CEO–TMT Congruence in Growth-Need Strength and Firm Growth
发布时间:10-18-22

Xue Wan; Stephen X. Zhang; Feng Wei*

Journal of Management Studies, 2022,2

 

Recommend Reason

Despite the importance of scaling up and firm growth, scholars have increasingly stressed that the CEO and the rest of the top management team (TMT) can vary considerably in their desires to grow based on their own innate preferences. Such incongruence in desires to grow may hold back the CEO from interacting, listening, and being open to the TMT and limit the CEO from accessing information crucial for firm growth. Indeed, the congruence (or similarity or fit) between the CEO and the rest of the TMT is a critical aspect of the CEO–TMT interface, and ‘fit appears to be critical for firm performance’. Despite the fact that the CEO–TMT interface perspective rests on the premise that the CEO is different from the rest of the TMT, little research has examined the implications of CEO–TMT (in)congruences in deep-level psychological characteristics for firm outcomes such as firm growth. Furthermore, the CEO–TMT interface research has focused on the degree of congruence (e.g., Cao et al., 2010; Hayibor et al., 2011; Ling et al., 2015), overlooking the forms of congruence and the forms of incongruence. This is problematic because decades of leader–team congruence research (Edwards, 2002; Edwards and Cable, 2009; Edwards and Parry, 1993) have highlighted congruence matters not only in the degree of congruence but also in the forms of congruence and incongruence. A leader and a team can be congruent in two forms, where the leader and the team both have high or low levels of a characteristic (forms of congruence). A leader and a team can also be incongruent in two forms, where the leader is either higher or lower than the team in a characteristic (forms of incongruence). These forms of congruence and incongruence have been demonstrated to have differential effects above and beyond the degree of congruence (Lambert et al., 2003).

About the Author

Xue Wan (doctoral student), School of Economics and Management, Tongji University

Stephen X. Zhang, University of Adelaide

Feng Wei*, School of Economics and Management, Tongji University

Keywords

CEO–TMT congruence, CEO–TMT interface, CEO openness to the TMT, new firm growth, entrepreneurship

Brief Introduction

We examine the effect of CEO–TMT degree of congruence, forms of congruence, and forms of incongruence in growth-need strength on firm growth based on decades of research on leader–team congruence. We find CEO–TMT incongruence in growth-need strength is negatively related to firm growth by reducing CEO openness to the TMT. Our theoretical framework and empirical findings make several contributions to the literature on firm growth, the CEO–TMT interface, and upper echelons theory. First, by theorizing and evidencing the relevance of GNS to firm growth, we add to the firm growth literature a micro-level psychological characteristic that is conceptually relevant yet largely missing. By theorizing and testing why and how CEO–TMT (in)congruence in GNS affects firm growth, we also answer the recent call to identify firm growth antecedents from the perspective of the CEO–TMT interface to unveil its ‘impacts on the distal outcomes, such as survival, growth …’. Second, we contribute to the CEO–TMT interface research by synthesizing a CEO–TMT congruence framework that accounts for not only the effect of degree of congruence but also the effects of forms of congruence and forms of incongruence. Our findings that the forms of congruence and the forms of incongruence in CEO–TMT GNS carry unique additional explanatory power set the stage for the more nuanced and fine-grained theorization of the CEO–TMT interface. Third, we contribute to the CEO–TMT interface research by identifying a mechanism of CEO openness to the TMT, a concept that distinguishes the roles of the CEO and the TMT, to answer the call of CEO–TMT interface research to characterize the team interaction process in a way that differentiates the leader from the rest of the TMT.

 

Link https://doi.org/10.1111/joms.12806

 

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