The need for coordinated decision making bears on the pay gap between a firm's CEO and its other top executives. A behavioral view suggests that because more equal pay promotes collaboration, greater coordination needs encourage smaller pay gaps, and the combination of greater needs and smaller gaps enhances firm performance, An economic view implies the opposite because larger gaps create tournament-like incentives that address monitoring problems associated with joint decisions. We found that although economic theory was a better predictor of the size of CEO pay gaps, there was a balance between the economic and behavioral views as predictors of firm performance.

The complexity surrounding globalization offers a unique context in which to study the moderating role of uncertainty on top management team (TMT) demographic effects. In a sample of United States-based industrial firms, TMT international experience, educational heterogeneity, and tenure heterogeneity were positively related to firms' global strategic postures, and functional heterogeneity exhibited a negative association. However, when the level of uncertainty facing TMTs was accounted for, these associations were found to be nonlinear.

We develop a theory of board‐directed strategic change in which directors (1) conceive changes in corporate strategy that reflect the strategies of their own home companies, and (2) select new CEOs who have prior experience with similar strategies to facilitate implementation. The findings show that, while the experience of new CEOs appears to predict corporate strategic change, these effects disappear after accounting for board experience. Thus, our results suggest that executive effects on strategy can mask board effects. Copyright © 2001 John Wiley & Sons, Ltd.

The level of agreement among a firm's top executives about how things are done in that firm has a variety of important implications. For example, agreement about a firm's decision-making norms may allow members of the top management team (TMT) to focus on the substance of their most critical decisions and not get bogged down in debates about the process. In the present study, data from 65 firms in two industries were used to identify determinants and consequences of TMT agreement was positively related to organizational performance. As for the determinants of agreements, organizational size was negatively related to agreement but past performance exhibited no association. Therefore, the results suggest that it is TMT agreement that influences performance, not the reverse. In addition, a surprising result was that firms in an industry with an unstable environment exhibited significantly more agreement about the process than did their counterparts in an industry whose environment was stable.

Early research found little relationship between CEO pay and firm performance. Therefore, resent work on CEOs' compensation has focused less on the substantive nature of the job performed by such executives and more on the social and political context in which their pay is set. This study returns attention to the substantive nature of CEOs' jobs. Specifically, we argue that CEOs are paid for the level of information processing that their jobs require. Results from four industries support this view: chief executive compensation was higher in firms whose diversification strategy, approach to technology, and top management team structure placed particularly high information-processing demands on their CEOs.

We develop hypotheses about the determinants of the proportion of CEO compensation paid in long-term as opposed to cash forms. These hypotheses are tested using data on 504 large firms. Results indicated that long-term compensation was affected by power and social comparison considerations and not by agency concerns.

In two earlier studies, comprehensiveness, a characteristic of rational strategic decision-making processes, exhibited a positive relationship with organizational performance in a stable environmen...

Comprehensiveness is a measure of rationality and is defined as the extent to which organizations attempt to be exhaustive or inclusive in making and integrating strategic decisions. Results from a...

A recent study in an industry with an unstable environment (Fredrickson & Mitchell, 1984) reported a negative relationship between comprehensiveness (a measure of rationality) and organization perf...

Forty-one groups with appointed supervisors and either two or three subordinates worked on a clerical task for three 10-min sessions and received feedback on their performance. Supervisors evaluated subordinate performance and provided feedback for the subordinates. Four variables were manipulated in a two-phase study. These were: the supervisor's power over subordinate pay (high power and low power), the degree of interdependence between supervisors and their subordinates (high and low), the nature of feedback to subordinates (general, specific with a focus upon quantity, and specific with a focus upon quality), and the level of subordinate performance reported to the supervisor (high and low). It was found that the responses of supervisors toward subordinates were influenced by both the level of subordinate performance and by the degree of interdependence. Subordinates, on the other hand, were influenced by the leader's power as it interacted with the nature of the feedback and by the nature of the feedback. These feedback influences were entirely upon attitudes and beliefs; they did not influence performance on the task after feedback.