Assessing psychological and environmental factors influencing the long-term orientation of TMTs

Abstract

Purpose

This study identifies and examines psychological and environmental factors that influence the long-term orientation of top management teams (TMTs).

Design/methodology/approach

Data on S&P 500 companies from 2011 to 2020 are collected from the Compustat database. Additional variables were measured through content analysis of earnings conference calls. This study used two-stage least squares regression with fixed effects to analyze the data and test the hypotheses. Appropriate diagnostic tests were conducted to ensure validity and eliminate endogeneity.

Findings

The results indicate that a chief executive officer’s (CEO) promotion focus positively and significantly influences the TMT's long-term orientation. However, the influence of prevention focus is statistically insignificant. Furthermore, the results indicate that environmental hostility moderates both relationships.

Practical implications

The TMT's long-term orientation can be improved through the insights provided by this study.

Originality/value

To the authors’ knowledge, this is the first study to examine the collective effects of psychological and task environmental factors on the long-term orientation of the TMT. Additionally, this study sheds light on the internal dynamics of the top-management team.

Citation

Thapa, N. and Shah, P. (2023), "Assessing psychological and environmental factors influencing the long-term orientation of TMTs", Journal of Advances in Management Research, Vol. 20 No. 2, pp. 265-290. https://doi.org/10.1108/JAMR-02-2022-0029