TMT’s The relative importance of the top managerial skills management team’s managerial skills Abraham Carmeli
Graduate School of Business Administration and Department of Political Science, Bar-Ilan University, Ramat-Gan, Israel, and
Faculty of Management, TelAviv University, Ramat Aviv, Tel Aviv, Israel
Purpose – The goal of this study is to examine the effect that nine managerial skills of the ﬁrm’s top management team (TMT) (persuasiveness, administrative ability, ﬂuency in speaking, knowledge about group tasks, diplomacy and tact, social skills, creativity, conceptual skills, and cleverness) have on the performance of industrial ﬁrms (aweighted average of seven performance measures). Design/methodology/approach – Data were collected from chief executive ofﬁcers of 93 industrial enterprises in Israel through structured questionnaires and complementary in-depth investigation. Both multivariate (robust canonical analysis and hierarchical regressions) and in-depth analyses were used to analyze the study’s results. Findings – Theresults show that managerial skills possessed by the TMT strongly affect ﬁrm performance, their impact apparently being greater than that of variables representing industry sectors, ﬁrm size and age, and perceived environmental uncertainty. In particular, skills that are required to manage people (human resources skills) are found to be more important to ﬁrm performance than intellectual abilities.Practical implications – The study emphasizes the importance of complementary managerial skills as an indicator of quality TMT. The TMT’s ability to make good decisions and lead the organization to meet external and internal constituents is a very complex task. Originality/value – The study contributes to the literature by ﬁrst, providing support to the importance of managerial skills for ﬁrmperformance; second, suggesting a new avenue to incorporate the resource based view into the ﬁeld of strategic leadership in general and managerial skills in particular; and ﬁnally, indicating the importance of simultaneously testing the effect of a set of predictors (managerial skills) on a set of performance measures. Keywords Management skills, Chief executives, Senior management, Organizationalperformance, Israel Paper type Research paper
1. Introduction The role of the ﬁrm’s top management team (TMT) – the chief executive ofﬁcer (CEO) and senior managers – in creating sustainable competitive advantage and gaining above-normal performance has long attracted the attention of strategy researchers. Resource-based view (RBV) strategists and upper-echelon theorists suggest that the ﬁrm’s TMTis a critical resource for its success because of the signiﬁcant inﬂuence it
The authors wish to thank Constance E. Helfat, the Editors and the anonymous reviewers of this journal for their helpful comments and suggestions.
International Journal of Manpower Vol. 27 No. 1, 2006 pp. 9-36 q Emerald Group Publishing Limited 0143-7720 DOI 10.1108/01437720610652817
has on theﬁrm’s strategic decisions and their implementation (Barney, 1991; Castanias and Helfat, 1991, 2001; Hambrick and Mason, 1984; Wiersema and Bantel, 1992). Indeed, the ability of managers “to understand and describe the economic performance potential of a ﬁrm’s endowments” (Barney, 1991, p. 117) rests on the integration of all, or most, of the relevant managerial skills. Though several researchers(e.g. Katz, 1974; Stogdill, 1974; Whetten and Cameron, 2001; Yukl, 2002) have identiﬁed skills that effective leaders should possess, relatively little has been done to estimate the impact of the TMT’s skills and their relative importance to ﬁrm performance. Even though there is agreement about the multidimensional nature of performance, to the best of our knowledge, there is little empirical work...