PERSONNEL PSYCHOLOGY2014, 67, 351–387PERSONALITY AND LEADERSHIP COMPOSITIONIN TOP MANAGEMENT TEAMS: IMPLICATIONSFOR ORGANIZATIONAL EFFECTIVENESSAMY E. COLBERTUniversity of IowaMURRAY R. BARRICKTexas A&M UniversityBRET H. BRADLEYUniversity of OklahomaThis study examines whether top management team (TMT) personalityand leadership are associated with organizational effectiveness beyondthe effects of CEO personality and leadership, as suggested by upperechelons theory. Using direct measures of personality and leadership,rather than proxy variables from archival sources or demographic data,we found that mean levels of conscientiousness among TMT memberswere related to lagged indicators of organizational performance, as wereCEO conscientiousness and transformational leadership. Follower commitment to the organization was found to be associated with higherlevels of transformational leadership from both the CEO and TMT. Theresults are consistent with the upper echelons perspective that organizational effectiveness is influenced not only by the CEO but also by adominant coalition of leaders. Yet, the results also show that the CEOplays a distinct role in influencing organizational financial performanceand collective organizational commitment. Theoretical and practical implications of these results are discussed.Practitioners and scholars of management have long been captivatedby the characteristics of the CEO as a crucial predictor of firm success(Katz & Kahn, 1978; Waldman & Yammarino, 1999). Yet, the complexity of creating and carrying out the strategic decisions of an entireorganization demands more skill and effort than a single leader can effectively provide. Instead, it requires the collective ability and motivationof a dominant team of leaders within the firm (Cyert & March, 1963;Finkelstein & Hambrick, 1996; Hambrick & Mason, 1984). Consistentwith this view, Hambrick noted, “leadership of a complex organization isThis research was supported by the Filene Research Institute.Correspondence and requests for reprints should be addressed to Amy E. Colbert, Department of Management & Organizations, Henry B. Tippie College of Business, Universityof Iowa, 108 Pappajohn Business Building, Iowa City, IA 52242; [email protected] C 2013 Wiley Periodicals, Inc.doi: 10.1111/peps.12036351
352PERSONNEL PSYCHOLOGYa shared activity” (2007, p. 334). Thus, strategic leadership researchershave advocated examining the impact of a dominant coalition of leaders(Cyert & March, 1963), not just the CEO, on organizational effectiveness. Recognizing that the top management team (TMT) is charged withleading the organization, scholars have recently begun to consider theconsequences of the psychological makeup or composition of the innercircle of executives for organizational effectiveness (Cannella & Monroe,1997).The upper echelons perspective proposes that the experiences, values,and personalities of the firm’s CEO and TMT members shape their interpretation of the environment, which in turn influences strategic choice andorganizational effectiveness (Hambrick, 2007). However, because accessto TMTs is limited, TMT research has primarily relied on demographicdata from archival sources as proxies for team member psychologicalcharacteristics (Carpenter, Geletkanycz, & Sanders, 2004). The aim ofthis paper is to integrate personality and leadership theories with the upperechelons perspective in an effort to better understand how key characteristics of top executives influence organizational effectiveness and to testthese proposed linkages using direct measures of executive personalityand leadership. We propose the composition of executive personality andleadership within the TMT will be related to the success realized by theteam of executives (Hollenbeck, DeRue, & Guzzo, 2004; Levine & Moreland, 1990; Stewart, 2006) and, consistent with upper echelons theory,that these effects will augment the effects of CEO personality and leadership on organizational effectiveness. We examine these relationshipsusing two indicators of organizational effectiveness: firm financial performance, which is the most commonly used measure in the upper echelonsliterature, and aggregated employee organizational commitment. Collective organizational commitment is critical to the organization because itnot only is related to retention within the firm but also to employee engagement (Cole, Walter, Bedeian, & O’Boyle, 2012; Griffeth, Hom, &Gaertner, 2000).Our research makes four primary contributions to the literature. First,we consider how TMT personality composition and CEO personalityjointly influence organizational effectiveness. A recent review of TMTresearch noted “personality variables have long been included in theparlance of the UE [upper echelons] literature but rarely incorporatedspecifically in studies” (Carpenter et al., 2004, p. 771). Prior research hasshown personality composition influences the effectiveness of other workgroups within organizations (Bell, 2007; Mount, Barrick, & Stewart, 1998;Stewart, 2006). In this study, we draw from that research and consider theunique nature of TMTs as we build theoretical links between TMT personality composition and organizational effectiveness. Recognizing that
AMY E. COLBERT ET AL.353CEOs hold a unique position within TMTs (Finkelstein & Hambrick,1996), we model the effects of CEO personality separately from the effects of TMT personality composition to fully understand the impact oftop executives’ personality on organizational effectiveness.Second, because TMTs are charged with leading organizations, weexpect that the leadership exhibited by top executives is also related toorganizational effectiveness. Past research has highlighted the relationship of the CEO’s leadership style with organizational outcomes (e.g.,Colbert, Kristof-Brown, Bradley, & Barrick, 2008; Ling, Simsek,Lubatkin, & Veiga, 2008; Waldman & Yammarino, 1999). However,drawing on upper echelons theory, for the first time we test whetherfirm performance and employee commitment to the organization are alsorelated to the leadership composition of the TMT. Based on suggestionsthat transformational leadership theories may provide insight into the processes by which TMTs make and implement strategic decisions (Boal &Hooijberg, 2001; Cannella & Monroe, 1997), we focus on the relationshipsof TMT transformational leadership composition and CEO transformational leadership with organizational effectiveness.Third, we explicitly examine the proposition from upper echelons theory that executives’ personality traits influence leader behaviors. In doingthis, we develop a theoretical model that provides insight into the waysin which executive characteristics are interrelated. Two particularly compelling pieces of evidence support the view that executive personalitycauses leadership behaviors. First, research has shown that personalityis partially heritable and relatively stable during adulthood (Roberts &DelVecchio, 2000). Thus, it is unlikely that leadership behavior shapespersonality. Further, longitudinal analyses have shown that personalityassessed in childhood predicts performance over 50 years later (Judge,Higgins, Thoresen, & Barrick, 1999). The existence of significant effectsof personality on performance through proximal task-specific motivationalprocesses across numerous and varied situations over 50 years is convincing evidence that personality causes behavior. Based on this reasoning, inthis study we examine transformational leadership as a potential mediatorof the link between executive personality and organizational effectiveness.Fourth, rather than infer TMT member and CEO personality and leadership from proxy variables, we used direct assessments that are moreprecise empirical indicators of the psychological constructs and behavioral tendencies that are theorized in our model to influence organizational effectiveness. Although team composition is at the core of muchTMT theory (Carpenter et al., 2004), nearly all prior empirical researchhas relied on demographic data from archival sources to assess TMTcomposition effects (e.g., Bantel & Jackson, 1989; Cannella, Park, &Lee, 2008; Wiersema & Bantel, 1992). However, demographic variables
354PERSONNEL PSYCHOLOGYare, at best, proxies of the underlying psychological characteristics andbehavioral tendencies that actually influence TMT functioning (Carpenter et al., 2004; Priem, Lyon, & Dess, 1999). In response to these concerns, our research directly assesses the psychological makeup and leadership attributes of the executives in TMTs (Cannella & Monroe, 1997;Edmondson, Roberto, & Watkins, 2003; Lawrence, 1997; Pettigrew,1992). These individual-level characteristics have been overlooked byresearchers, even though they are expected to be important to the team’sfunctioning, leaving critical gaps in what we know about TMTs.Hypothesis DevelopmentIn this study, we examined the CEO’s impact on organizational effectiveness separate from that of the TMT. Given the power and statusdifferences between the CEO and the rest of the TMT, we modeled theeffects of the personality and leadership characteristics of the CEO separately from the personality and leadership composition of the TMT tobetter understand the unique effects of each. Because past research hasfocused on the impact of CEO personality and leadership on organizational effectiveness, this strategy allows us to examine the unique effectsof TMT personality and leadership beyond the effects of the CEO thathave been established in previous research. In the following section, webegin by developing theoretical support for the hypotheses that CEOand TMT member personality traits and leadership behaviors are relatedto organizational effectiveness. We then propose linkages between theseexecutive characteristics, suggesting that the transformational leadershipexhibited by the CEO and TMT is a critical mediator that can help explainthe link of top executives’ personality with organizational effectiveness(Carpenter et al., 2004; Hambrick, 2007). The hypothesized model isshown in Figure 1.We assess organizational effectiveness in two ways, based on financial indicators of objective organizational performance and on collective organizational commitment. Consistent with Gardner, Wright, andMoynihan (2011), we conceptualize collective organizational commitment as a shared unit property (Kozlowski & Klein, 2000). Organizationalcommitment originates as an individual-level perception of the psychological bond between an employee and the organization (Meyer & Allen,1997). These individual perceptions of commitment may be influencedby organization-level practices and leadership from the TMT (Mathieu& Zajac, 1990). Consistent with composition or direct consensus models of emergence, individuals within the organization interact with eachother, sharing their perceptions of the organization’s practices and the
AMY E. COLBERT ET AL.355H4, H5, H6, 0, H12Org. EffectivenessPerformanceCommitmentTMT MeanPersonalityH11TMT MeanTransformationalLeadershipH9, H11H1, H2, H3, H7Figure 1: Hypothesized Model of the Relationships of TMT and CEOComposition With Organizational Effectiveness.Note. TMT top management team.desirability of those practices (Chan, 1998; Kozlowski & Klein, 2000;Morgeson & Hofmann, 1999), yielding some convergence of individualperceptions of commitment. Those who have stronger and more definedcommitment to the organization may influence those whose commitmentis ambivalent (Gardner et al., 2011; Ostroff, 1992). In addition, becauseorganizational commitment includes an affective component, emotionalcontagion also may result in the emergence of a more homogenous levelof collective organizational commitment (Barsade, 2002). Thus, consistent with Gardner et al. (2011, p. 318), we define collective organizationalcommitment as an organization-level concept that represents “a sharedmindset and a shared psychological state among a delimited collectiveof individuals” that characterizes the bond between the collection of employees and the organization.Personality Composition and Organizational EffectivenessPersonality traits influence how we habitually think, feel, and act(Saucier & Goldberg, 2003). Within the workplace, personality has beenshown to influence leadership (Judge, Bono, Ilies, & Gerhardt, 2002),employee attitudes (Judge, Heller, & Mount, 2002), and job performance (Barrick, Mount, & Judge, 2001). Similarly, at the team level,personality composition has been shown to influence team functioning,
356PERSONNEL PSYCHOLOGYsatisfaction, and performance (Bell, 2007; Mount et al., 1998). Upperechelons theory suggests that these effects extend into the top levels oforganizations, proposing that personality traits of executives may influence their interpretation of the environment, their strategic choices, andultimately firm effectiveness (Hambrick, 2007). Although little empiricalresearch has directly assessed the personality traits of the CEO, Peterson,Smith, Martorana, and Owens (2003) used archival sources to rate thepersonality of 17 CEOs. Ratings of CEO conscientiousness, emotionalstability, openness to experience, extraversion, and agreeableness werepositively related to the functioning of the TMT, which in turn, relatedto organizational performance. Resick, Whitman, Weingarden, and Hiller(2009) used a similar approach to assess core self-evaluations and narcissism of CEOs in Major League Baseball. They found that CEO core selfevaluations were indirectly related to organizational performance throughpositive effects on transformational leadership behaviors, and CEO narcissism was indirectly related to organizational performance through itsnegative effect on contingent reward leadership behaviors.In this study, we propose that CEO personality as rated by the CEOsthemselves, rather than as coded from archival sources, is likely to berelated to organizational effectiveness. However, we extend these arguments to suggest that the personality traits possessed by TMT membersmay also be related to the success of the organization. The complexity ofcreating and carrying out the strategic decisions of an entire organizationdemands more skill and effort than a single leader can effectively provide.Instead, it requires the collective ability and motivation of a dominant teamof leaders within the firm (Cyert & March, 1963; Hambrick & Mason,1984). TMT members work together to craft the organization’s strategicdirection, and then each member of the TMT is given a specific role toplay—implementing the organization’s strategic direction in his or herfunctional area. In the implementation process, TMT members enact policies consistent with the strategic direction of the organization that mayimpact organizational performance. They also build relationships withemployees, influencing individual employee organizational commitmentand ultimately the shared level of commitment across the organization.Because the success of TMTs is dependent on each of its members, webelieve that the composition of personality and leadership within the TMTis best captured through mean levels of these characteristics. This choiceis consistent with meta-analytic studies of team composition in other typesof work teams, which have shown that mean levels of personality are related to team effectiveness (e.g., Bell, 2007). However, because we aretreating TMT personality as a configural unit property that does not necessarily converge within teams (Kozlowski & Klein, 2000), it is possiblethat the TMT member with the highest or lowest levels of a trait may
AMY E. COLBERT ET AL.357disproportionately influence the team’s outcomes or that the variability ofa trait across team members may impact team functioning. We return tothat possibility in the results section.We used the five broad personality traits reflected in the five-factormodel (FFM) of personality (conscientiousness, emotional stability, openness to experience, extraversion, and agreeableness) to comprehensivelydescribe the sphere of normal personality (Barrick & Mount, 1991). Thepersonality traits of leaders are often seen as either task-oriented (conscientiousness, emotional stability, and openness to experience) or interpersonally oriented (extraversion and agreeableness; DeRue, Wellman,Nahrgang, & Humphrey, 2011). Because a critical task of senior executivesis to direct and channel employees toward goal attainment, task-orientedtraits may be especially relevant in the TMT. The task-oriented traits ofconscientiousness, emotional stability, and openness to experience havebeen shown to be important predictors of leader emergence (conscientiousness: ρ .33; emotional stability: ρ .24; openness to experience: ρ .24) and leader effectiveness (conscientiousness: ρ .16; emotional stability: ρ .22; openness to experience: ρ .24; Judge, Bono et al., 2002).Conscientious executives are persistent, disciplined, and achievementoriented individuals. Such traits are fundamentally related to performanceoutcomes in many, if not all, jobs (Barrick et al., 2001). Similarly, emotionally stable executives who are neither prone to insecurity nor overlyanxious or distracted from their work are also better performers. Thebreadth of task-related behaviors that conscientiousness and emotionalstability reflect explain why these traits are “universal predictors” ofindividual-level performance (Barrick et al., 2001) and are expected torelate to overall organizational effectiveness; that is, they are importantpredictors in all jobs including executive jobs. Because the job of executive includes both enhancing organizational financial performance anddeveloping a committed workforce, we expect that conscientiousness andemotional stability among executives will help them achieve both of thesegoals and are likely to be related to both organizational performance andcollective organizational commitment.In addition to their impact on individual-level performance, priorresearch has also shown the behaviors and tendencies associated withconscientiousness and emotional stability to be related to team-level effectiveness in work contexts (Bell, 2007; Mount et al., 1998). Conscientious team members are disciplined, diligent, hardworking individuals.Two meta-analyses (Bell, 2007; Mount et al., 1998) found the higher theteam’s mean level of conscientiousness, the higher the team’s success inorganizational settings. The FFM trait of emotional stability (e.g., calm,steady, secure) reflects how an individual tends to think and react emotionally. Teams composed of more emotionally stable members are able
358PERSONNEL PSYCHOLOGYto deal with conflict more effectively and remain focused on the task itself (Barrick, Stewart, Neubert, & Mount, 1998). Not surprisingly, highermean levels of emotional stability in teams have also been found to leadto higher team performance in work contexts.The last task-oriented personality trait is openness to experience.Whereas openness to experience has not been found to predict individualperformance in lower level jobs (Barrick & Mount, 1991), it has beensignificantly related to individual leadership effectiveness (Judge, Bonoet al., 2002). Higher average team scores on openness to experience (e.g.,original, daring, imaginative, broad-minded) have also been found to berelated to team performance in meta-analyses of studies in organizationalsettings (Bell, 2007; Mount et al., 1998). Team members who are higheron openness to experience are posited to be better suited to adapt to themore dynamic environments typically found in team settings (LePine,2003). Would these results also be expected to apply to TMTs using organizational performance and collective organizational commitment asthe measures of team success? The firm’s executives are tasked with theresponsibility of designing the firm’s strategy, implementing commandand control to motivate other employees to strive toward the firm’s organizational performance objectives, and developing bonds with the organization’s workforce. Because of this, an executive’s job is likely to beinfused with uncertainty (Edmondson et al., 2003). Individuals who arehigher on openness to new experiences should be more flexible and adaptable as well as more creative and innovative (Barrick & Mount, 1991).Consequently, although prior research has revealed that this trait is important to leader effectiveness and team success in lower-level work teams(Bell, 2007; Mount et al., 1998), due to the increased uncertainty inherentin the work executives do and the relevance this trait has for executiveleadership, openness to experience is expected to be even more critical inexecutive settings.Theoretically, these findings suggest that TMTs and CEOs with higherlevels of these three task-oriented traits are more likely to complete goalsand effectively solve problems (Stewart, Fulmer, & Barrick, 2005), toorganize and plan work (Marks, Mathieu, & Zaccaro, 2001), and to simultaneously be cooperative and better team players. Thus, employeeswho are higher on these three task-oriented traits should be more effective at work, thereby enabling them to achieve the dual goals of improved organizational performance and greater collective organizationalcommitment.Hypothesis 1: The TMT’s mean level of conscientiousness is positively related to (a) organizational performance and (b)collective organizational commitment.
AMY E. COLBERT ET AL.359Hypothesis 2: The TMT’s mean level of emotional stability is positively related to (a) organizational performance and (b)collective organizational commitment.Hypothesis 3: The TMT’s mean level of openness to experience ispositively related to (a) organizational performance and(b) collective organizational commitment.Hypothesis 4: The CEO’s conscientiousness is positively related to(a) organizational performance and (b) collective organizational commitment.Hypothesis 5: The CEO’s emotional stability is positively related to(a) organizational performance and (b) collective organizational commitment.Hypothesis 6: The CEO’s openness to experience is positively relatedto (a) organizational performance and (b) collectiveorganizational commitment.In addition to the task-oriented traits, two separate meta-analyses ofteam-level personality effects in the small groups’ literature (Bell, 2007;Mount et al., 1998) have shown the two interpersonally oriented personality traits of extraversion and agreeableness to be important in teamsettings. Extraversion (e.g., gregarious, dominant, ambitious) is the firstinterpersonally oriented trait. Extraverted team members are more outgoing, sociable, and talkative; thus, they prefer to work with others in a teamrather than work alone. Higher levels of extraversion have been linkedto attraction to the team (Kristof-Brown, Barrick, & Stevens, 2005), tobacking up behaviors when others need it on the team (Porter, Hollenbeck, Ilgen, Ellis, & West, 2003), and to the desire to participate andengage members of the team (Barrick et al., 1998). Not surprisingly,prior meta-analyses (Bell, 2007; Mount et al., 1998) found higher average levels of member extraversion were associated with higher teamperformance. Both meta-analytic studies also reported that teams thathave individuals with higher average scores on agreeableness (e.g., considerate, trusting, friendly) were found to have higher team performancein work contexts. Based on these findings, agreeableness has been viewedas a particularly important personality trait in team settings, primarilybecause the behaviors associated with this trait drive members to maintain social harmony and reduce within-group conflict (Graziano, Hair, &Finch, 1997; Mount et al., 1998). Based on the findings from the workgroups literature, we might expect that higher mean levels of extraversionand agreeableness within TMTs are associated with higher organizationaleffectiveness.
360PERSONNEL PSYCHOLOGYIn a team composed of top executives, however, the influence of thesetwo interpersonally oriented personality traits may fundamentally differfrom the findings for other work teams. Members of an executive teammust first be leaders within the organization (Boeker, 1997), developing and implementing strategy and fostering organizational commitmentamong employees. Research findings on leaders show that extraversionis the single best personality predictor of leadership (Judge, Bono et al.,2002). Consequently, CEOs who exhibit more social influence and havegreater energy are expected to be more influential, which should lead tohigher levels of both organizational performance and organizational commitment. Similarly, because TMTs are responsible for communicating astrategic direction for the organization and influencing all their subordinates to coordinate their efforts in support of that direction, the communication and influence skills in teams with high mean levels of extraversionmay be associated with higher levels of effectiveness. Taken together, thissuggests having a predisposition to engage in influencing others, beingsociable, and being ambitious (i.e., highly extraverted) should increase amember’s success as a leader of their business unit and their ability toparticipate effectively in the TMT.In contrast, although being modest and having a need for affiliation(i.e., high in agreeableness) may be useful characteristics in some workteams, these traits have not been found to contribute to success as aleader. In fact, agreeableness is the only FFM trait that does not meaningfully relate to leader effectiveness (Judge, Bono et al., 2002). Furthermore, in a team composed of nothing but leaders, there is likely tobe little gained from being modest or overly agreeable. More important,given the importance that creating and setting organizational strategies(i.e., making decisions) has to the TMT, it is critical that the team avoidgroupthink (Janis, 1972). Consequently, there is a role for a devil’s advocate on the team. Thus, contrary to what research and theory in thesmall groups’ arena would suggest but consistent with findings in theleadership literature, we believe neither CEO nor TMT agreeableness willsignificantly influence firm effectiveness. Thus, for the interpersonally oriented traits, we expect only extraversion will be a driver of organizationaleffectiveness.Hypothesis 7: The TMT’s mean level of extraversion is positivelyrelated to (a) organizational performance and (b) collective organizational commitment.Hypothesis 8: The CEO’s extraversion is positively related to (a)organizational performance and (b) collective organizational commitment.
AMY E. COLBERT ET AL.361Leadership Composition and Organizational EffectivenessAlthough the personality traits of top executives may influence organizational effectiveness, a growing body of research has also examinedthe impact of leadership behaviors exhibited at the top of the organization.Again, the majority of this research has focused on the leadership behaviors exhibited by the CEO not the entire TMT. Although the results ofthese studies are somewhat mixed, evidence suggests that CEO transformational leadership or CEO charisma (one dimension of transformationalleadership) is positively related to objective measures of firm effectiveness, especially under conditions of environmental uncertainty (Waldman,Javidan, & Varella, 2004; Waldman, Ramirez, House, & Puranam, 2001).Further, the relationship between CEO transformational leadership andorganizational effectiveness is stronger in small to medium-sized firmswhere CEOs have more managerial discretion and work in less complexcontexts (Ling et al., 2008; Lubatkin, Simsek, Ling, & Veiga, 2006). Research has also linked the transformational leadership of a single leaderto employees’ organizational commitment (Avolio, Zhu, Koh, & Bhatia,2004; Bono & Judge, 2003).However, research has not yet examined how the transformationalleadership behaviors exhibited by TMT members are related to organizational effectiveness. Given that the TMT is responsible not only for settingthe strategic direction of the organization but also for implementing thechosen strategy, creating structures and systems to ensure the effectivefunctioning of the organization, and creating a bond between employees and the organization, leadership from all members of the TMT isneeded to accomplish these broad objectives. Within the upper echelonsand strategic leadership literatures, researchers have recently called forthe integration of other leadership theories into TMT research to helpexplain how top executives influence organizational effectiveness. Specifically, both Boal and Hooijberg (2001) and Cannella and Monroe (1997)suggested that transformational and charismatic leadership theories mightprovide insight into the processes by which TMTs make and implementstrategic decisions. Thus, we examine the role of TMT transformationalleadership composition in influencing organizational performance andcollective organizational commitment.Transformational leaders motivate others to go beyond self-interestto work for the good of the group or organization (Bass, 1985). Theydo this by communicating a compelling vision of the future, serving ascharismatic role models, encouraging others to challenge the status quo,and providing individualized support for others. Although a large body
362PERSONNEL PSYCHOLOGYof research has shown a consistent link between transformational leadership and follower attitudes and performance (Judge & Piccolo, 2004), themajority of this research has focused on close relationships between leaders and followers at lower levels of the organization. However, it has beensuggested that transformational leadership is also likely a key to successat the top levels of organizations (e.g., Pawar & Eastman, 1997).To fully mode
the link of top executives’ personality with organizational effectiveness (Carpenter et al., 2004; Hambrick, 2007). The hypothesized model is shown in Figure 1. We assess organizational effectiveness in two ways, based on ﬁnan-cial indicators of objective organizational performance and o