Top-Management-Team Tenure and Organizational Outcomes: The Moderating Role of Managerial Discretion

TLDR

This study examined how top‑management‑team tenure relates to strategic persistence, strategy conformity, and performance relative to industry peers. Using an upper‑echelons framework and treating managerial discretion as a moderator, the study modeled the influence of tenure on these outcomes. Across 100 firms in computer, chemical, and natural‑gas distribution industries, long‑tenured executive teams pursued more persistent strategies, aligned with industry norms, and achieved performance close to industry averages, with stronger effects when managers had high discretion. The project was supported by the Social Sciences and Humanities Research Council of Canada, the Irwin Foundation, Columbia University’s Executive Leadership Research Center, and the authors thank reviewers and colleagues for their comments.

Abstract

This project was supported by the Social Sciences and Humanities Research Council of Canada, the Irwin Foundation, and Columbia University's Executive Leadership Research Center. We would like to thank Warren Boeker, Bert Cannella, Ming-Jer Chen, John Delaney, Jim Fredrickson, Sara Keck, Nandini Rajagopalan, Mike Tushman, and the anonymous reviewers for their helpful comments on earlier drafts of this paper. Drawing on an upper-echelons framework to study the effects of top-management-team tenure and modeling managerial discretion as a moderating variable, this study examined the relationship between managerial tenure and such organizational outcomes as strategic persistence and conformity in strategy and performance with other firms in an industry. In a sample of 100 organizations in the computer, chemical, and natural-gas distribution industries, executive-team tenure was found to have a significant effect on strategy and performance, with long-tenured managerial teams following more persistent strategies, strategies that conformed to central tendencies of the industry, and exhibiting performance that closely adhered to industry averages. Consistent with the theory, results differed depending on the level of managerial discretion, with the strongest results occurring in contexts that allowed managers high discretion.'