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


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.


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

Full Text:



Bantel, K.A., & Jackson, S.E. (1989). Top Management and Innovations in

Banking: Does the Composition of Top Management make a Difference? Strategic Management Journal, 10, 107-124.

Brockmann, E.N., & Anthony, W.P. (2002). Tacit Knowledge and Strategic

Decision Making, Group & Organization Management, 27, 436-455.

Carson, M.C., Mosley, D.C., & Boyar, S.L. (2004). Performance Gains Through

Diverse Top Team Management Team Performance Management, Strategic Management Journal, 10, 121-126.

Cummings, A., Zhou, J. & Oldham, G.R. (1993). Demographic Differences and

Employee Work Outcomes: Effects on Multiple Comparisons. Paper Presented at the Annual Meeting of the Academy of Management, Atlanta. GA.

Damanpour, F. (1996). Organizational Complexity and Innovation: Developing

and Testing Multiple Contingency Models, Management Science 42(5), 693-716.

Dollinger, M. (1984). Environmental Boundary Spanning and Information

Processing Effects on Organization Performance, Academy of Management Journal, 27, 351-368.

Finkelstein, S. & Hambrick, D.C. (1990). Top Management Team Tenure and

Organizational Outcomes: The Moderating Role of Managerial Discretion, Administrative Science Quarterly, 35, 484-503.

Fredrickson, J.W. & Mitchel, T.R. (1984). Strategic Decision Process:

Comprehensiveness and Performance in an Industry with Unstable Environment, Academy of Management Journal, 27, 399-423.

Gebert, D. (2004). Durch Diversity zu mehr Team Innovation (Diversity by

more Team), Die Betriebswirtschft, 64, 412-430.

Hambrick, D.C., & Mason, P.A. (1984). Upper Echelons: The Organization as a

Reflection of its Top Managers, Academy of Management Review, 9, 193-206.

Hambrick, D.C. (2007). Upper Echelons Theory: An Update, Academy of

Management Review, 32, 659-684.

Hinsz, V., Tindale, R., & Vollrath, D. (1997). The Emerging Conceptualization

of Group as Information Processors, Psychology Bulletin, 121, 43-64.

Homberg, F., & Bui, H.T.M. (2013). Top Management Team Diversity: A

Systematic Review, Group & Organization Management, 38(4), 455.

Hitt, M.A., and Tyler, B.B. (1991). Strategic Decision Models: Integrating

Different Perspectives’, Strategic Management Journal, 12(5), 327-351.

Johnston, W.B.,& Packer, A.H. (1987). Workforce (200), Indianapolis IN:

Hudson Institute.

Kakabadse, N. K. & Kakabadse, A. P. (2006). Chairman of the Board:

Demographics Effects on Role Pursuit, Journal of Management Development, 26(2), 169-192.

Kaplan, R.S., & Norton, D.P. (1992). The Balanced Scorecard Measure that

Drives Performance. Harvard Business Reviewed, Jan-Feb.

Marimuthu, M., & Kolandaisamy, I. (2009). Can Demographic Diversity in Top

Management Team Contribute for Greater Financial Performance? An Empirical Discussion, The Journal of International Social Research, 2(8), 274-286.

Michel, A.I. & Hambrick, D.C. (1992). Diversification Posture and the

Characteristics of the Top Management Team, Academy of Management Journal, 35, 9-37.

Murray, A. (1989). Top Management group heterogeneity and firm

performance, Strategic Management Journal, 10, 125-141.

Mutuku, C., Obonyo, P.K., & Awino, Z.B., (2013). Top Management Team

Diversity, Quality of Decisions and Performance of Commercial Banks in Kenya, Asian Journal of Humanities and Social Sciences, 1(3), 101-113.

Mutuku, C., Obonyo, P.K., Awino, Z.B., & Musyoka, M. (2013). Top

Management Team Diversity, Involvement Culture and Performance of Commercial Banks in Kenya, DBA Africa Management Review, 3(2), 70-80.

Nielsen, S. (2010b). Top Management Team Internationalization and Firm

Performance, Management International Review, 50, 185-206.

Nielsen, B.B., & Nielsen, S. (2012). Top Management Team National Diversity

and Firm Performance: A Multilevel Study, Strategic Management Journal, 43, 158-172.

Ongore, V.O. (2008). The Effects of Ownership Structure, Board Effectiveness

and Managerial Discretion on Performance of Listed Companies in Kenya: Unpublished PhD Thesis, School of Business, University of Nairobi.

Pitts, D. (2009). Diversity Management, Job Satisfaction and Performance:

Evidence from U.S Federal Agencies, Public Administration Review.

Quian, C., Cao, Q., & Takeuchi, R. (2013). Top Management Team Functional

Diversity and Organizational Innovation in China: The Moderating Effects of Environment, Strategic Management Journal, 34, 110-120.

Simons, T., Pelled, L.H., &Smith, K.A. (1999). Making Use of Difference:

Diversity, Debate and Decision Comprehensiveness in Top Management Teams. Academy of Management Journal, 42(6), 662-673.

Stock, R. (2004). Drivers of Team Performance: What do we Know and What

have we Still to Learn?, Schmalenbach Business Review, 56, 274-306.

Tsui, A.S., Egan, T.D., & O’Reilly, C.A. (1992). Being Different: Relational

Demography and Organizational Attachment, Administrative Science Quarterly, 37, 549-579.

Wiersema, M.F., & Bantel, K.A., (1992). Top Management Team Demography

and Corporate Strategic Change, Academy of Management Journal, 35, 91-121.

Williams, K.Y., & O’Reilly, C.A. (1998). Demography and Diversity in

Organizations: A Review of 40 Years of Research. Research in Organizational Behaviour, 20, 77-140.

Van Knippenberg, D., De Dreu, C., & Homan, A. (2004). Work Group

Diversity and Group performance: An Integrative Model and Research Agenda. Journal of Applied Psychology, 89, 1008-1022.

Van knippenerg, D., & Schippers, M.C. (2007). Work Group Diversity, Annual

Review of Psychology, 58, 1008-1022.


  • There are currently no refbacks.