Top Management Team and Firm Performance

This study examined the relationship between top management team (TMT) demographic characteristics and firm performance. The study addressed four key TMT demographic characteristics in their relationship with firm performance: age, functional background, educational field, and team tenure. The study extended research on the TMT by explicitly introducing team performance as a new context measured in the form of International Risk Management Factor, in addition to demographic characteristic effects. Drawing upon both organizational demographic theory and upper echelon theory, our study proposed that top management team demographic characteristics are positively associated with firm performance. This study addresses several questions about the relationship between different TMT demographic characteristics and firm performance: Is there any relationship between top management team demographic composition and firm performance? If yes, what would be the direction of these relationships? Does team performance as measured by International Risk Management Factor moderate these relationships?