The purpose of this paper is to attempt to verify the predicted relationship between the demographic (i.e. tenure, functional background, etc.) difference and cognitive difference among top managers and examine how such a relationship is affected by the communication among top managers.
The authors hypothesized that there is a positive relationship between demographic deviation and cognitive deviation of a focal manager on a TMT, and that such a relationship is mediated by the degree of communication that the focal manager has with other team members on the TMT. Using Structural Equation Modeling techniques, these hypotheses were tested based on a sample of 348 top managers that consist of 28 top management teams.
It was found that the hypothesized relationship between demographic deviation and cognitive deviation of a focal top manager was supported with respect to the tenure of a manager, but not the functional background of a manager. Moreover, it was found that communication frequency of a focal manager with other team members mediated the relationship between the tenure deviation and the cognitive deviation of the focal manager and that tenure deviation negatively influenced communication frequency, which in turn, negatively influenced the cognitive deviation of the manager.
These findings imply that: when constructing a competitive top management, practitioners such as boards of directors of a firm should pay more attention to the tenure diversity of a top management team because tenure diversity influences the cognitive diversity of the team; and communication among members of a management team can reduce the cognitive differences among members. However, communication happens more frequently among managers with similar tenure than among managers with dissimilar tenure. To promote consensus, managers need to watch for the forming of group fault lines along tenure within their teams.
As far as is known, this is the first study that uses relational demography to examine the influence of tenure difference on cognitive difference among members of a top management team and to expose a mediating role played by communication frequency.
