EFFECTS OF TOP MANAGEMENT TEAM DIVERSITY ON ORGANIZATIONAL PERFORMANCE IN THE BANKING INDUSTRY

R. O. Akewushola, A. F. Elegunde, R. O. Saka

Abstract


The purpose of this study is to empirically examine the effects of Top Management Team diversity on organizational performance in the banking industry. Expo facto research design was adopted in this study. This study uses secondary data. The data were gotten from Annual reports of selected Banks. The selection of the banks included in the study was based on their performance index from 2010 to 2014. Simple regression analysis was used to analyze the data. Two hypotheses were tested. The result of hypothesis one revealed that the coefficient of determination (R2) value is 0.089 and the P value is 0.201. This implies that there are only 8.9% effects of TMT gender diversity on return on equity, but the P value is greater than 0.05. The result of the second hypothesis revealed that the coefficient of determination (R2) value is 0.012 and the P value is 0.283. This implies that the independent variable account for only 1.2% of the total variation of return on asset within the period under review. The results of the study revealed that both TMT gender diversity and TMT size has positive effects on both return on equity and return on assets, but the effects is not significant. Thus the study recommended that business entities needs to increase diversity in TMT in order to achieve sustainable competitive advantage in the global market to ensure greater creativity, innovativeness and better decision making process.


Keywords


Top team Management, Diversity, Return on Asset, Gender Diversity

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