The Study On The Relationship Between Top Management Team Characteristics And Firm Performance

Since June 2004 the introduction of The Small and Medium Enterprises (SME) board, is the concern of many researchers. Our economic in transition and emerging market stage, SME as the main channel for expanding employment and technological innovation force, takes important part in China's economic and social development. Due to the characteristics of SME listed decide the strategic position of senior managers in the company, senior managers are very important to enterprise performance and organization development since they take the mission of establishing and implementing corporate strategies, and the decision-making and executions of TMT (top management team) affect the survival of the company. Upper Echelons Perspective believes characteristics of TMT will affect the cognitive basis, insight and values, and their role in the process would affect the competitive behavior, thereby affecting enterprise performance.At present, characteristics of TMT are still in infancy in china, and the focus of the SME listed less, because decision-making and implementation capacity of TMT are difficult to measure, demographic characteristics of TMT as a proxy variable, which are objective, comprehensive, logical consistency, predictability, verifiability and quantifiable.The thesis uses the characteristics of TMT as an innovative angle to explore the way to improve SME listed performance, based on the Carpenter, Geletkanycz, & Sanders'Stylized Model of the Upper Echelons perspective. This study also has some practical significance. The executives responsible for corporate strategy development understand competitor's TMT'S characteristics, then predicting the changes in business strategy and helping the enterprises to actively respond to market competition; The board directors or CEO in charge of hiring and selecting executives, understand the role of TMT for increasing enterprise performance, contributing to selection of the right executives; for enterprises, providing advice and experience for the development of SME listed. This paper ideas:chapterⅠ, introduces the background, significance, research framework, technology and innovation routes;Ⅱ, introduction to the Development Theory of TMT to determine the theoretical model based on this paper; chapterⅢ, the relevant literature Review, which analysis and research TMT at home and abroad; chapterⅣ, presenting research framework, hypothesis and variables selection; chapterⅤ, empirical testing and results. Including descriptive statistics, correlation analysis and regression analysis; ChapterⅥ, conclusions.Based on the analysis of basic theory, status on the basis of the SME listed with 202 samples during 2007-2008. What's more, the variables are divided into three groups:non-heterogeneity demographic characteristics, heterogeneity demographic characteristics and agency theory characteristics. Among them, the non-heterogeneity of the independent variables include the average age, education, political background, gender and level of remuneration and shareholding mean of TMT, heterogeneity of the independent variables include age heterogeneity, education level heterogeneity, tenure heterogeneity, professional background heterogeneity and pay heterogeneity. Which examines the relationship between TMT demographic characteristics of CEO,TMT and SME listed performance. The paper researches the relationship, not only measured from the overall analysis, also from the traditional industry and advanced science and technology industry, and then give suggestions based on the results of empirical research.From the perspective of the overall sample, empirical results show that:the level of education of CEO and TMT is positively correlated with TOBIN'S Q, the average tenure of CEO is negatively correlated with TOBIN'S Q, the ownership level of TMT is positively correlated with ROE (the net rate of equity) and TOBIN'S Q. Mean Salary of TMT is positively correlated with ROE. TMT gender heterogeneity is negatively associated with TOBIN'S Q; While in TMT heterogeneity team:TMT age heterogeneity and education level heterogeneity are negatively associated with TOBIN'S Q; TMT professional background heterogeneity or pay heterogeneity are positively associated with ROE or TOBIN'S Q. The thesis bases on SME listed and culture-specific environment in Chinese stock exchange market, and discuss the implications of the empirical results from cultural, historical and the institutional perspectives. Then providing recommendations for future development of SME listed. From the perspective of different industries, empirical results show that:for traditional industries, TMT gender heterogeneity and education level are negatively associated with TOBIN'S Q, Mean Salary of TMT is positively correlated with ROE, TMT ownership level is positively correlated with ROE and TOBIN'S Q, TMT tenure heterogeneity and education level heterogeneity are negatively associated with TOBIN'S Q, and education level heterogeneity are negatively associated with ROE, TMT professional background heterogeneity is positively associated with ROE; for advanced science and technology industries, the ownership level of TMT is positively associated with ROE and TOBIN'S Q, the mean salary of TMT is positively associated with ROE, education level heterogeneity, average heterogeneity, tenure heterogeneity of TMT are negatively associated with ROE. At last, based on the result and explanation, give some suggestions on how to construct TMT and how to improve the operation of TMT from different industries.Based on the overall sample and industry sample on the empirical analysis will help us to understand that SME listed is in hiring, selection and arrangement of TMT, to consider some possible impact of TMT characteristics. Enterprise features and industry angle particularly, summing up TMT characteristics of each industry effectively to guide construction and operation of TMT, to some extent, enhancing firm performance.