Past research indicates that the effect of TMT functional diversity on firm performance is equivocal. We address this issue by focusing on the integrative role of the CEO, postulating that the CEO's expertise and background characteristics affect the TMT functional diversity–firm performance relationship, because of their impact on the exchange and integration of distributed knowledge within the TMT. Using a dataset of 33 Dutch and Belgian Information Technology firms we investigate the moderating role of three sets of CEO characteristics (functional background, status as founder, and shared experience with the other TMT members) on the relationship between TMT functional diversity and firm performance. Our results reveal that CEO and TMT characteristics do interact in realizing the potential advantages of distributed TMT functional expertise.

Past research on the relationship between top management team (TMT) compositional diversity and organizational performance has paid insufficient attention to the nature of TMT team processes in interaction with TMT diversity. We fill this gap by studying how three team mechanisms (collaborative behavior, accurate information exchange, and decision-making decentralization) moderate the impact of TMT diversity on financial performance of 33 information technology firms. We focus on two fundamentally different forms of TMT diversity: functional-background (FB) and locus-of-control (LOC). We argue that the former has the potential to enhance decision quality and organizational performance, whereas the latter might trigger relational conflict, and is, therefore, potentially detrimental to firm effectiveness. The ultimate aim of our study is to analyze which team processes help to transform distributed FB knowledge into high-quality decisions and organizational effectiveness, and which help avoid the potential detrimental effects of LOC diversity. We find that a TMT's collaborative behavior and information exchange are necessary conditions to unleash the performance benefits of FB diversity, but do not interact with LOC diversity. In addition, decentralized decision making spurs the effectiveness of functionally diverse teams, while at the same time reinforces the negative consequences of LOC diversity on firm performance.top management teams, team diversity, organizational performance

This article examines the effect of organizational characteristics (firm innovativeness, firm internationalization, firm size) on the appointment of nonfamily managers in private family firms while taking into account the moderating role of socioemotional wealth (SEW). While these organizational characteristics increase the need for expertise, family firms cope with a limited pool of family managers. Therefore, new creative knowledge from nonfamily managers is needed. However, results from a sample of 145 Belgian family firms indicate that the positive effect of organizational characteristics on the integration of nonfamily managers decreases when family-related objectives reflected by SEW become more important for the firm.

Socio-emotional wealth (SEW), defined as the firm's non-financial aspects meeting the family's affective needs, has become the dominant paradigm in family firm research. Recent debate acknowledges potential SEW heterogeneity within family firms. This study considers the effect of polarizing opinions on SEW preservation among TMT members as a source of separation in the TMT. More concretely, we study the effect of SEW separation on TMT decision-making quality, while taking into consideration behavioural integration as a team process and psychological safety as a team context. Based on a unique multiple respondent sample of 300 managers from 55 Belgian private family firms, we find that behavioural integration mediates the negative effect of SEW separation on TMT decisionmaking quality. In addition, we find that the negative effect of SEW separation on behavioural integration is mitigated by psychological safety and even turns into a positive effect at high levels of psychological safety.

Organizational leadership is generally distributed between the chief executive officer (CEO) and the top management team (TMT) members. Building on this observation, we present an empirical investigation of the cues for CEOs to delegate decision-making influence to particular TMT members. In the literature, explanations both based on expertise and driven by similarity are described. In this study, we reconcile both explanations by examining the moderating role of the TMT's level of 'cooperative behaviour' (collaboration and information exchange). We analyse when and in what circumstances TMT members' expertise and similarity to the CEO regarding his/her functional background and/or locus-of-control predict their decision-making influence.We postulate that TMT cooperative behaviour will advance the effect of expertise on TMT members' decision influence but impede the effect of similarity to the CEO. Our hypotheses are tested on a data set of 135 TMT members from 32 Dutch and Belgian information technology firms. Overall, we find that our proposed research model is confirmed for technology-oriented decisions. Furthermore, we draw exploratory conclusions about the effect of TMT cooperative behaviour on the systematic distribution of decision influence in TMTs.