MANAGEMENT,VOL.26,NO.6,2000The rationale concerning the heterogeneity of age cohorts may also apply to diversity of tenure on the top management team.Although teams that feature tenure homogeneity may reflect lower levels of conflict and better communication patterns,these teams might also lack the healthy diversity of perspectives that can stimulate more insightful discussion of international options (Bantel &Jackson,1989;Priem,1990).Top management teams composed of executives who have widely differing amounts of team tenure may possess a wealth of diverse beliefs based on both societal as well as organizational experiences (Smith et al.,1994).Prior research suggests that educational background influences strategic decision making processes and outcomes (Hitt &Tyler,1991).In our study,we focus on the diversity of educational specialization to consider the influence of education.Curriculum choices have been found to be associated with individual personalities,attitudes and cognitive styles (Wiersema &Bantel,1992).In con-sidering a complex issue such as international diversification,a top management team with executives representing a broad and diverse educational base may be better equipped to deal with the wide range of relevant issues that must be considered.In addition to educational background,work experience in functional areas has an important influence in shaping an executive’s cognitive base (Bantel &Jackson,1989).As Hambrick and Mason stated “...functional-track orientation may not dominate the strategic choices an executive makes,but it can be expected to exert some influence”(1984:199).Functional background has been found to significantly influence executives’analytical and decision making perspectives (Wiersema &Bantel,1992).Top management teams with a broader functional background will be better able to deal with environmental complexities (Finkel-stein,1992).Top management teams with greater diversity of age,tenure,education or functional background may possess a more diverse set of values,experiences and beliefs.A broad base of experience can be effective in reducing some of the uncertainty associated with international expansion.Team heterogeneity might lead to more creativity and enhanced adaptability on the part of strategic decision-makers (Murray,1989).Priem (1990)suggested that team heterogeneity also leads to lower levels of consensus.He notes that consensus may be associated with higher levels of performance in dynamic environments.Additionally,Har-rison,Price,and Bell (1998)found that the influences of demographic character-istics of team heterogeneity are reduced by interpersonal interactions over time.Due to the breadth of issues relevant to international expansion,as well as the complexity of the problems encountered in expanding into international markets,top management teams with a diverse base may be better equipped to guide the firm into new foreign markets.Therefore,H5a:There will be a positive association between heterogeneityamong the top management team with respect to age and the degree ofthe firm’s international diversification.H5b:There will be a positive association between heterogeneity1165INTERNATIONAL DIVERSIFICATION FROM MANAGEMENT JOURNAL OF MANAGEMENT,VOL.26,NO.6,2000。

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公司管理制度 英语

公司管理制度 英语

公司管理制度英语1. IntroductionThe company management policy outlines the guidelines and rules for the effective and efficient management of the company. This policy applies to all employees, managers, and stakeholders of the company and is designed to ensure the smooth operation and growth of the business.2. Company StructureThe company follows a hierarchical organizational structure with clear lines of authority and responsibility. The top-level management consists of the CEO, followed by the executive team, department heads, managers, and employees. This structure is designed to provide clear direction and accountability for all employees.3. Decision MakingAll decisions within the company are made based on consensus and consultation with relevant stakeholders. The executive team is responsible for major decisions affecting the future direction of the company, while department heads and managers are responsible for decisions related to their respective areas of work.4. CommunicationOpen and transparent communication is encouraged at all levels of the company. Managers are responsible for ensuring that employees are informed about company policies, goals, and any changes that may affect their work. Employees are also encouraged to provide feedback and suggestions for improvement through regular feedback sessions and surveys.5. LeadershipManagers are expected to demonstrate strong leadership qualities and lead by example. They are responsible for setting clear goals and expectations for their teams, providing guidance and support, and promoting a positive work culture. The company values inclusivity, diversity, and fairness in its leadership practices.6. Performance ManagementThe company follows a performance-based management system to evaluate the performance of employees. This includes regular performance reviews, goal setting, and feedback sessions to help employees grow and develop in their roles. Recognizing and rewarding high-performing employees is also an important aspect of the company's performance management system.7. Employee DevelopmentThe company is committed to the professional development of its employees. This includes providing training, mentoring, and career growth opportunities to help employees enhance their skills and advance in their careers. The company also supports continued education and learning through various programs and initiatives.8. Work EnvironmentThe company strives to provide a safe, healthy, and inclusive work environment for all employees. This includes compliance with all relevant labor laws and regulations, providing necessary safety equipment and training, and promoting a culture of respect and tolerance among employees. The company also encourages work-life balance and provides flexible work options when feasible.9. Ethical ConductThe company expects all employees to conduct themselves with the highest ethical standards in all their professional activities. This includes honesty, integrity, and respect in dealing with colleagues, clients, and stakeholders. Any unethical behavior or misconduct will not be tolerated and may result in disciplinary action.10. Conflict ResolutionThe company has a clear procedure for resolving conflicts and disputes among employees. Managers are responsible for addressing conflicts within their teams, and the HR department is available to provide mediation and support as needed. The company is committed to fostering a positive and collaborative work environment where differences are addressed and resolved constructively.11. Compliance and Risk ManagementThe company is committed to complying with all applicable laws and regulations in the countries and jurisdictions where it operates. This includes adherence to labor laws, tax regulations, environmental standards, and other legal requirements. The company also has a risk management system in place to identify, assess, and mitigate potential risks that may affect its operations.12. Continuous ImprovementThe company is committed to continuous improvement and innovation in all aspects of its business. This includes seeking feedback from employees, clients, and stakeholders to identify areas for improvement, investing in technology and infrastructure to optimize operations, and staying updated on industry trends and best practices.13. ConclusionThe company management policy is designed to provide a clear framework for managing the company's operations and guiding its employees. It outlines the company's commitmentto ethical conduct, employee development, and a positive work environment, and serves as a guide for the company's continued growth and success.。

Buildingsuccessfulleaders如何成为优秀的领导者

Buildingsuccessfulleaders如何成为优秀的领导者


Three Basic Kinds of Chang
• Shock Change -Unexpected, Often Unwelcome -Catch's you off-guard
• Evolutionary Change -Gradual -Incremental -You can prepare and plan
You will give up faster if you are not in control
• Transitions Things do not change, we change
Beginnings
New commitment
Transitions
Time of uncertainty between the old and new reality
Tool: Force –field analysis
• Force-field analysis
Helping
Hindering
Desired
BSL(II)---Time management
•We have talked before. Critical
• Pressing • (Urgent)
Gaining Control
B. GAINING CONTROL OF YOUR MANAGER RELATIONSHIP
• Make Sure You Understand Your Manager. • Assess Yourself and Your Needs. • Develop and Maintain a Relationship. • Saying No.
objectives of the change process Written documents) • Address the individual needs of those who will impacted by
Entrepreneurial teams_definition and derterminants

Entrepreneurial teams_definition and derterminants

ENTREPRENEURIAL TEAMS: DEFINITION AND DETERMINANTSLeon Schjoedt (Student)University of Colorado at BoulderLeeds School of BusinessManagement DivisionCampus Box 419Boulder, CO 80309-0419Phone: (303) 492-1175Fax: (303) 492-5962E-mail: Leon.Schjoedt@Acknowledgment:This author acknowledges the constructive comments made byG. Dale Meyer, Julio DeCastro, David Balkin, and Kelly Norrish.A Price Institute Ph.D. Entrepreneurial Fellowship provided funding for this research. ABSTRACTStressing a conceptual approach to the subject of entrepreneurial teams, this paper suggests a comprehensive definition of entrepreneurial teams. Then, entrepreneurial teams and their effectiveness are linked to venture performance. The concept of entrepreneurial team effectiveness is analyzed and discussed based on its antecedents - the environment, power and politics, communication, team composition, and demographic characteristics. The paper especially argues that considerations of entrepreneurial team composition need to include cognitive characteristics. Based on Jung’s four archetypes, it is suggested that the lack of any of the four cognitive types limits the entrepreneurial team’s effectiveness and, in turn, venture performance.INTRODUCTIONCreating a new venture is not easy, especially when considering the amount of information, skills, capabilities, and knowledge it takes to make a venture successful. Research has shown that teams start a significant number of new ventures, or a team is created within the first years of start up (Kamm, Shuman, Seeger, & Nurick, 1990; Watson, Ponthieu, & Critelli, 1995), and researchers have established that there isa strong association between venture success and team created ventures (e.g., Eisenhardt & Schoonhoven, 1990). Also, research on top management found that the executive team has a greater influence on the organizational performance than the individual executive (Hambrick & Mason, 1984; O’Reilly, Snyder, & Boothe, 1993). Therefore, the quality and composition of the team is a critical determinant of organizational performance (Glick, Miller, & Huber, 1993; Hambrick, 1994). Venture capital firms rarely consider venture proposals based on individual entrepreneurs,but favor proposals from team based ventures (Kamm et al., 1990) because team based ventures, overall, have a better track record (Timmons, 1994). In sum, as Cooper and Daily (1997:144) phrase it “Entrepreneurial teams are at the heart of any new venture.”Because team based ventures outperform single-entrepreneur-ventures (Cooper & Bruno, 1977), entrepreneurial teams (ET) become an interesting topic for research. It is, therefore, expected that a significant partof the literature has dealt with the topic of ET. However, this is not the case. Most of the literature has focused on the individual entrepreneur (Watson et al., 1995). This calls for research on the ET, determinants of ET effectiveness, and ET’s impact on venture performance. This paper is a contribution to the field of entrepreneurship because it will: define ET, link ET to venture performance, and develop propositions on determinants of ET effectiveness for future research. ENTREPRENEURIAL TEAMSThe research that has been done on ET has not established a definition of an ET, as with the case for top management teams (O’Reilly, et al., 1993). Hambrick (1994) discusses how the top management team is not a team per se but a group of people with management responsibilities. Robbins (1993:285) defines groups as, “Two or more individuals, interacting and interdependent, who have come together to achieve particular objectives.” According to Cooper and Daily (1997), an ET is more than a group because it involves a shared commitment to the new venture, but they stop short of defining what “shared commitment” is. Katzenbach (1997) suggests that what must be shared is the accountability. Whereas Kamm et al. (1990) suggest that the “shared commitment” is equity or financial interest in the new venture by saying that an ET is two or more individuals who together establish a venture where they have equity interests. In 1993, Kamm and Nurick (1993) refined the definition of ET to two of more people who formally establish a new venture in which they share ownership.Teams have been defined recently by Cohen and Bailey (1997) as a group of individuals who share interdependent tasks and outcomes for these tasks, and are also seen by themselves and others as a social unit. This definition is usable for the purpose of defining ET, especially when Eisenhardt and Schoonhoven’s (1990) contribution in defining ET is considered: a group of people holding full-time executive positions at the time of founding. Building on all these perspectives, the following definition of ETis suggested and will be used for this paper.An entrepreneurial team consists of two or more persons who have an interest, both financial and otherwise, in and commitment to the venture’s future and success; whose work is interdependent in the pursuit of common goals and venture success; who are accountable to the entrepreneurial team and for the venture; who are considered to be at the executive level with executive responsibility in the early phases of the venture, including founding and pre-start up; and who are seen as a social entity by themselves and by others.As this definition suggests, it is not necessary to be in the pre-start up or founding phases of the venture to be a part of the ET. It is possible for a person to be considered a part of the ET if the person is brought into the venture in the early phases to help establish the venture.The definition also emphasizes interdependent tasks is the pursuit of common goals, etc. This does not mean that tasks have to be performed by all team members (Katzenbach, 1997). It means that tasks can be performed by individuals in the ET, in sub-groups of the ET (and with others outside the ET), or by the entire ET, but the tasks all contribute to the common goals of the ET and the future success of the venture.It is the tasks that are interdependent.The definition also emphasizes that the ET should be seen by themselves and by othersas a social entity. This means the ET is not formed based on titles or otherwise, but is formed based on a shared commitment to each other as participants in the ET and to the ET as an entity. This shared commitment will show itself in the venture performance.ENTREPRENEURIAL TEAMS AND VENTURE PERFORMANCE Performance measures have typically beenin the form of accounting data, e.g., returnon investment. Two significant problems exist with accounting measures, first, they are based on history and, second, they are not forward looking (Chakravarthy, 1986). Because accounting measures are based on history, they are not useful for new ventures that do not have a past. The history-based accounting measures cannot assist the ET in assessing if the (strategic) venture goals have been met and whether the venture has been successful.Despite these two major problems with accounting based measures, the literature has used accounting measures to assess venture performance (e.g., O’Reilly et al., 1993), such as growth in revenues and profitability (Kamm et al., 1990; Chandler & Hanks, 1993). However, these measures assume that the goals of all ventures include revenue and profitability growth. Some ventures may have other goals, such as life-style ventures. Other researchers have used a measure based on failure, marginal survival, and growth (Cooper, Gimeno-Gascon, & Woo, 1994). This measure may be better. However it does not measure the success-rate of meeting the venture’s performance targets, nor whether these are met on time. Also, the three-part measure, suggested by Cooper and associates, does not take into account that not all ventures are targeting growth, nor that the venture may be harvested. The shortcoming of the measures used in the literature does not truly indicate whether a venture has been successful or not. Also, the lack of consistency (Murphy, Trailer, & Hill, 1996) in measures used has added to the fragmented and contradicting results of venture research.Despite the deficiencies in the measurement of venture performance, the literature has been able to consistently determine that the ET has a significant impact on venture performance (Cooper & Bruno, 1977; Kamm et al., 1990; Jackson, 1992; O’Reilly et al., 1993; Watson et al., 1995; Hambrick, Cho, & Chen, 1996; & Cooper & Daily, 1997). This explains why Hambrick and Mason (1984) contended that a venture is a reflection of its ET. This discussion leads to proposition one:P1: Venture performance is dependent on the entrepreneurial team’s effectiveness. Proposition one suggests that venture performance is specific to the venture (Rumelt, 1991) and that the ET is of vital importance, indicating that performance at one organizational level affects the performance at higher organizational levels (Cohen & Bailey, 1997). Since the ETaffects the venture performance and the EThas little more than its members to establishthe venture, set goals, and meet these goals,the ET effectiveness and, especially, what determines ET effectiveness need more consideration.DETERMINANTS OF ENTREPRE-NEURIAL TEAM EFFECTIVENESSThe ET interprets and responds to the external environment, as well as managesthe venture internally (Jackson, 1992; O’Reilly et al., 1993). This shows that theET has a dual and complex function. The complexity is furthered by the fact that the creation of a venture is a novel and unstructured task (Jackson, 1992). Addingto this complexity is the lack of operating history, non-developed scanning capabilities, etc. because there is no precedence to rely upon (Cooper et al., 1994). These aspects place a need for diverse capabilities, skills, and knowledgeon the ET. Therefore, the ET needs both heterogeneity in capabilities, skills, and knowledge, but also need homogeneity to beable to work together and be effective. The environment in which the ET has to operate becomes an aspect influencing its effectiveness because the environment may require resources, human or financial capital, the ET does not have. The ET’s internal functioning, communication, composition, and conflict handling also become determinants of its effectiveness. How the ET handles and succeeds on the aforementioned ET-aspects determines theET effectiveness and, ultimately, the venture performance. To assess ET effectiveness, each determinant will have to be examined, starting with the environment.Environment. Rumelt (1991) found that success, in terms of performance, is business-level specific, not industry-level specific. This means that it is how the ET responds to and affects the environment that determines venture performance, and not that ventures created in a specific industry will outperform new ventures in other industries. Yet, the environment affects the team structure and, in turn, ventures' performance. As Hambrick (1994) reports, environmental jolts led to a reduction in tenure and changes in demographic composition due to replacements in the team. Because the ET and venture performance is linked, a change in the ET will also affect the venture performance.The type of environment, stable or turbulent, affects the ET and venture performance. Murray (1989) argues that a venture with a heterogeneous ET-composition will experience lower venture performance in stable environments because the need for communication is greater in a heterogeneousET and fast responses in the stable environment are essential for ET effectiveness. Glick et al. (1993) found thatin turbulent environments, an ET with a heterogeneous composition was positively associated with performance in turbulent environments because the heterogeneous ET made more comprehensive decisions, which included considering more options. Similarly, Eisenhardt and Schoonhoven (1990) concluded that venture performanceis partly due to the venture’s present and founding environments.Eisenhardt and Schoonhoven (1990) found that a growth market provides the combination of present market size and rapid increases in demand that is facilitativeof venture growth due to the abundance of resources that could be generated in this kind of environment. They concluded that the founding environment and ET have a significant impact on venture performance. Surprisingly, Eisenhardt and Schoonhoven(1990) also found that the effects of the founding environment did not fade over time, as Glick et al. (1993) found with ET heterogeneity, but the effects of the founding environment grew over time. Therefore, the founding environment is a vital factor in venture performance. This does not mean that the founding environment necessarily is an industry; it could be a niche. With these considerationsin mind, proposition two is as follows:P2: Venture performance depends on the founding environment, not necessarily an industry, and on the match between the environment, stable or turbulent, and heterogeneity/homogeneity of the entrepreneurial team.As illustrated above, the environment can change the composition of the ET and affectthe venture performance. The environmentcan also make it necessary for the ET to change the power structure within the ET.Power and Politics. The environment may require the ET to shift the power structure, permanentely or temporarily (Follett, 1941). The shifting of power may run contrary tothe motivations of some ET members who desire power for the sake of power (Timmons, 1994). These individuals will seek to concentrate power through the means of politics (e.g., restricting information) within the ET. Politics withinthe ET reduces its effectiveness and venture performance, because to further the political goal of achieving power, information will be restricted or will be intentionally misleading. Politics will consume a valuable and limited resource: time (Eisenhardt & Bourgeois, 1988). Therefore, proposition three and four are:P3: Shifting power (e.g., to make decisions within the entrepreneurial team based on the situation and/or task at hand) positively influences both entrepreneurial team effectiveness and venture performance.P4: Politics within the entrepreneurial team, based on destructive motivations, will reduce entrepreneurial team effectiveness and venture performance.Together proposition three and four do not indicate that shifts in power lead to politics. This requires destructive motivations, such as seeking power for the purpose of having power (Eisenhardt & Bourgeois, 1988). Politics may be limited through the use of constructive communication processes. Communication. Conflict is not the cause of politics, but the concentration of power is the cause of politics according to Eisenhardt and Bourgeois (1988). Conflict over strategic performance goals, or other significant issues, regarding the venture may provide the ET with an opportunity to communicate ET member expectations and decide on common goals that all ET members will work for. This way communication can enhance venture performance (Watson et al., 1995). Whereas, disagreement over strategic issues and lack of communication to settle these issues within the ET may lead to lowered venture performance (West & Meyer, 1998). Continued communication that is rich in nature, such as face-to-face communication, leads to integration of the ET, more comprehensive decisions, and facilitates coordination of the interdependent tasks of the ET and the venture (Glick et al., 1993; Hambrick, 1994), and, ultimately, results in better venture performance. Therefore, proposition five is:P5: Rich communication, both in quality and quantity, will enhance the entrepreneurial team effectiveness and, in turn, venture performance.The need for communication to ‘iron out’ differences in perspectives of the world (paradigms), interpretations, and expectations for the venture and ET participation depends on the degree of heterogeneity within the ET. For example,as Glick et al. (1993) points out, heterogeneity will decrease over time as theET engages in the process of communicatingto solve problems and thereby becoming a socially integrated unit. Smith, Smith, Olian, Sims, O’Bannon, & Scully (1994) suggest that as the ET becomes a socially integrated unit, it reacts faster and is more flexible, efficient, and effective because the ET, through supreme problem solving skillsand communicated aspirations, can allocate time and energy to where it will have the most impact. Whereas, Hambrick (1994)and Hambrick et al. (1996) notice that homogeneity within the ET benefits the speed of decision-making but at the cost of actions of less magnitude as compared to a heterogeneous ET. Therefore, ET composition is an important determinant of venture performance.Team Composition. The composition ofthe ET refers to the collective characteristicsof its members (e.g., Banter & Jackson, 1989). ETs are most effective if they balance their skills, knowledge, and abilitiesas Cooper and Daily (1997) suggest. Heterogeneity in the ET’s composition is needed for the ET to achieve a high level of effectiveness and venture performance.The environment for a new venture may be considered turbulent, from the perspective ofthe ET, and the creation of the venture is a novel and discontinuous action. For situations that include novel problems or turbulent environment, heterogeneous team composition has been found to be superiorin performance (Filley, House, & Kerr, 1976; Hambrick & Mason, 1984). Filley and associates (1976) also found teams that were homogeneous in composition were more efficient in dealing with routine tasks. This illustrates that the compositional effectof the ET is an important aspect of the ET effectiveness and venture performance.The human characteristics that differentiate the team members from each other and create heterogeneous team have typically included demographic characteristics, such as tenure, age, functional and educational background, race, etc. (e.g., Bantel & Jackson, 1989). Despite the significant amount of the research on ETs that focus on demographic characteristics, it is only a partof ET heterogeneity. For example, Eisenhardt and Schoonhoven (1990) and Hambrick and D’Aveni (1992) linked team demography and organizational performance together via unmeasured psychological variables. This shows that ET-composition considerations need to include cognitive aspects and that the research based on demographic composition has been limitedat best. Therefore, proposition six is:P6: An entrepreneurial team that is composed of people with a balance of demographic and cognitive heterogeneity and homogeneity that match the venture’s development stage and its environment will achieve superior venture performance. Another aspect of ET composition is time and its affect on the team. As mentioned earlier, it was found that effects of diversity, especially for demographic characteristics, within the ET decreased over time as the ET engaged in lengthy discussions and solved disagreements and complex problems (Glicket al., 1993; Harrison, Price, & Bell, 1998). This may be beneficial to the venture as it develops and as tasks become routine which are more efficiently handled byhomogeneous ETs. However, the need for a heterogeneous ET may still be desired because the heterogeneous team can make more effective decisions. Therefore, a change in ET-composition may be desired, a mechanism that will make departure from the ET graceful is needed. Or, as Timmons (1994) and Kamm and Nurick (1993) suggest, two of the pitfalls of entrepreneurship are the failure to consider that the ET will change in composition over time and the lack of mechanisms to adjust the ET accordingly. These two pitfalls suggest that proposition seven should be as follows:P7: An entrepreneurial team that adjusts its demographic and cognitive composition according to the venture’s needs, in terms of development stage and venture environment, will have enhanced venture performance. Demography. Diversity in the ET’s composition may lead to some negative effects, such as increased time consumptionto make decisions. However, most of the literature has established that heterogeneityin functional experience and educational background increase ventures performance because the ET makes more comprehensive decisions of strategic importance (e.g., Eisenhardt & Schoonhoven, 1990).Some demographic characteristics have not been positively associated with performance. Race has not been establishedto have a significant impact of performance, but its related aspects, such as a limited network in an entrepreneurial environment or in an industry, may limit the probability for a successful venture (Cooper et al., 1994). Also, entrepreneurs having parents who were also entrepreneurs has not been associated with successful ventures, but has been associated with ventures that experienced marginal survival (Cooper et al., 1994). Demographic characteristics that had non-significant relationships with performance included: previous held management level of ET members, whetherthe ET member had experience in not-for-profit organizations or had not been in the labor force, and the ET’s use of professional advisors to improve decision making (Cooper et al., 1994). This leaves only two demographic characteristics that significantly affect ET effectiveness and venture performance through diversity in perceptions of problems and the approachesto solving the problems at hand. These demographic characteristics are educational background and industry experience. Alsoas discussed earlier, the ET’s ability to communicate effectively affects ET effectiveness (e.g., Glick et al., 1993). Based on this discussion, it is possible to develop proposition eight:P8: Entrepreneurial teams that have members with heterogeneous and complementary industry experiences and educational backgrounds and have (developed) effective communication withinthe team will be more effective and will enhance venture performance.Researchers have used demographic characteristics to assess ET cognitive heterogeneity (e.g., cognitive style or risk aversion), which is based on an assumptionthat demographic characteristics are proxiesfor psychological constructs (Hambrick 1994). Glick et al. (1993) and Harrison et al.’s (1998) found that the effect of demographic diversity was reduced over time, whereas the cognitive characteristicsare sustainable and, therefore, not able to be approximated from demographic characteristics. Therefore, demographic diversity is independent of cognitive diversity. The use of demographic characteristics may have been based on easeof use and collection, as suggested by Bantel & Jackson (1989) and Hambrick (1994). Cognitive Characteristics. Cognitive heterogeneity refers to differences in how a person perceives the environment and what they are concerned with (Hambrick, 1994). Hurst, Rush, and White (1989) outline how and why cognitive diversity can increase team effectiveness. They follow Jung’s four cognitive types and argue that the literature has only been concerned with two of Jung’s cognitive types: thinking and sensing. They argue that by limiting research to these two cognitive types only, research cannot accurately assess team effectiveness and that the four cognitive styles are stable over time, in contrast to demographic characteristics as argued by Glick et al. (1993) and by Harrison et al. (1998).The four cognitive styles are present in all human beings but one style is dominant (Hurst et al., 1989). The four types are intuition, feeling, thinking, and sensation. First, the intuition style is concerned with possibilities, patterns, and ideas. Second, the feeling type is focused on people and values. Third, the thinker is interested in cause and effect relationships. Fourth, the sensation type is concerned with activities. Hurst and associates (1989) argue that a team without each one of the four types will not function effectively. The reason for this inability for the ET is based on the process of creating a venture. The venture creation goes through a process of imaging the venture, motivation is created to pursue the idea of a new venture, planning of the venture, implementing the venture creation, evaluating the performance, and assessing the (personal) satisfaction with the venture experience (Hurst et al., 1989). It is the intuition that sparks the idea of creating the venture: the conceptual development. The feeling part involves motivating people and assessing the values needed for the venture. The planning takes over from the intuition and feeling by transforming, through thinking, the concept and values into objectives for the venture and creating a strategy to achieve these objectives. The strategies, through the sensing, create activities, or more commonly known as tasks, that call for action and later results. The results are evaluated in the thinking style, and the feeling of personal satisfaction and achievement with the venture creation is assessed and cognitively realized in the intuition mode (Hurst et al., 1989). This suggests that the true entrepreneurial behavior exists in the intuition and feeling types because the thinking and sensing types are typical of non-entrepreneurial management. It is the prospecting (Miles & Snow, 1978) that sets entrepreneurs apart from traditional managers, who lack the intuition and feeling aspects due to their training and education. Based on this need for all four cognitive types in the ET, proposition nine is as follows:P9: Entrepreneurial teams that have representation of all four of Jung’s cognitive styles will be more effective and will achieve higher performance than entrepreneurial teams that have any deficiency in the representation of the four cognitive styles.This implies that cognitive diversity is a vital part of ET effectiveness and venture performance. Through cognitive conflict, the ET can develop more comprehensive decisions based on richer information and perceptions, gain a better understanding of the problems, and develop more options for actions (Eisenhardt, Kahwajy, & Bourgeois, 1997). This also requires that power and politics, as well as affective conflict (personal attacks) to be limited (Amason &Sapienza, 1997). Therefore, proposition ten is:P10: Entrepreneurial teams who engage in cognitive conflict and avoid affective conflict will experience superior effectiveness and venture performance. Constructive conflict, and especially affective conflict, takes time to resolve making a venture less efficient, this is why heterogeneity is a double-edged sword (Hambrick et al., 1996).Conflict. As proposition ten suggests, there are both constructive and destructive conflict arising from diversity. This implies that diversity should be limited. However, homogeneity, both cognitive and demographic, has some serious consequences that may impair the ET and may lead to an undesired termination of the venture. Without conflict and challenges ofET members’ perception, the ET may experience “groupthink” (Janis, 1972). The groupthink will unconsensiously limit the range of options for the ET and limit information processing of the ET (Eisenhardt & Schoonhoven, 1990; Finkelstein & Hambrick, 1990). Despite this aversion of homogeneity in the ET, some homogeneity must exist for the ET tobe able to function. It is an aversion of too much homogeneity that is the issue. Heterogeneity leads to conflict that takes time, making the ET slower in responding and less efficient (O’Reilly et al., 1993; Hambrick et al., 1996). Yet, several researchers have emphasized that heterogeneity is vital to ET effectiveness (Eisenhardt & Schoonhoven, 1990; Bantel & Jackson, 1989; Cooper & Daily, 1997). This means that cognitive conflict in the ET is an essential determinant of venture performance. SUMMARY AND FUTURE RESEARCH This paper has developed a more comprehensive definition of an entrepreneurial team than what exists in the literature. Based on the definition of entrepreneurial teams; ten propositions were proposed with each proposition focused on entrepreneurial team effectiveness. The first proposition associated entrepreneurial team effectiveness with venture performance. In this relation, a short discussion of how to measure performance was obtained concluding that the currently used measures are not sufficient.Propositions two through ten suggested how determinants of entrepreneurial team effectiveness affect the entrepreneurial team effectiveness, and in some cases also directly affect venture performance. In the pursuit of the later propositions, this paper identified that the current literature has assumed that demographic characteristics can accurately measure psychological constructs. The paper suggests a departure from this path and that psychological constructs, such as cognitive styles based on Jung’s work, are used. This will more accurately describe the determinants of entrepreneurial team effectiveness and venture performance in addition to the two demographic characteristics of industry experience and educational background. Also, the composition of the entrepreneurial team’s characteristics is suggested to be of importance to the entrepreneurial team’s effectiveness both in terms of heterogeneity and homogeneity.The paper indirectly suggests potential fruitful venues for future research. Considering the paper’s suggestion of use Jung’s four cognitive styles to identify and form an optimal performing ET, it also seems appropriate to study how team。

企业战略管理英文版(第一章)

企业战略管理英文版(第一章)


Important Definitions
Risk
An investor's uncertainty about the economic gains or losses resulting from a particular investment.
Average returns
Returns equal to what an investor expects from other investments with similar amount of risk.
2006 by Nelson, a division of Thomson Canada Limited.
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What is Strategy?
"A unified, comprehensive, and integrated plan designed to ensure that the basic objectives of the enterprise are achieved." (Glueck, 1980:9) "The pattern or plan that integrates an organization's major goals, policies, and action sequences into a cohesive whole." (Quinn, 1980) "A pattern of resource allocation that enables firms to maintain or improve their performance. "A good strategy… neutralizes threats and exploits opportunities while capitalizing on strengths and avoiding or fixing weaknesses." (Barney, 1997:17)