Pay Disparities Within Top Management Groups: Evidence of Harmful Effects on Performance of High-Technology Firms

Published Online:https://doi.org/10.1287/orsc.1050.0128

References

  • Abowd J. M. Does performance-based managerial compensation affect corporate performance? Indust. Labor Relations Rev. (1990) 43:52–73CrossrefGoogle Scholar
  • Adams J. S., Berkowitz L. Inequity in social exchange. Advances in Experimental Social Psychology (1965) 2(Academic Press, New York) 267–299CrossrefGoogle Scholar
  • Agrawal A., Jaffe J. F., Mandelker G. N. The post-merger performance of acquiring firms: A re-examination of an anomaly. J. Finance (1992) 47:1605–1621CrossrefGoogle Scholar
  • Aguinis H. Statistical power problems with moderated multiple regression in managerial research. J. Management (1995) 21:1141–1158Google Scholar
  • Aguinis H., Stone-Romero R. F. Methodological artifacts in moderated multiple regression and their effects on statistical power. J. Appl. Psych. (1997) 82:192–206CrossrefGoogle Scholar
  • Allison P. D. Measures of inequality. Amer. Sociological Rev. (1978) 43:865–880CrossrefGoogle Scholar
  • Barnard C.The Functions of the Executive (1938) (Harvard University Press, Cambridge, MA) Google Scholar
  • Baron J. N., Pfeffer J. The social psychology of organizations and inequality. Soc. Psych. Quart. (1994) 57(3):190–209CrossrefGoogle Scholar
  • Becker B. E., Huselid M. A. The incentive effects of tournament compensation systems. Admin. Sci. Quart. (1992) 37:336–350CrossrefGoogle Scholar
  • Bishop J. The recognition and reward of employee performance. J. Labor Econom. (1987) 5:S35–CrossrefGoogle Scholar
  • Brealey R. A., Myers S. C.Principles of Corporate Finance (1991) (McGraw-Hill, New York) Google Scholar
  • Burns T., Stalker G. M.The Management of Innovation (1961) (Tavistock, London, UK) Google Scholar
  • Cowherd D. M., Levine D. I. Product quality and pay equity between lower-level employees and top management: An investigation of distributive justice theory. Admin. Sci. Quart. (1992) 37:302–320CrossrefGoogle Scholar
  • Crosby F. A model of egoistical relative deprivation. Psych. Rev. (1976) 83:85–113CrossrefGoogle Scholar
  • Cusatis P. J., Miles J. A., Woolridge J. R. Restructuring through spinoffs: The stock market evidence. J. Financial Econom. (1993) 33:293–311CrossrefGoogle Scholar
  • Cyert R. M., March J. G.A Behavioral Theory of the Firm (1963) (Prentice-Hall, Englewood Cliffs, NJ) Google Scholar
  • Desai H., Jain P. C. Long-run common stock returns following stock splits and reverse splits. J. Bus. (1997) 70:409–433CrossrefGoogle Scholar
  • Deutsch M.Distributive Justice: A Social Psychological Perspective (1985) (Yale University Press, New Haven, CT) Google Scholar
  • Dye R. A. The trouble with tournaments. Econom. Inquiry (1984) 22:147–149CrossrefGoogle Scholar
  • Ehrenberg R. G., Bognanno M. L. The incentive effects of tournaments revisited: Evidence from the European PGA Tour. Indust. Labor Relations Rev. (1990) 43:745–785CrossrefGoogle Scholar
  • Eisenhardt K. M., Bourgeois L. J. Politics of strategic decision-making in high-velocity environments: Toward a midrange theory. Acad. Management J. (1988) 31:737–770CrossrefGoogle Scholar
  • Fama R. F. Efficient capital markets II. J. Finance (1991) 46:1575–1618CrossrefGoogle Scholar
  • Festinger L. A theory of social comparison processes. Human Relations (1954) 7:117–140CrossrefGoogle Scholar
  • Finkelstein S., Hambrick D. C.Strategic Leadership: Top Executives and Their Effects on Organizations (1996) (West Publishing Company, Saint Paul, MN) Google Scholar
  • Frank R. H., Cook P. J.The Winner-Take-All Society (1995) (Free Press, New York) Google Scholar
  • Fredrickson J. W., Iaquinto A. Inertia and creeping rationality in strategic decision processes. Acad. Management J. (1989) 32:516–542CrossrefGoogle Scholar
  • Galbraith J.Designing Complex Organizations (1973) (Addison-Wesley, Reading, MA) Google Scholar
  • Gomez-Mejia L. R., Balkin D. B. Effectiveness of individual and aggregate compensation strategies. Indust. Relations (1989) 28:431–445Google Scholar
  • Gomez-Mejia L. R., Balkin D. B.Compensation, Organizational Strategy, and Firm Performance (1992) (Southwestern, Cincinnati, OH) Google Scholar
  • Gupta A. K., Govindarajan V. Business unit strategy, managerial characteristics, and business unit effectiveness at strategy implementation. Acad. Management J. (1984) 27:25–41CrossrefGoogle Scholar
  • Hambrick D. C. Top management groups: A conceptual integration and reconsideration of the “team” label. Res. Organ. Behavior (1994) 16:171–213Google Scholar
  • Hambrick D. C. Fragmentation and the other problems CEOs have with their top management teams. California Management Rev. (1995) 37:110–127CrossrefGoogle Scholar
  • Hambrick D. C., Hambrick D. C., Nadler D. A., Tushman M. L. Corporate coherence and the top management team. Navigating Change: How CEOs, Top Teams, and Boards Steer Transformation (1998) (Harvard Business School Press, Boston, MA) Google Scholar
  • Hambrick D. C., D’Aveni R. A. Top team deterioration as part of the downward spiral of large corporate bankruptcies. Management Sci. (1992) 38:1445–1466LinkGoogle Scholar
  • Hart S. L., Quinn R. E., Gomez-Mejia L. R., Lawless M. W. Executive leadership and performance: Comparing high- and low-technology firms. Advances in Global High-Technology Management (1992) (JAI Press, Greenwich, CT) Google Scholar
  • Hayward M., Hambrick D. C. Explaining the premiums paid for large acquisitions: Evidence of CEO hubris. Admin. Sci. Quart. (1997) 42:103–127CrossrefGoogle Scholar
  • Ikenberry D. L., Rankine G., Stice E. K. What do stock splits really signal? J. Financial Quantitative Analysis (1996) 31:357–375CrossrefGoogle Scholar
  • Lambert R. A., Larcker D. F., Weigelt K. The structure of organizational incentives. Admin. Sci. Quart. (1993) 38:438–461CrossrefGoogle Scholar
  • Lawler E. E., Gomez-Mejia L. R. Pay for performance: A strategic analysis. Compensation and Benefits (1989) (BNA, Washington, D.C) Google Scholar
  • Lawrence P., Lorsch J. W.Organization and Environment (1967) (Harvard Graduate School of Business Administration, Boston, MA) Google Scholar
  • Lazear E. P., Rosen S. Rank-order tournaments as optimum labor contracts. J. Political Econom. (1981) 89:841–864CrossrefGoogle Scholar
  • Leonard J. S. Executive pay and firm performance. Indust. Labor Relations Rev. (1990) 43:13S–29CrossrefGoogle Scholar
  • Leonard-Barton D. Core capabilities and core rigidities: A paradox in managing new product development. Strategic Management J. (1992) 13:111–126CrossrefGoogle Scholar
  • Main B. G., O’Reilly C. A., Wade J. Top executive pay: Tournament or teamwork? J. Labor Econom. (1993) 11:606–628CrossrefGoogle Scholar
  • McCann J. E., Hinkin T. R., Gomez-Mejia L. R., Gomez-Mejia L. R., Lawless. Managerial succession patterns in high-technology and traditional industries. Advances in Global High-Technology Management (1992) (JAI Press, Greenwich, CT) Google Scholar
  • Mehran H. Executive compensation structure, ownership, and firm performance. J. Financial Econom. (1995) 38:163–184CrossrefGoogle Scholar
  • Michel J., Hambrick D. C. Diversification posture and top management team characteristics. Acad. Management J. (1992) 35:9–37CrossrefGoogle Scholar
  • Miles R. E., Snow C. C.Organizational Strategy, Structure, and Process (1978) (McGraw-Hill, New York) Google Scholar
  • Milgrom P., Roberts J. An economic approach to influence activities in organizations. Amer. J. Sociology (1988) 94(Supplement):S154–CrossrefGoogle Scholar
  • Milkovich G. T., Newman J. M.Compensation (1996) (Richard D. Irwin, Chicago, IL) Google Scholar
  • Mitchell T. R., Silver W. S. Individual and group goals when workers are interdependent: Effects on task strategies and performance. J. Appl. Psych. (1990) 75:185–193CrossrefGoogle Scholar
  • Morone J. G.Winning in High-Technology Markets: The Role of General Management (1993) (Harvard Business School Press, Boston, MA) Google Scholar
  • Nonaka I. Redundant, overlapping organization: A Japanese approach to managing the innovation process. California Management Rev. (1990) 32(3):84–97CrossrefGoogle Scholar
  • O’Reilly C. A., Main B. G., Crystal G. S. CEO compensation as tournament and social comparison: A tale of two theories. Admin. Sci. Quart. (1988) 33:257–274CrossrefGoogle Scholar
  • Pfeffer J., Langton N. The effect of wage dispersion on satisfaction, productivity, and working collaboratively: Evidence from college and university faculty. Admin. Sci. Quart. (1993) 38:382–407CrossrefGoogle Scholar
  • Pfeffer J., Langton N. Wage inequality and the organization of work: The case of academic departments. Admin. Sci. Quart. (1988) 33:588–606CrossrefGoogle Scholar
  • Pitts R. A. Incentive compensation and organization design. Personnel J. (1974) March):49–57Google Scholar
  • Pitts R. A. Toward a contingency theory of multibusiness organization design. Acad. Management Rev. (1980) 5:203–210CrossrefGoogle Scholar
  • Rivkin J. W., Porter M. E. Matching Dell. (1999) (Harvard Business School, Boston, MA) . Case 9-799-158Google Scholar
  • Rosen S. Prizes and incentives in elimination tournaments. Amer. Econom. Rev. (1986) 76:701–715Google Scholar
  • Rosenbaum M. E., Moore D. L., Cotton J. L., Cook M. S., Hiester R. A., Shovar M. N. Group productivity and process: Pure and mixed reward structures and task interdependence. J. Personality Soc. Psych. (1980) 39:626–642CrossrefGoogle Scholar
  • Salter M. A. Tailor incentive compensation to strategy. Harvard Bus. Rev. (1973) 51:94–102Google Scholar
  • Sanders W. G. Behavioral responses of CEOs to stock ownership and stock option pay. Acad. Management J. (2001) 44(3):477–492CrossrefGoogle Scholar
  • Schonfeld & AssociatesR&D Ratios and Budgets (1991) (Schonfeld & Associate Inc., Lincolnshire, IL) Google Scholar
  • Schonfeld & AssociatesR&D Ratios and Budgets (1992) (Schonfeld & Associates Inc., Lincolnshire, IL) Google Scholar
  • Schoonhoven C. B., Jelinek M., Van Glinow M., Mohrman S. Dynamic tension in innovative, high-technology firms: Managing rapid technological change through organizational structure. Managing Complexity in High Technology Organizations (1990) (Oxford University Press, New York) 90–118Google Scholar
  • Shaw J. D., Gupta N., Delery J. E. Pay dispersion and workforce performance: Moderating effects of incentives and interdependence. Strategic Management J. (2002) 23:491–512CrossrefGoogle Scholar
  • Siegel P. A. Top management team compensation: A reorientation of theory and method. Acad. Management Meeting (2005) (Cincinnati, OH)Google Scholar
  • Siegel P. A., Hambrick D. C., Dutton J., Baum J. Business strategy, collaboration, and the social psychology of top management teams. Advances in Strategic Management (1996) 13(JAI Press, Greenwich, CT) 89–117Google Scholar
  • Simsek Z., Veiga J. F., Lubatkin M. H., Dino R. N. Modeling the multilevel determinant of top management team behavioral integration. Acad. Management J.ForthcomingGoogle Scholar
  • Sirower M. L.The Synergy Trap: How Companies Lose the Acquisition Game (1997) (Free Press, New York) Google Scholar
  • Solomon E., Laya J., Robichek A. A. Measurement of company profitability: Some systematic errors in the accounting rate of return. Financial Research and Management Decisions (1967) (John Wiley & Sons, Inc., New York) 152–183Google Scholar
  • Staw B. M., Epstein L. D. What bandwagons bring: Effects of popular management techniques on corporate performance, reputation, and CEO pay. Admin. Sci. Quart. (2000) 31:439–465Google Scholar
  • Thompson J. D.Organizations in Action (1967) (McGraw-Hill, New York) Google Scholar
  • Tushman M., Anderson P. Technological discontinuities and organizational environments. Admin. Sci. Quart. (1986) 31:439–465CrossrefGoogle Scholar
  • Tushman M. L., Nadler D. A. Information processing as an integrating concept in organizational design. Acad. Management Rev. (1978) 3:613–624Google Scholar
  • Tushman M. L., O’Reilly III C. S.Winning Through Innovation: A Practical Guide to Organizational Change and Renewal (1997) (Harvard Business School, Boston, MA) CrossrefGoogle Scholar
  • Vancil R. F.Decentralization: Managerial Ambiguity by Design (1979) (Financial Executives Research Foundation, New York) Google Scholar
  • Wageman R. Interdependence and group effectiveness. Admin. Sci. Quart. (1995) 40(1):145–180CrossrefGoogle Scholar
  • Wageman R., Baker G. Incentives and cooperation: The joint effects of task and reward interdependence on group performance. J. Organ. Behavior (1997) 18(2):139–158CrossrefGoogle Scholar
  • Weick K. E.The Social Psychology of Organizing (1969) (Addison-Wesley, Reading, MA) Google Scholar
INFORMS site uses cookies to store information on your computer. Some are essential to make our site work; Others help us improve the user experience. By using this site, you consent to the placement of these cookies. Please read our Privacy Statement to learn more.