The impact of environmental change on the characteristics of top management teams

Abstract

SUMMARY The study reported in this paper examined the impact of environmental change on the background characteristics of top management teams. The banking sector in Turkey provided the setting for the study. Starting with a package of economic policy decisions put into effect in January 1980, the banking sector experienced a shift from a highly stable and regulated industry into one characterized by change, and at times, a highly turbulent setting. Twenty of the 28 banks that existed throughout the 1975–1986 period constituted the sample for the study. The study focussed on entire management teams, and data were collected on all incumbents (380 in total) of general manager or assistant general manager positions in these banks in the 1975–1986 period. Three biographical background variables, operationalized at the top‐management team level, were included in the analyses: age, length of time of inside service and formal education. The results provided support for the expectation that changes in environmental context affect organizational choices about characteristics of top management teams. The effects of environmental change, however, did not appear to be uniform across all variables included in the study. Size effects were also found for the average age of management teams, showing that changes in the predicted direction were more common among smaller organizations. Changes in large banks appeared to lag behind the more immediate response of smaller banks.

Source: resolved