Strategic Leadership Theory and Research on Executives, Top Management Teams, and Boards

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  • Format: Hardcover
  • Copyright: 2008-11-05
  • Publisher: Oxford University Press

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This book integrates and assesses the vast and rapidly growing literature on strategic leadership, which is the study of top executives and their effects on organizations. The basic premise is that in order to understand why organizations do the things they do, or perform the way they do, weneed to deeply comprehend the people at the top-- their experiences, abilities, values, social connections, aspirations, and other human features. The actions--or inactions--of a relatively small number of key people at the apex of an organization can dramatically affect organizational outcomes. The scope of strategic leadership includes individual executives, especially chief executive officers (CEOs), groups of executives (top management teams, or TMTs); and governing bodies (particularly boards of directors). Accordingly, the book addresses an array of topics regarding CEOs (e.g.,values, personality, motives, demography, succession, and compensation); TMTs (including composition, processes, and dynamics); and boards of directors (why boards look and behave the way they do, and the consequences of board profiles and behaviors). Strategic Leadership synthesizes what is known about strategic leadership and indicates new research directions. The book is meant primarily for scholars who strive to assess and understand the phenomena of strategic leadership. It offers a considerable foundation on which professionals involved inexecutive search, compensation, appraisal and staffing, as well as board members who evaluate executive performance and potential, might build their tools and perspectives.

Author Biography

Sydney Finkelstein is the Steven Roth Professor of Management at the Tuck School at Dartmouth College, where he teaches courses on Leadership, Top Management Teams, and Managing Mergers and Acquisitions. He is also Faculty Director of the flagship Tuck Executive Program, as well as a consultant for companies around the world. Professor Finkelstein has conducted extensive research on strategic leadership, published numerous articles in the major journals in his field, and has written ten books.
Donald C. Hambrick is the Smeal Chaired Professor of Management, Smeal College of Business Administration, at The Pennsylvania State University. He holds a PhD degree from The Pennsylvania State University. His research focuses primarily on the study of top executives and their effects on strategy and performance. An active consultant and executive education instructor, he also served as president of the Academy of Management.
Albert A. Cannella Jr. is Koerner Chair in Strategy and Entrepreneurship at Tulane University. He received his Ph.D. from Columbia University in 1991. He serves on the editorial review boards of Academy of Management Journal, Journal of Management, Journal of Management Studies, Administrative Science Quarterly, and Strategic Management Journal. His research interests focus on executives, entrepreneurship, and competitive dynamics.

Table of Contents

The Study of Top Executivesp. 3
The Essence of Strategic Leadershipp. 4
Academic Attention to Executives: A Historical Viewp. 6
The Scope of Strategic Leadershipp. 9
Chief Executive Officersp. 9
Business Unit Headsp. 10
Top Management Teamsp. 10
Boards of Directorsp. 11
Additional Matters of Scopep. 11
Overview of the Bookp. 12
Do Top Executives Matter?p. 16
What Do Top Executives Do?p. 17
Basic Dimensions of the Jobp. 19
Do Managers Matter? A Doubtful Viewp. 20
Do Managers Matter? A Positive Viewp. 22
Problems with Lieberson and O'Connor's Studyp. 23
Evidence of Executive Effectsp. 24
Managerial Discretionp. 26
Environmental Sourcesp. 27
Organizational Sourcesp. 31
Individual Sourcesp. 33
Effects of Discretionp. 34
Executive Job Demandsp. 37
The Managerial Mystiquep. 38
Conclusionp. 40
How Individual Differences Affect Executive Actionp. 43
A Model of Human Limits on Strategic Choicep. 44
The Filtering Processp. 46
Executive Orientation: An Overviewp. 49
Psychological Characteristics as Bases for Executive Actionp. 51
Executive Valuesp. 52
Cognitive Modelp. 59
Executive Personalityp. 70
Positive Self-Regardp. 76
Conclusionp. 82
Executive Experiences and Organizational Outcomesp. 83
Executive Tenurep. 85
Tenure and Executive Psychologyp. 85
Tenure and Organizational Strategyp. 90
Tenure and Performancep. 93
Functional Backgroundp. 97
Functional Experiences and Executive Perceptionsp. 97
Links to Strategy and Performancep. 101
Future Research on Functional Experiencesp. 104
Formal Educationp. 106
International Experiencep. 112
Future Directionsp. 113
Promising Avenues of Researchp. 114
A Still-Untapped Perspective: The Factors Affecting the Predictive Strength of Executive Characteristicsp. 116
Which Traits?p. 117
Which Behaviors?p. 118
Which People?p. 119
Which Situations?p. 119
Conclusionp. 120
Top Management Teamsp. 121
The Conceptual Elements of Top Management Teamsp. 123
How the Conceptual Elements of TMTs Are Relatedp. 125
Teams versus Groupsp. 126
Who Is in the Top Group?p. 127
Power Dynamics at the Topp. 128
Interactions within TMTsp. 131
The CEO and Team Processp. 137
Determinants of TMT Characteristicsp. 138
Environmentp. 138
Organizationp. 142
CEOp. 148
Consequences of TMTs' Interactionp. 152
Consequences of TMTs on Strategic Decision Makingp. 152
Consequences of TMTs on Strategyp. 154
Consequences of TMTs on Firm Performancep. 158
Conclusionp. 162
Changes at the Top: The Antecedents of Executive Turnover and Successionp. 164
Will Succession Occur? Determinants of Top Executive Departurep. 166
Organizational Performancep. 168
Agency Conditionsp. 171
Other Organizational Characteristicsp. 174
Environmentp. 176
Predecessor (Incumbent) Characteristicsp. 178
What Will Be the Dynamics of the Succession Process?p. 179
Types of Successionsp. 179
Influence of the Incumbent versus the Boardp. 183
Who Will Be Selected?p. 185
Insider versus Outsider Selectionp. 186
The Broader Case of Continuity versus Changep. 194
Conclusionp. 196
Changes at the Top: The Consequences of Executive Turnover and Successionp. 198
What Are the Consequences of Succession?p. 199
The New Executive's Behaviors and Organizational Changep. 200
Implications for Organizational Performancep. 204
Executive Turnover: Beyond the CEOp. 213
Other Interesting Issues for Successionp. 224
Conclusionp. 225
Understanding Board Structure, Composition, and Vigilancep. 227
Determinants of Board Structure and Compositionp. 229
What Do We Mean by Board Structure and Composition?p. 229
Critical Contingenciesp. 232
Institutional Forcesp. 234
Agency Conditionsp. 238
Determinants of Board Vigilancep. 243
Board Vigilance in Monitoring and Disciplining Top Managementp. 243
Competition versus Cooperation in Board-CEO Relationsp. 251
Conclusionp. 253
The Consequences of Board Involvement and Vigilancep. 255
Board Involvement in Strategy Formationp. 255
Contextual Conditions Predicting Board Strategic Involvementp. 263
Boards and Firm Performancep. 269
Board Effects on Strategyp. 270
Boards as Supra-Top Management Teamsp. 277
Board Monitoring and Disciplinary Behaviorp. 281
Boards and Executive Compensationp. 282
Boards and Monitoring Behaviorsp. 284
Conclusionp. 289
The Determinants of Executive Compensationp. 291
Organizing Dimensions for a Framework of Executive Compensationp. 291
Direction of Causalityp. 291
Theoretical Perspectivesp. 292
Unit of Analysisp. 293
Economic Explanations for Executive Compensationp. 295
Research from the Managerialist and Neoclassical Traditionsp. 295
Moderators of the Pay-Performance Relationshipp. 296
Human Capitalp. 305
Marginal Product and the Managerial Labor Marketp. 309
Social Explanations for Executive Compensationp. 310
Ismorphism of Executive Compensationp. 312
Social Comparison Processes in the Setting of Executive Payp. 315
Social Capitalp. 318
Political Explanations for Executive Compensationp. 320
Compensation for Business Unit General Managers: Determinants and Consequencesp. 324
GM Compensation versus CEO Compensationp. 324
The Determinants of GM Compensationp. 325
The Consequences of GM Compensationp. 327
Conclusionp. 328
Executive Compensation: Consequences and Distributionsp. 330
Consequences of Executive Compensationp. 330
Economic Explanations for the Consequences of Executive Compensationp. 331
Behavioral Agency Theoryp. 337
Social Explanations for the Consequences of Executive Compensationp. 344
Political Explanations for the Consequences of Executive Compensationp. 346
Distribution of Compensation within Top Management Teamsp. 348
Pay Differential between CEOs and Other Executives in the Firmp. 348
Pay Dispersion within Top Management Teamsp. 356
TMT and CEO Compensation Patternsp. 361
Conclusionp. 364
Notesp. 367
Referencesp. 383
Indexp. 451
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