A longitudinal study of the influence of upper managers demographic characteristics on organizational performance

Abstract

The purpose of this research was to examine the relationship between the demographic characteristics of strategic linking group members of organizations and the performance of the organization. Because the past experiences of top managers are somewhat reflected the individual manager's demographic characteristics, it may be that the demographic characteristics of top level managers are systematically related to performance. The demographic characteristics of the strategic linking group managers of forty organizations (ten organizations in each of four industries) were related to different organizational performance aspects. The demographic characteristics used were average tenure in the organization, deviation of tenure in the organization, average tenure in the current position, deviation of tenure in the current position, average age, deviation of age, heterogeneity of functional background, average educational level, heterogeneity of educational level as well as specific functional make-up. The five performance aspects used in this research were external assessment, size, growth, risk and resource utilization. Two measures of each performance aspect were used to give a more comprehensive view of the performance aspect in question. The results indicated that industry is a moderator and a covariate of the relationship between demographic characteristics of strategic linking group members and organizational performance. Within industry, the demography/performance relationship tended to be linear. However, the direction of the linear relationship was contingent on the average performance of the industry. The results of this study indicate that there is a by-industry curvilinear relationship between demographic characteristics of strategic linking group managers and organizational performance. Because of the limited sample size, these results should be viewed cautiously. Implications for managers and future researchers are also presented.