Authors: Wisnu Untoro; Arifin Angriawan; Irwan Trinugroho; Reza Rahardian
Addresses: Faculty of Economics and Business, Universitas Sebelas Maret, Jl. Ir. Sutami 36 Surakarta, 57126, Indonesia ' College of Business, Purdue University Northwest, 169th Street, Hammond, IN 46323, USA ' Faculty of Economics and Business, Universitas Sebelas Maret, Jl. Ir. Sutami 36 Surakarta, 57126, Indonesia ' Faculty of Economics and Business, Universitas Sebelas Maret, Jl. Ir. Sutami 36 Surakarta, 57126, Indonesia
Abstract: Previous research results have shown the negative relationships between top executive tenure and strategic decisions consistently. This paper tests the relationship in a new setting. This paper examines top management team organisational tenure as a predictor of bank diversification and the moderating effect of prior performance on the relationship. We tested our hypotheses on a sample of data collected from 64 banks in Indonesia. Hierarchical regression results indicate that the average TMT organisational tenure negatively was associated with the degree of bank diversification. Furthermore, we found the positive moderating impact of prior performance on the relationship between of average TMT organisational tenure and bank diversification. These results are consistent with and support previous research conclusions. The results also show the importance of the recent call for a more interactionist model of the upper echelons research.
Keywords: prior performance; organisational tenure; bank diversification; interactionist model; upper echelons; top management team; banking industry; Indonesia.
Journal for Global Business Advancement, 2016 Vol.9 No.4, pp.412 - 426
Received: 04 May 2015
Accepted: 30 Nov 2015
Published online: 12 Oct 2016 *