Conflicts in top management teams: transitions, triggers and actions

Conflicts are inevitable in work teams. In diversity research, early studies have analysed the distribution of personal attributes among interdependent members of a working unit and investigated the different types of conflicts that are triggered by individual differences within the organisation. This body of research investigates the impact of the different dimensions of personal attributes on team behaviour (i.e., conflicts and cooperation) and explores how conflicts may have an impact on the group’s performance. Since the impact of such conflicts on team performance has not yet been proven, some studies have tried to figure out the conflict-performance relationship by analysing the mediator impacts; for example, group cohesion and group behavioural integration. Thus, the research focus has changed from analysing individual dynamics (i.e., personal characteristics) to analysing group dynamics (i.e., the relationships and interactions among the diversified members). The analysis of different levels, including the individual, group, organisation, industry and environment dimensions, makes conflict management research more integrated and dynamic in comparison with studies that examine the impacts of the behaviour of isolated individuals within a working team. The recent focus on group behaviour and the composition of group members has led to the concepts of subgroups and faultlines in conflict management research. Subgroups or faultlines are regarded as a central component of work teams; however, subgroups or faultline issues have remained largely unexamined by scholars. Previous studies have presented a typology of subgroups and examined the antecedents and consequences of subgroups. Faultlines are regarded as the antecedents of subgroups in the literature. They are hypothetical dividing lines that split a group into two or more subgroups based on the alignment of one or more individual’s attributes and they have been found to affect teams’ processes, teams’ performance and teams’ affective outcomes. Most faultline studies are interested in understanding the composition of faultlines and they focus on the demographic attributes of team members. Recent studies have shown an increasing interest in analysing the complex mix of attributes that generate faultlines. Other studies have tried to analyse the context of teams and organisations by exploring the group’s characteristics (i.e., group size and the number of subgroups), group-level moderators (i.e., openness to experience and the salience of subgroup differences) and organisational and national culture in order to examine the faultline-performance relationship. As is the case in many new research areas, the findings of faultlines studies are not consistent, and many empirical studies have neglected several aspects of faultlines that are critical to understanding the link between faultlines and group performance; for example, faultline activation and evolution. There is an insufficient understanding of the micro aspects of subgroup formation by which to explain ‘how’ individuals align themselves to form rivals in a team, and the reason ‘why’ individuals try to formulate faultlines is still underdeveloped. This area of interest is called faultline triggers. Only a few studies have provided limited categories of triggers and more research is needed. The majority of the work on faultlines has investigated how demographic faultlines affect group processes and outcomes. However, little research has investigated the faultlines’ interactions via a process perspective. In other words, the question about ‘how’ teams interact regarding these differences within the team when faultlines emerge or are present also requires further study. This study, therefore, draws on diversity research and conflict management studies, which have introduced a theoretical framework that integrates teams’ early and late conflict states, faultline activation, the conflict transition process and the conflict management process. By targeting the behaviours and interactions of Top Management Teams (TMT), this study employs both upper echelon theory and faultline theory to understand the faultline transition process. Firstly, this study reviews the recent research that investigates the interplay of team conflict types. This study advances the Team Conflict Dynamics Model to examine conflict types within a dynamic and changing viewpoint. This model considers dynamics by examining conflict transformations in Top Management Teams, the reciprocal effects of conflict management processes and the negative impacts on the emerging faultlines. Using current studies in the conflict management field, this study explores whether the two types of conflict states (i.e., task conflicts and relationship conflicts) can be transformed to faultlines. This study then explores TMT/organisational characteristics and events that will activate faultlines. Previous research incorporates contextual features involving team design and contextual factors. Together with transformed task conflicts and relationship conflicts in the transition process, the dimensions motivating the emergence of faultlines form a typology of faultline triggers. Using a process-state perspective, this study then proposes the conflict management procedure as a dynamic transition and action process. The measures dealing with task conflicts and relationship conflicts within Top Management Teams are examined as the pre-emptive procedures that prevent faultlines from emerging. This study explores how senior managers deal with subgroups’ conflicts, which are referred to as reactive procedures, after faultlines are activated within TMTs. CEOs’ leadership, in terms of pre-emptive procedures and reactive procedures, will be explored separately. Thus, this process-based study explores the interaction between team members in order to prevent and react to faultlines. The findings categorise three different types of faultlines based on interests, relationships and seniority. They confirm that task conflicts and relationship conflicts can be transformed into faultlines in a specific context. In addition, these two conflicts will result in different types of faultlines, as explored in this study. Other triggers besides existing conflicts may also activate faultlines in Top Management Teams. The results suggest that faultline triggers, including specific legitimising events (i.e., newcomers and successive CEOs), have a significant impact on TMTs’ team morale and cohesion. The emerging findings emphasise the issue of nepotism; namely, when ties to relatives and friends are present in TMTs. By dividing nepotism into successor nepotism, which is related to new CEOs; schism nepotism, which is related to member exit; and proximity nepotism, which is related to relationship distance, the findings argue that tensions between subgroups significantly affect team cohesion and activate faultlines. This study also provides evidence that conflict management approaches are affected by the type of conflicts that existed in the early and late life cycle stages. Thus, this study provides an overview of how top management teams manage early levels of conflict types and how these approaches affect the later levels of conflict type, which are referred to as faultline conflicts. After examining the CEO-TMT interface, it is found that TMT members are mainly engaged in pre-emptive procedures that use cooperative conflict management approaches, whereas in reactive procedures, CEOs’ leadership approaches are critical in determining whether activated faultlines are exacerbated or lessened. The findings highlight the importance of early intervention and acknowledging the different effects of CEOs’ personal leadership approaches and TMT approaches in pre-emptive procedures and reactive procedures. The findings suggest that conflict types and conflict management approaches should be modelled together in order to understand team conflicts better. This study advances the Team Conflict Dynamics Model. It does this by examining conflict transformations in TMTs, the reciprocal effects of conflict management processes and the negative impact of events on emerging faultlines. This study’s new typology of faultline triggers helps scholars to understand whether there are differences among teams with faultlines that are dormant, faultlines that are active or dormant faultlines that have been triggered to become active. This study recognises and pinpoints the detrimental effects of the involvement of relatives and friends in TMTs and introduces the idea that nepotism can apply in non-family owned organisations. This process-based study acknowledges the different impacts of TMTs’ managerial practices and CEOs’ leadership practices, according to the pre-emptive and reactive stages of conflict management that are distinguished throughout the study

Microdynamics in diverse teams:A review and integration of the diversity and stereotyping literatures

Research on the consequences of diversity in teams continues to produce inconsistent results. We review the recent developments in diversity research and identify two shortcomings. First, an understanding of the microdynamics affecting processes and outcomes in diverse teams is lacking. Second, diversity research has tended to treat different social categories as equivalent and thus not considered how members’ experiences may be affected by their social category membership. We address these shortcomings by reviewing research on stereotypes, which indicates that stereotypes initiate reinforcing microdynamics among (a) attributions of a target team member’s warmth and competence, (b) perceiving members’ behavior toward the target team member, and (c) the target team member’s behavior. Our review suggests that perceivers’ impression formation motivation is the key determinant of the extent to which perceivers continue to treat a target based on categorization. On the basis of our review, we provide an integrative perspective and corresponding model that outlines these MIcrodynamics of Diversity and Stereotyping in Teams (MIDST) and indicates how stereotyping can benefit as well as harm team functioning. We discuss how this integrative perspective on the MIDST relates to the social categorization and the information/decision-making perspective, set a research agenda, and discuss the managerial implications

Leader-member exchange (LMX) differentiation and work outcomes:conceptual clarification and critical review

According to Leader-member Exchange (LMX) theory, leaders develop different quality relationships with followers in their team (termed LMX differentiation). An important theoretical question concerns how different LMX relationships within a team affect followers’ work outcomes. This paper provides a critical review of the concept of LMX differentiation. We propose that the LMX differentiation process leads to patterns of LMX relationships that can be captured by three properties (central tendency, variation, and relative position). We describe a taxonomy illustrating the different ways these properties have been conceptualized and measured. We identify two approaches to LMX differentiation as being a ‘perspective of the team’ (that are shared amongst team members) or a ‘perspective of the follower’ (subjective perceptions unique to each follower). These perspectives lead to different types of measures that predict different outcomes at the individual and team levels. We describe theoretical models employed to explain the effects of LMX differentiation (justice, social comparison and social identity theories). Generally, the lower the within-team variation in LMX or the more a team member’s LMX is higher than the mean team LMX, the better are the work outcomes, but many moderators condition these effects. Finally, we identify some key areas for future research

Partnerships for Sustainability in Contemporary Global Governance

Partnerships for Sustainability in Contemporary Global Governance investigates the goals, ideals, and realities of sustainability partnerships and offers a theoretical framework to help disentangle the multiple and interrelated pathways that shape their effectiveness. Partnerships are ubiquitous in research and policy discussions about sustainability and are important governance instruments for the provision of public goods. While partnerships promise a great deal, there is little clarity as to what they deliver. If partnerships are to break free from this paradox, more nuance and rigor are required for understanding and assessing their actual effects. This volume applies its original framework to diverse empirical cases in a way that could be extended to broader data sets and case studies of partnerships. The dual contribution of this volume, theoretical and empirical, holds promise for a more thorough and innovative understanding of the pathways to partnership effectiveness and the conditions that can shape their performance. The broad range of crosscutting analyses suggest important practical implications for the design of new partnerships and the updating of existing initiatives. This interdisciplinary book will be of great interest to researchers, students, and practitioners within international relations, political science, sociology, environmental studies and global studies, as well as the growing number of scholars in public policy, global health and organizational and business studies who are keen to gain a deeper understanding of the pathways and mechanisms that influence the outcomes and effectiveness of cross-sector collaboration and transnational governance more broadly. The Open Access version of this book, available at www .taylorfrancis.com, has been made available under a Creative Commons Attribution-Non Commercial-No Derivatives 4.0 license

A Metamotivational Approach to Understanding Managers’ Beliefs About Motivationally Diverse Teams in the Domain of Regulatory Mode

Cultivating effective teams requires managers to integrate the efforts of individuals who often vary in their backgrounds, skills, and identities. One way that team members can differ from each other is in their motivational orientation, or the reasons and ways that people pursue goals. Extant literature demonstrates that the complementary nature of two regulatory mode motivational orientations (locomotion and assessment) can benefit the performance of individuals and teams. Yet relatively little is known about what managers believe about how to manage this type of motivational diversity in teams. In this dissertation, I combine insights from the literature in motivation science, team management, and diversity to propose a novel perspective on managing motivation in teams. The first part of this dissertation (Studies 1-3) examines what people believe about the role of regulatory mode motivation in teams. Study 1 demonstrates that people, on average, recognize the differential benefits of locomotion and assessment for task performance. Using complementary methodologies, Studies 2 and 3 revealed that although people perceive motivationally diverse (vs. homogenous) teams as prone to conflict (Study 2), when prompted to describe their beliefs about motivation in teams they also recognize its potential benefits (Study 3). Following this, in the second part of this dissertation (Studies 4 and 5) I draw on recent advances in the management of team diversity to examine the strategies managers use when managing motivation in teams. In both hypothetical (Studies 4A and 4B) and consequential (Study 5) contexts, managers recognized the differential utility of different kinds of management strategies and were sensitive to intrateam dynamics in motivationally diverse and homogenous teams, but did not vary their use of different kinds of management strategies when managing motivational diversity in teams. By focusing on what managers themselves believe and do when managing motivational diversity in teams, this research offers a novel perspective on an understudied area of team management with implications for the theoretical and practical study of team management

Board nationality diversity: its measurement, determinants, and impacts on firm value and accounting conservatism

The composition of corporate boards has been under intense scrutiny by regulators since the collapse of Enron in 2002. An aspect of board composition is board diversity, which has gained the attention of regulators since 2003. Yet, empirical evidence on the outcomes of board diversity is inconclusive. One potential reason for the inconclusive results on board nationality diversity is that it has upside and downside aspects that should be accounted for simultaneously. In particular, I propose that any outcome of this diversity is the sum of the effects of two opposing forces: the level of diversity and the strength of cultural separation. Drawing on theories of resource dependence and groupthink, the level of dissimilarity in directors’ nationalities expands the pool of resources at the board’s disposal and mitigates the harmful behaviour of groupthink. However, nationality diversity among board members is accompanied by differences in their cultural backgrounds, which may serve as bases for cultural separation. This separation may cause poor communication, internal conflicts, and lack of trust between board members. The objective of this thesis is to provide a better understanding of how the above contrasting aspects of board nationality diversity may shape its outcomes. To this end, I distinguish between the upside and downside aspects of diversity in the first essay of this thesis. In this essay, I review the theoretical and empirical constructs of board diversity. I then introduce dissimilarity of director nationalities as a multi-categorical measure that accounts for the composition of foreign board members, to capture the level of board nationality diversity. The second essay investigates the determinants and the performance outcome of board nationality diversity, after accounting for its upside and downside aspects. Firm value is chosen to be the first outcome variable in this thesis as it is one of the most widely used proxies for board performance. In the third essay, accounting conservatism is chosen to be my second outcome variable. This is because diverse boards are found to adopt less risky financial policies. Therefore, I expect nationality-diverse boards and audit committees to demand greater accounting conservatism. The empirical tests in this thesis are based on large samples of UK firms over the period from 1999 to 2018. On the determinants of board nationality diversity, I find that the level of diversity is driven by the magnitude of foreign activities (measured by the proportion of foreign sales), rather than the number of geographical regions in which a firm operates. On the outcomes of board nationality diversity, I find that the level of diversity is associated with higher firm value. This association is not significantly mitigated by the strength of board cultural separation, but it is mitigated by the level of operational complexity. In addition, I find that levels of nationality diversity on the board and its audit committee positively impact accounting conservatism, whereas the strength of board cultural separation is not significantly related to accounting conservatism. This thesis makes five main contributions to the literature on board diversity, firm performance, and accounting conservatism. First, it proposes that the upside of diversity in multi-categorical attributes, such as nationality, is captured by the level of diversity. This level is maximized when each board member is unique in terms of the attribute under investigation. Second, it extends prior work on why foreign nationals exist on corporate boards by exploring why firms choose a given level of nationality diversity on their boards. Third, it accounts for both the positive and the negative aspects of board nationality diversity simultaneously, to identify its net impacts on firm value and accounting conservatism. Fourth, it provides robust evidence that board nationality diversity is positively associated with firm value and this association is moderated by levels of firm complexity. Fifth, it provides robust evidence that nationality diversity on the board and its audit committee positively impact accounting conservatism. The findings of this thesis have implications for board diversity in both research and practice. First, it suggests that both the positive and the negative aspects of board diversity should be accounted for simultaneously. Second, it reviews a set of theoretical and empirical constructs of diversity that could be applied to diversity within other workgroups (e.g., top management teams and audit teams). Third, it cautions against the use of empirical proxies that do not map onto the theoretical construct under investigation. Fourth, it directs companies’ attention to unique boards, in which, each board member is dissimilar to other board members in terms of a non-binary diversity attribute. This board structure maximizes (minimizes) the positive (negative) aspect of diversity in a non-binary attribute such as nationality. Fifth, it shows that board nationality diversity provides net benefits to shareholders only under certain circumstances (i.e., when firms are complex). Sixth, it identifies a new source of variation in accounting conservatism by providing robust evidence that nationality diversity on the board and its audit committee matter for conservatism in financial reporting. This study could therefore be of interest to academics, companies, investors, and regulators

Board nationality diversity: its measurement, determinants, and impacts on firm value and accounting conservatism

The composition of corporate boards has been under intense scrutiny by regulators since the collapse of Enron in 2002. An aspect of board composition is board diversity, which has gained the attention of regulators since 2003. Yet, empirical evidence on the outcomes of board diversity is inconclusive. One potential reason for the inconclusive results on board nationality diversity is that it has upside and downside aspects that should be accounted for simultaneously. In particular, I propose that any outcome of this diversity is the sum of the effects of two opposing forces: the level of diversity and the strength of cultural separation. Drawing on theories of resource dependence and groupthink, the level of dissimilarity in directors’ nationalities expands the pool of resources at the board’s disposal and mitigates the harmful behaviour of groupthink. However, nationality diversity among board members is accompanied by differences in their cultural backgrounds, which may serve as bases for cultural separation. This separation may cause poor communication, internal conflicts, and lack of trust between board members. The objective of this thesis is to provide a better understanding of how the above contrasting aspects of board nationality diversity may shape its outcomes. To this end, I distinguish between the upside and downside aspects of diversity in the first essay of this thesis. In this essay, I review the theoretical and empirical constructs of board diversity. I then introduce dissimilarity of director nationalities as a multi-categorical measure that accounts for the composition of foreign board members, to capture the level of board nationality diversity. The second essay investigates the determinants and the performance outcome of board nationality diversity, after accounting for its upside and downside aspects. Firm value is chosen to be the first outcome variable in this thesis as it is one of the most widely used proxies for board performance. In the third essay, accounting conservatism is chosen to be my second outcome variable. This is because diverse boards are found to adopt less risky financial policies. Therefore, I expect nationality-diverse boards and audit committees to demand greater accounting conservatism. The empirical tests in this thesis are based on large samples of UK firms over the period from 1999 to 2018. On the determinants of board nationality diversity, I find that the level of diversity is driven by the magnitude of foreign activities (measured by the proportion of foreign sales), rather than the number of geographical regions in which a firm operates. On the outcomes of board nationality diversity, I find that the level of diversity is associated with higher firm value. This association is not significantly mitigated by the strength of board cultural separation, but it is mitigated by the level of operational complexity. In addition, I find that levels of nationality diversity on the board and its audit committee positively impact accounting conservatism, whereas the strength of board cultural separation is not significantly related to accounting conservatism. This thesis makes five main contributions to the literature on board diversity, firm performance, and accounting conservatism. First, it proposes that the upside of diversity in multi-categorical attributes, such as nationality, is captured by the level of diversity. This level is maximized when each board member is unique in terms of the attribute under investigation. Second, it extends prior work on why foreign nationals exist on corporate boards by exploring why firms choose a given level of nationality diversity on their boards. Third, it accounts for both the positive and the negative aspects of board nationality diversity simultaneously, to identify its net impacts on firm value and accounting conservatism. Fourth, it provides robust evidence that board nationality diversity is positively associated with firm value and this association is moderated by levels of firm complexity. Fifth, it provides robust evidence that nationality diversity on the board and its audit committee positively impact accounting conservatism. The findings of this thesis have implications for board diversity in both research and practice. First, it suggests that both the positive and the negative aspects of board diversity should be accounted for simultaneously. Second, it reviews a set of theoretical and empirical constructs of diversity that could be applied to diversity within other workgroups (e.g., top management teams and audit teams). Third, it cautions against the use of empirical proxies that do not map onto the theoretical construct under investigation. Fourth, it directs companies’ attention to unique boards, in which, each board member is dissimilar to other board members in terms of a non-binary diversity attribute. This board structure maximizes (minimizes) the positive (negative) aspect of diversity in a non-binary attribute such as nationality. Fifth, it shows that board nationality diversity provides net benefits to shareholders only under certain circumstances (i.e., when firms are complex). Sixth, it identifies a new source of variation in accounting conservatism by providing robust evidence that nationality diversity on the board and its audit committee matter for conservatism in financial reporting. This study could therefore be of interest to academics, companies, investors, and regulators