An empirical research of TMT social network, cohesion and decision quality

An empirical research of TMT social network, cohesion and decision quality

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Abstract —As a major power influencing firm performance, top management team is an important field for strategic human resources research. This article believes that the interpersonal relationship and interaction among top management team members forms an internal “localized” social network. The structural characteristics of this network will impact cohesion and decision power. Based on the empirical data from a large state-owned enterprise, the research finds that centrality of social network is positively correlated with cohesion and decision quality, that cohesion is positively correlated with decision quality and that the density of social network has no significant effect on cohesion and decision quality. I. INTRODUCTION HE “upper echelons theory” transfers the study focus of leadership strategy from a CEO or a single leader to the top management team (TMT). The theory emphasizes that in face of the changeable and dynamic external environment, it is impossible to meet the requirement of management and internationalization by depending on a single person’s expertise. Single-handedness is outdated, and team cooperation is the key to success (Hambrick, Mason, 1984). At present, the TMT research results mainly focus on two aspects: (a) the relationships between TMT characteristics and strategic choice and organizational performance; (b) the relationships between team composition, operation process and organizational performance. As a matter of fact, the interpersonal relationship and interaction among top management team members forms an internal “localized” social network, which can potentially promote or restrict resource mobility inside and outside the team. It is an important variable affecting team process and result. Therefore, it is of great significance to study the impact of TMT social network on firm performance (Brass, 1984). Social network refers to a specific set of persons, objects or events on which a network is defined may be called the nodes (Knoke, Kuklinski, 1982). Social network opinion focuses on interpersonal and inter-organizational relational structures and patterns and analyzes the structural characteristics and interactive patterns of the social network, including social network connecting, distance, density, centrality and the property of the resources transmitted by the social network (Tichy, Tushman, Frmbrun, 1979). The plurality of interpersonal relationship and interaction results in the Tang Xuejun,School of Management University of Yangzhou,Yangzhou, China,e-mail:tangxuejun@yzu.edu.cn. Xiao Lu, School of Management University of Yangzhou Yangzhou, China,e-mail:xiaolu@yzu.edu.cn. differences in social network structural characteristics and in team operation effect. Therefore, the analytic way of social network is applicable in explaining team phenomenon.
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This note was uploaded on 06/19/2011 for the course IT 2254 taught by Professor Adelhassen during the Spring '11 term at Abu Dhabi University.

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An empirical research of TMT social network, cohesion and decision quality

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