The Effect of Top-management Team Heterogeneity on Performance in Institutions of Higher Education

ABSTRACT

Empirical studies aiming to test theories connecting management to organizational performance in public administration have generally focused on a single executive at the apex of the organization. Yet organizations are increasingly governed by top-management teams (TMTs) composed of two or more individuals. In these team settings, managers have varying levels and types of previous experience, education, and socialization, and these backgrounds and skill sets can lead managers to hold different values that affect decision-making processes and, consequently, organizational performance. Whether higher levels of heterogeneity are linked to variation in outcomes, however, is debated and has rarely been examined in the context of large public bureaucracies. Using data on university presidents and provosts in U.S. higher education, this study finds that heterogeneity in top-management teams does affect performance indicators for some, but not all, goals of access, affordability, and quality.

KEYWORDS:

• heterogeneity
• higher education
• top management team

Acknowledgments

Special thanks to Ken Meier, Claire Stieg, and Emmalea Laningham for aid in the collection of data. Comments from K. Jurée Capers, Mallory Compton, and three anonymous reviewers were tremendously helpful in revising this manuscript.

Notes

Presidents, sometimes referred to as chancellors, denote the executive of a single campus of higher education, not a system (i.e., University of Maryland–College Park as opposed to the University of Maryland system). Provosts may also be referred to as chief academic officers or executive vice presidents, depending on various nomenclatures. These terms will be used interchangeably here.

Much literature has developed on the process of socialization, and many of these studies include measures of experience, insider and outsider status, and age (Dutton & Duncan, 1987). While this research is important, it often does not speak directly to TMT heterogeneity or the link between TMT heterogeneity and organizational performance.

This study includes both public and private institutions. While private institutions have somewhat different funding structures, especially in terms of state appropriations, they are much like their public 4-year counterparts in terms of mission, size, and structure. When a bivariate control for private organizations is included in GLS models (they cannot be added to FE models, given that the designation as private does not vary over time), it achieves significance in the two models related to monetary resources (private institutions in this sample, on average, have lower R&D expenditures and higher sticker prices).

An outside-outside match is likely to be theoretically different from an inside-inside match. As there is only one president-provost pairing in this dataset in which both individuals were hired from outside of higher education (both came from public agencies), the two types cannot be compared here but should receive additional focus in future research.

One limitation of this measure is that it may be possible for two individuals to have different functional backgrounds that result in both individuals having low h indices. This would create a low difference value that may be somewhat misleading.

Models including only those individuals with Ph.D.s were run to determine whether differences in fields of study were meaningful. Using 10 broad categories of degrees (e.g., humanities, social sciences, life science, etc.), a dichotomous variable for difference in Ph.D. type was significant only for R&D spending. Among multiple explanations, this may be linked to different research norms across academic disciplines.

The terms Latino and Hispanic are used interchangeably in this study. Institutional data uses the term “Hispanic” while many presidents and provosts identify as “Latino” in their biographies.

This range of time was determined through a process of approximately 20 semi-structured interviews with administrators at the campuses in this dataset.

Additional information

Notes on contributors

Amanda Rutherford

Amanda Rutherford is an Assistant Professor in the School of Public and Environmental Affairs at Indiana University. She earned her Ph.D. in Political Science from Texas A&M University, where she concentrated on public administration, public policy, and race and ethnic politics. Rutherford’s research interests include managerial values and decision-making, performance management, representative bureaucracy, higher education policy, and research methodology. Her work has been published in American Political Science Review, American Journal of Political Science, Public Administration Review, and Public Administration. Rutherford has also won various honors and awards, including the Junior Scholar Research Grant from the Paul A. Volcker Endowment for Public Service Research and Education.