TY - JOUR
T1 - Top Management Team Structure and Resource Reallocation Within the Multibusiness Firm
AU - Vieregger, Carl
AU - Larson, Eric
AU - Anderson, Phillip C
N1 - Funding Information:
Acknowledgments: This article was accepted under the editorship of Patrick M. Wright. We are grateful for a constructive review process led by Catherine Maritan and Gwendolyn Lee and the thoughtful comments and suggestions of two anonymous reviewers. We also thank Joe Mahoney and Carl R. Adams. The research collaboration was partially supported through a Business Excellence Grant from the University of Illinois.
Publisher Copyright:
© 2016, © The Author(s) 2016.
PY - 2017/11/1
Y1 - 2017/11/1
N2 - Drawing on the classic concepts of integration and differentiation from contingency theory, we analyze the impact of influential business unit (BU) executives on the capital resource allocation decisions of the multibusiness firm. Capital resource allocation is one of the most important tasks of the top management team (TMT), yet management scholars have yet to explore the fundamental link between TMT structure and resource reallocation decisions. We hypothesize that greater BU influence within the firm’s TMT drives greater reallocation because BU executives are positioned to focus on organizational elements related to differentiation. We also hypothesize contextual factors, based on the multidimensional nature of managerial influence, which act to limit the effect of BU influence. To support this analysis, we develop two unique measures: The first captures the degree of capital reallocation from year to year within the multibusiness firm, and the second measures the relative influence of BU executives. An empirical analysis on the sample of Fortune 1000 firms confirms that BU influence is associated with capital reallocation and that BU influence is moderated by research and development (R&D) intensity and unrelated diversification.
AB - Drawing on the classic concepts of integration and differentiation from contingency theory, we analyze the impact of influential business unit (BU) executives on the capital resource allocation decisions of the multibusiness firm. Capital resource allocation is one of the most important tasks of the top management team (TMT), yet management scholars have yet to explore the fundamental link between TMT structure and resource reallocation decisions. We hypothesize that greater BU influence within the firm’s TMT drives greater reallocation because BU executives are positioned to focus on organizational elements related to differentiation. We also hypothesize contextual factors, based on the multidimensional nature of managerial influence, which act to limit the effect of BU influence. To support this analysis, we develop two unique measures: The first captures the degree of capital reallocation from year to year within the multibusiness firm, and the second measures the relative influence of BU executives. An empirical analysis on the sample of Fortune 1000 firms confirms that BU influence is associated with capital reallocation and that BU influence is moderated by research and development (R&D) intensity and unrelated diversification.
KW - contingency theory
KW - resource allocation/management
KW - top management teams/upper echelons
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U2 - 10.1177/0149206316678452
DO - 10.1177/0149206316678452
M3 - Article
AN - SCOPUS:85031817055
SN - 0149-2063
VL - 43
SP - 2497
EP - 2525
JO - Journal of Management
JF - Journal of Management
IS - 8
ER -