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Changes in top management team strategies caused by the external financial environment

Idoya Ferrero-Ferrero (Finance and Accounting Department, Universitat Jaume I, Castellón de la Plana, Spain)
María Jesús Muñoz-Torres (Finance and Accounting Department, Universitat Jaume I, Castellón de la Plana, Spain)
María Ángeles Fernández-Izquierdo (Finance and Accounting Department, Universitat Jaume I, Castellón de la Plana, Spain)

Leadership & Organization Development Journal

ISSN: 0143-7739

Article publication date: 7 September 2015

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Abstract

Purpose

The purpose of this paper is to analyse whether the onset of the financial crisis caused changes in the influence of top management team (TMT) on corporate results.

Design/methodology/approach

The sample is comprised of the list of S & P 500 Index firms between 2002 and 2008. The study uses a longitudinal panel methodology applying a two-step GMM estimator system. This approach addresses potential unobserved heterogeneity, simultaneity, and dynamic endogeneity.

Findings

The primary results reveal that the onset of the financial crisis stimulated those TMTs with large teams and a high frequency of meetings to improve corporate performance, without leading to a reduction in corporate risk taking.

Originality/value

This study reveals that different environmental conditions call for different behaviour from TMTs to fulfil their responsibilities. This study also suggests changes in normative and voluntary guidelines for improving the quality of the TMT’s work.

Keywords

Acknowledgements

The authors acknowledge the financial support received from P1•1B2013-31 and P1•1B2013-48 projects through the Universitat Jaume I and Sustainability and Corporate Social Responsibility Master Degree (UJI – UNED).

Citation

Ferrero-Ferrero, I., Muñoz-Torres, M.J. and Fernández-Izquierdo, M.Á. (2015), "Changes in top management team strategies caused by the external financial environment", Leadership & Organization Development Journal, Vol. 36 No. 7, pp. 849-866. https://doi.org/10.1108/LODJ-02-2014-0019

Publisher

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Emerald Group Publishing Limited

Copyright © 2015, Emerald Group Publishing Limited

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