The Leadership Quarterly 25 (2014) 943957

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The Leadership Quarterly

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CEOTMT exchange, TMT personality composition, and decision quality: The mediating role of TMT psychological empowerment

Hao-Chieh Lin a, , Nayel Rababah b,1

a Department of Business Management, National Sun Yat-sen University, Kaohsiung City 80424, Taiwan, ROC

b Institute of International Management, National Cheng Kung University, Tainan City 70101, Taiwan, ROC

a r t i c l e i n f o

Article history:

Received 18 October 2011

Received in revised form 1 June 2014 Accepted 18 June 2014

Available online 14 July 2014

Handling Editor: Shelly Dionne

Keywords:

Top management team CEOTMT exchange quality Psychological empowerment Decision qualityPersonality composition

a b s t r a c t

This research draws on the upper-echelons perspective to examine the effects of CEOtop man-agement team (TMT) exchange quality and TMT personality composition on decision quality through the mediation of TMT psychological empowerment. Using survey data from more than 700 executives in 210 firms in a Middle Eastern country and adopting a split-data approach, we find that CEOTMT exchange quality can advance TMT psychological empowerment. We also find that TMT neuroticism has a negative effect on TMT psychological empowerment, while TMT conscientiousness, extraversion, agreeableness, and openness have positive effects. More-over, TMT psychological empowerment plays a mediating role in linking CEOTMT exchange quality and TMT personality composition with decision quality. Our research contributes to the upper-echelons, leadermember exchange (LMX), and decision-making literature by drawing at-tention to the social dynamics between CEO and TMT members, as well as the psychological char-acteristics and psychological states of TMT members, and their implications for strategic decisions.

2014 Elsevier Inc. All rights reserved.

The upper-echelons perspective proposes that an organization is a reflection of its strategic leaders (Hambrick & Mason, 1984), and many studies have revealed the significant impact that top management team (TMT) characteristics have on a firm's strategic choices (see Carpenter, Geletkanycz, & Sanders, 2004 for a comprehensive review). However, prior research tends to treat TMT as a whole, and the interface between a CEO and his/her executive peers has received limited attention in the literature (Carmeli, Schaubroeck, & Tishler, 2011), even though the CEO holds a key role in shaping a TMT's socio-psychometric processes and various firm outcomes (Eisenhardt & Bourgeois, 1988). An examination of the CEOTMT interplay could more completely capture the dynam-ics among top executives (Stoker, Grutterink, & Kolk, 2012) and elucidate how a firm's decisions are determined by its dominant coalition (Cyert & March, 1963).

Equally, the existing literature mainly examines surface-level demographic compositions as proxies of TMTs' psychological char-acteristics, without devoting sufficient efforts to probe into their deep-level compositions, such as personality traits (Hambrick, 2007), despite the fact that a firm's strategic decisions can be predicted by both the surface- and deep-level attributes of its TMT (Bell, 2007). The investigation of TMT personality characteristics carried out in the current work also responds to the call for a more rigorous test that directly identifies TMTs' underlying traits and their social and cognitive implications (Hambrick, 2007).

Financial support from the National Science Council Taiwan (NSC99-2410-H-006-004-MY3) is acknowledged.

Corresponding author at: Department of Business Management, National Sun Yat-sen University, 70 Lien-Hai Road, Kaohsiung City 80424, Taiwan, ROC. Tel.: +886 7 5252000x4616.

E-mail addresses: linhjtw@mail.nsysu.edu.tw (H.-C. Lin), naelmr@yahoo.com (N. Rababah). 1 Tel.: +886 6 2369313x12.

http://dx.doi.org/10.1016/j.leaqua.2014.06.005 1048-9843/ 2014 Elsevier Inc. All rights reserved.

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Prior research also has little to say with regard to the mechanisms that can convert executive characteristics into constructive decision outcomes (Carmeli, Tishler, & Edmondson, 2012). Identifying the critical mediators through which CEOTMT interplay and TMT deep-level composition can generate quality decisions could help to achieve a deeper understanding of the decision-making process in a firm (Peterson, Smith, Martorana, & Owens, 2003).

To address the aforementioned research questions, this study examines how the CEOTMT interplay and TMT personality composi-tion affect decision quality through the mediation of TMT psychological empowerment, which reflects executive members' collective be-liefs in their autonomy and capability to perform meaningful work that can impact their organization (Chen, Kirkman, Kanfer, Allen, & Rosen, 2007: 332). TMT psychological empowerment has the shared unit properties and describes the motivational state of a TMT. An examination of psychological empowerment at the TMT level is important, as it is a widely-used concept in team leadership literature (Chen, Lam, & Zhong, 2007) and holds a key place in bridging team profiles and team performance (Seibert, Wang, & Courtright, 2011).

To examine the CEOTMT interplay, we employ the leadermember exchange (LMX) theory and explore the issue of CEOTMT exchange quality, which refers to the mean level of each TMT member's perception of the quality of his/her relationship with the CEO (Boies & Howell, 2006). In so doing, we identify CEOs from our definition of TMTs in this study and endeavor to investigate the dynamics between leaders and their followers at the upper-echelons level. CEOTMT exchange quality constitutes the configural unit properties and underscores the contribution of every dyadic relationship between a CEO and his/her executive peers to the overall exchange quality within a TMT (Kozlowski & Klein, 2000). We highlight CEOTMT exchange quality, as LMX has been found to be a key driver of employee empowerment at the dyadic level (Gmez & Rosen, 2001). At the team level, LMX also can increase team potency, a key dimension of psychological empowerment (Boies & Howell, 2006).

As with TMT personality composition, it refers to the mean level of a TMT with regard to a particular personality trait, and thus constitutes the configural unit properties. Because personalities emerge in the same way and are functionally equivalent across levels (Bell, 2007: 601) and show isomorphic behavioral routines and regularities at various levels (Hogan, 1991), we therefore apply the mean approach to conceptualize the TMT personality composition. Moreover, we apply the Five-Factor Model (FFM; i.e. Conscientiousness, Openness to Experience, Extraversion, Neuroticism, and Agreeableness) to assess personality traits, be-cause it has been shown to be both generalizable and stable (Costa & McCrae, 1992), as well as effective in predicting team outcomes (Barry & Stewart, 1997).

With regard to decision quality, it pertains to whether decisions are made based on valid assumptions and the best available in-formation, and whether the solutions that are generated fit the organization's strategies and contribute to its overall effectiveness (Carmeli & Schaubroeck, 2006). Decision quality captures the global unit property, which is relatively objective and refers directly to team-level decisions (Kozlowski & Klein, 2000). As compared with decision process concerns, such as comprehensiveness or agreement, decision quality is a more adjacent factor for predicting various firm-level outcomes (Amason, 1996; Carmeli & Schaubroeck, 2006).

Based on a large-scale sample collected from Jordan, our empirical findings are largely consistent with the expectations, which reveal the key role of psychological empowerment in bridging CEOTMT exchange quality and TMT personality composition with decision quality. This study thus makes several contributions to the strategic leadership literature. The investigation of TMT empower-ment presented in this work elucidates the psychological links between executive characteristics and strategic decisions, and also represents a critical first step in the literature of psychological empowerment (Seibert et al., 2011). The simultaneous examination of CEOTMT interplay and TMT composition also serves to support the cornerstone of the upper-echelons theory, since both the CEO and TMT are the information-processing centers of an organization (Eisenhardt & Bourgeois, 1988). Examining CEOTMT exchange quality can expand the theoretical implications of LMX theory, so that it encompasses the full range from lower- to top-echelon contexts as well (Liao, Liu, & Loi, 2010). Finally, by extending the study of executive dynamics to Jordanian companies, our study advances the generalizability of the upper-echelons theory and responds to a recent call for more research in the Arab Middle East (Zahra, 2011).

Theoretical background and hypotheses

TMT psychological empowerment

The idea of team empowerment has been conceptualized from two perspectives: structural and psychological. Structural empow-erment concerns the policies and practices of delegation and decentralization, while psychological empowerment is a constellation of psychological states, which results from team members' interactions and emerges from their collective or socially-constructed cognitions (Kirkman, Rosen, Tesluk, & Gibson, 2004).

Psychological empowerment can be conceptualized at either the individual or team level (Kirkman et al., 2004). Our study focuses on team, or specifically TMT, psychological empowerment, which is a multidimensional construct composed of (a) meaningfulness (i.e., intrinsic caring about tasks), (b) potency (i.e., perceived competence to perform tasks), (c) autonomy (i.e., perceived self-determination at work), and (d) impact (i.e., perceived contributions of their tasks to the firm) (Kirkman & Rosen, 1999). The four dimensions of psychological empowerment are important in the TMT context because TMT members' positive assessments of their roles, competences, and tasks are crucial for making strategic decisions, which often involve significant uncertainties and thus are like-ly to elevate dysfunctional conflicts (Chen, Lin, & Michel, 2010), making the synchronization of psychological and cognitive resources necessary (Hambrick, 2007).

Team psychological empowerment characterizes the dynamic properties of a team that vary as a function of team context, inputs, and outputs (Marks, Mathieu, & Zaccaro, 2001). A meta-analytic review has revealed the effects of team leadership and team compo-sition on team empowerment, which in turn affects various outcomes (Seibert et al., 2011). As a result, we expect that CEOTMT exchange quality and TMT characteristics will impact TMT psychological empowerment, because both the CEO and TMT play

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significant roles in shaping TMT dynamics (Simsek, Veiga, Lubatkin, & Dino, 2005). Moreover, LMX has been shown to be a key driver of team interactions (Chen, Lam, et al., 2007), while personality traits can function as the basis of social identification and selective interpretation (Pitcher & Smith, 2001), which can thus foster shared perceptions of empowerment in a team.

CEOTMT exchange quality and its influence on TMT psychological empowerment

Although the CEO has a disproportionate influence on TMT processes and outputs, issues related with CEOTMT interplay remain underexplored in the literature (Carmeli et al., 2011, 2012). To address this gap, our study draws on LMX theory, which is based on the differential relationships between a leader and his/her followers, and was originally conceptualized at the dyadic level, although LMX exists at multiple levels (Dansereau & Yammarino, 1998; Graen & Uhl-Bien, 1995). CEOTMT exchange quality is a team-level con-struct in this study and represents the average quality of reciprocity and the mean level of emotional and social exchange between a CEO and each of his/her executive peers (Ford & Seers, 2006).

An elevated level of CEOTMT exchange quality enhances collaboration and coordination (Simsek et al., 2005) and expands team information-processing capacity (Hambrick, 1994), leading to greater team potency (Kirkman et al., 2004). High-quality CEOTMT exchanges can increase value congruence (Ford & Seers, 2006) and promote collective efficacy (Zhao & Seibert, 2006), which are ben-eficial to the pursuit of an organization's goals. High exchange quality between a CEO and his/her executive peers also fosters mutual understanding and shared experiences, while helping to avoid hostile conflicts, thus enhancing members' perceived discretion in decision-making (Kirkman et al., 2004). CEOTMT exchange quality also stimulates non-routine thinking and cultivates a greater breadth and depth of perspectives (Sosik, 1997), which can improve members' perception of their impact on the organization.

Overall, we expect that high-quality CEOTMT exchanges will lead to the development of entrenched individualized relationships within a TMT and foster a climate of mutual trust (cf., Dooley & Frxyell, 1999), thus advancing the collective belief in team empow-erment. Based on this idea, the following hypothesis is presented.

Hypothesis 1. CEOTMT exchange quality is positively related to TMT psychological empowerment.

TMT personality composition and its influence on psychological empowerment

A number of surface-level TMT characteristics, such as tenure and educational background, have been applied to predict various TMT and firm outcomes. Nonetheless, an examination of such demographic details leaves us at a loss as to the real psychological and social processes that are driving executive behavior (Hambrick, 2007: 335). To address this concern, the current study examines TMT personality composition in order to directly probe the underlying psychological attributes among TMT members.

Individual personality factors are innate traits that are inherently intrapersonal. Conversely, TMT personality compositions are interpersonal phenomena, which involve complex patterns of interactions as the team members' individual attributes combine to a team level (Bell, 2007: 599). As a result, the individual executive's personality scores can be aggregated to reveal a TMT's personality attributes, because every TMT member can contribute their own professional skills to the team, while working together to expand the group's cognitive bases (LePine, 2003).

We examine TMT personality compositions based on the FFM, which describes personality based on five dispositional traits: conscientiousness (the degree of self-control, accountability, and persistence), extraversion (the degree of optimism and positive affectivity), openness to experience (the degree of the tendency toward creativity, cognitive complexity, and originality), agreeableness (the degree of pro-social tendency), and neuroticism (the degree of emotional instability and negative affectivity) (Costa & McCrae, 1992). In considering the influence of TMT personality compositions on psychological empowerment, we take the position that an individual member's personality traits, as revealed by the FFM, will be reflected in the aggregated profile of a TMT.

Conscientiousness

TMT members with high levels of conscientiousness are achievement-oriented, dependable, and self-disciplined (Neuman, Wagner, & Christiansen, 1999). A team with a high mean level of conscientiousness tends to be flexible and proactive (LePine, 2003) and sup-portive of challenging the status quo (Stewart, Fulmer, & Barrick, 2005). Conscientious TMTs are thus likely to exhibit increased task cohesion and team morale with decreased social loafing, and this can advance members' shared beliefs in their abilities and discretion with regard to completing meaningful tasks for their firms (Barry & Stewart, 1997). The trait of conscientiousness has been found to be the most consistent and critical predictor of team psychological states and processes (Barrick, Stewart, Neubert, & Mount, 1998; Moynihan & Peterson, 2001) and can also promote task-specific collective efficacy (Marks et al., 2001).

A TMT which is comprised of conscientious executives will exhibit high motivation and greater keenness to accept delegation and responsibility (cf., Conger & Kanungo, 1988). An elevated level of TMT conscientiousness also promotes resource integration (Bell, 2007), which can advance team empowerment. Consequently, the following hypothesis is proposed.

Hypothesis 2a. TMT mean level of conscientiousness is positively related to psychological empowerment.

Extraversion

TMTs with a high level of extraversion feel more competent in themselves, and thus have a more positive assessment of the authority they receive (LePine, 2003). Extraverted members also like to socialize and work with others, which helps to advance

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team efficacy (Kirkman & Rosen, 1999). TMT extraversion can thus foster the exchange of ideas and flow of information among mem-bers, which can increase members' psychological strength when facing challenging tasks (Hogan, 1991). Members in extraverted teams have more trust in each other, which enhances their shared beliefs that they will be able to access the resources they need (Barry & Stewart, 1997). Indeed, team extraversion can foster a sense of social identity and shared responsibility (Bell, 2007), which can make members feel that they have greater freedom in decision-making.

Moreover, extraverted members are more willing to discuss their ideas with others and seek suggestions in the decision-making pro-cess, which can expand and extend team cognitive resources (Porter et al., 2003). Within a TMT, more outward-oriented thinking can promote a positive interpretation of the tasks that members have been asked to achieve. Consequently, the next hypothesis is proposed.

Hypothesis 2b. TMT mean level of extraversion is positively related to psychological empowerment.

Openness to experience

The openness to experience trait reflects a person's awareness and acceptance of individual differences (McCrae & Costa, 1997). TMTs with a high degree of openness seek novel ideas and embrace new experiences (cf., Zhao & Seibert, 2006), which can then promote members' acceptance of empowerment. These team members will also be more flexible, adaptable and creative, and thus be able to engage better in the process of empowerment (cf., Carmeli et al., 2011). A high level of TMT openness to experience is likely to manifest itself with greater originality, imagination, and a preference for cognitive complexity, which can promote a TMT's perceived competence and also have positive effects on the firm (Bass, 1999).

Because team openness can help put ideas into action (Saavedra, Earley, & Van Dyne, 1993) and advance interpersonal interaction (Barry & Stewart, 1997), and thus help individuals to perform well in novel and complex situations (Marks et al., 2001), we expect that TMTs with higher scores on the openness trait will be more likely to feel empowered with regard to complicated yet high-impact tasks (LePine, 2003). Based on this, the following hypothesis is proposed.

Hypothesis 2c. TMT mean level of openness to experience is positively related to psychological empowerment.

Agreeableness

Agreeable persons show concern for others and are more willing to engage in collaborative, appealing, and helping behaviors (Costa & McCrae, 1992). Team members with a high level of agreeableness personality trait are sympathetic, considerate, trusting, and soft-minded (Barrick et al., 1998), which can advance team dynamics (Neuman et al., 1999) and collective citizenship behavior (Rogelberg et al., 2003), and thus consolidate members' psychological states of empowerment. A high level of TMT agreeableness is associated with better social functioning and a greater willingness to work with others (Neuman & Wright, 1999), which can increase team competence and motivation. A TMT with a high score on agreeableness is also likely to have a shared vision which reduces pro-cess conflict, thus increasing the value of such teams to their firms (Seibert et al., 2011).

Moreover, TMTs with high agreeableness are more adaptable to team power dynamics (Peterson et al., 2003), which can promote members' positive beliefs in team empowerment (cf., Kirkman & Rosen, 1999). Indeed, team agreeableness has been found to be posi-tively related with various desirable team outcomes (Moynihan & Peterson, 2001). Based on these arguments, the following hypothesis is proposed.

Hypothesis 2d. TMT mean level of agreeableness is positively related to psychological empowerment.

Neuroticism

Neuroticism is associated with emotional instability, hostility, negativity and a lack of positive psychological adaptation (Judge & Ilies, 2002). TMT members with high neuroticism can neither control their own emotions nor deal with their depressions effectively (Costa & McCrae, 1992), and this can be detrimental to their assessment of the tasks they are given. Neuroticism makes people more likely to encounter conflicts with others, which can harm their social connections. TMTs with neurotic members may also develop high-pressure climate characterized by negative stereotypes, self-serving biases, and emotional conflicts (Pelled, Eisenhardt, & Xin, 1999). Under such circumstances, members are less likely to have positive interpretation of their tasks (Watson & Tellegen, 1985). Team integration and autonomy will also be disrupted by temperamental and impulsive members (Neuman et al., 1999), which in turn reduces team efficacy (Judge & Ilies, 2002). The resulting psychological pressure means that such TMTs are less likely to think or act in a constructive way (Watson & Tellegen, 1985).

Conversely, a TMT with low neuroticism will exhibit greater emotional stability, which might create a relaxed atmosphere that promotes cooperation and thus might ultimately engage in less disruptive behavior (Bell, 2007: 597), and thus increase members' psychological state of empowerment (cf., Chen, Kirkman, et al., 2007). Consequently, the following hypothesis is proposed.

Hypothesis 2e. TMT mean level of neuroticism is negatively related to psychological empowerment.

Decision quality as an outcome of TMT psychological empowerment

To propose the effect of TMT psychological empowerment on decision quality, we employ the concept of behavioral integration as it affects the basic relevance of the TMT as a meaningful unit of analysis (Hambrick, 2007: 336). Research has shown the effects of team emergent states on behavioral integration (Chiu, Lin, & Chien, 2009), which can then advance decision quality (Carmeli &

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Schaubroeck, 2006). Team empowerment also can shape team processes, and thus affect team outcomes (Mathieu, Gilson, & Ruddy, 2006). As a result, behavioral integration offers an avenue for linking TMT empowerment with decision quality.

Behavioral integration is comprised of three interrelated team processes, including collaborative behavior, information exchange, and joint decision-making (Simsek et al., 2005). When TMT members are confident and free to make decisions that are meaningful and have a high-impact on their firm, they will devote more efforts in conducting constructive debates while handling adversarial conflicts, which can promote collaborative behavior and thus advance the quality of decision-making (Hyatt & Ruddy, 1997). The greater the degree of perceived empowerment, the more TMT members feel they need to account for a firm's strategic decisions (Kirkman & Rosen, 1999). This feeling of accountability can boost information exchanges, idea inquiries, and collective brainstorming (Cho & Hambrick, 2006). Empowered TMTs can also further joint decision-making because they can freely align their collective efforts with work demands to meet their performance goals (Mathieu et al., 2006: 101). As a consequence, when TMT members are empowered to assume responsibility, they will commit themselves to the social interactions and decision-making process (Kirkman & Rosen, 1999; Zhang & Bartol, 2010), thus leading to more effective decisions (Carmeli & Schaubroeck, 2006).

To sum up, TMTs can produce more novel and creative solutions if they are left to their own devices (Redding, 2000: 9). Conversely, TMT members will be less motivated to be involved in decision-making and show less creativity when they are involved (Pitcher & Smith, 2001), if they feel less empowered (Mathieu et al., 2006).

Hypothesis 3. TMT psychological empowerment is positively related to decision quality.

TMT psychological empowerment as a mediator

The upper-echelons perspective states that the relationships between executive profiles and firm outcomes are punctuated by var-ious intervening mechanisms (Hambrick, 2007). The InputMediatorOutput (IMO) model also underlines the role of team psycholog-ical states in linking team composition and contextual (e.g., leadership) inputs with team outcomes (Mathieu, Maynard, Rapp, & Gilson, 2008). However, to date the TMT literature has paid little, if any, attention to how TMT psychological states mediate the effects of CEOTMT interplay and TMT deep-level characteristics on decision-making outcomes (Amason, 1996; Peterson et al., 2003).

Following the socialization literature (Wanberg & Kammeyer-Mueller, 2000), we view decision quality as an outcome of leader-ship and team characteristics, as mediated by the dynamics among team members. A leader can facilitate team socialization and ad-vance team decision quality by providing the necessary cognitive and emotional resources (Hackman, 1990). Greater CEOTMT exchange quality can increase executives' shared understandings of their authority, competence, and significance of their tasks, while reducing the psychological risks that are associated with information-processing and resource allocation, which can motivate them to engage in innovative projects and learning behaviors, and thus advance decision outcomes (Dulebohn, Bommer, Liden, Brouer, & Ferris, 2012). An elevated level of CEOTMT exchange quality is characterized by greater exchanges of information and the provision of more supporting resources, which can increase team efficacy and shape executives' positive perceptions and experi-ences, and thus enhance team outcomes (Seibert et al., 2011). In this way, team psychological empowerment can translate team leadership into various team outcomes (Mathieu et al., 2006; Seibert et al., 2011).

Prior research has argued that the increased sense of efficacy, meaningfulness, and significance can largely account for the impact of LMX on subordinates' effective work outcomes (Walumbwa, Cropanzano, & Goldman, 2011). In this vein, and based on our prop-ositions on the relationship between CEOTMT exchange quality and psychological empowerment ( H1), and between psychological empowerment and decision quality ( H3), the following hypothesis is proposed.

Hypothesis 4. TMT psychological empowerment partially mediates the relationship between CEOTMT exchange quality and decision quality.

TMT personality traits are dispositional profiles of thinking, feeling, and acting that may affect team outcomes through the inter-actions that team members have with one another (Bell, 2007). Personality attributes can serve as a lens which shapes TMT members' subjective perceptions, fields of vision, and interpretations of external cues, which then form the basis of their strategic decisions (Nadkarni & Herrmann, 2010). Personality compositions also influence members' judgment of task meanings and perceptions of empowerment, which affect decision quality (Thomas & Velthouse, 1990). Moreover, TMT personalities affect perceived managerial discretion, which plays a key role in determining team dynamics and subsequent decision outcomes (Peterson et al., 2003). At the individual level, psychological empowerment has been shown to be a critical mediator in the relationship between personality traits and team outcomes (Seibert et al., 2011). As a result, we expect that TMT psychological empowerment also partially mediates the relationships among the personality composition variables and decision quality.

Hypothesis 5. TMT psychological empowerment partially mediates the relationships between TMT personality composition variables and decision quality.

Methods

Sample and data collection

The analysis carried out in this study is at the TMT level. A TMT is defined as a group of executives who work together to decide the strategic directions and actions of the firm (Hambrick & Mason, 1984). Our definition of a TMT does not include the CEO, as we focus

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on non-CEO TMT members' relationships with the CEOs and their collective beliefs as to the degree to which they have the compe-tence and discretion needed to accomplish important tasks for their company (Kirkman et al., 2004).

Our research sample was drawn from the top 1000 firms (by revenue) that we can identify in Jordan. Jordan is an important Middle Eastern country that connects western nations and the Arab world. As compared with other Arab countries, Jordan has a fairly dynamic, market-oriented economy; its economic freedom was ranked 38th out of 183 economies around the globe and 4th out of 17 countries in the Middle East/North Africa region. Jordan also has the most efficient legal system in the region, which has helped it to attract considerable foreign investment, although it still has a rather challenging business environment (International Finance Corporation (The World Bank Group), 2011). In light of the unique power dynamics in Jordanian culture (Hofstede & Hofstede, 2005), examining TMT empowerment and its antecedents and decision outcomes is especially valuable, because it can offer comple-mentary insights to previous studies which typically focused on western contexts (Hambrick, 2007).

An invitation letter was first sent to CEOs or general managers of the focal 1000 firms. A telephone call was made after this to explain the purposes of the survey and identify a contact who would be able to provide us with basic TMT information and help dis-tribute the survey to TMT members. We mailed out a total of 4120 anonymous questionnaires. To increase sample representativeness, we included only those firms whose executive response rate was more than 50% in our final sample. As a consequence, the final usable sample includes 716 executives in 210 firms (a 21.0% valid rate at the firm level, and a 17.38% valid rate at the individual level). These rates are higher than those found in prior TMT studies (Hambrick, 1995).

The studied firms have average assets of US$35.7 million (s.d. = 50.34), an average of 303 employees (s.d. = 413.38), and an average age of 18.8 years (s.d. = 12.94). About 49% are in the service sector, 26.2% in manufacturing, and 24.8% in the banking and financial sector. Most of the studied firms (83.3%) are privately owned. The average TMT members' age and tenure are 45.30 (s.d. = 6.06) and 19.22 (s.d. = 9.23) years, respectively. Among the respondents, 84.9% are male, 95.9% are married, and 96.9% hold a college degree or above. Since the average TMT size is 5.34 (s.d. = 2.20) and the average number of team respondents is 3.41 (s.d. = 1.30), we checked for potential bias by comparing responding and non-responding TMT members and found insignificant differences in age (2 = .74, df = 1, p = .39) and tenure (2 = .39, df = 1, p = .53) between the two groups (Chen et al., 2010). We also checked for a possible non-response bias in our sample by comparing the differences between early and late respondents in their ratings of the key variables used in this study. The t-test results were all insignificant (p N .05).

Measures

Survey questions were derived from the literature and translated from English into Arabic by one scholar competent in both languages. To avoid cultural bias and ensure validity, the Arabic version was translated back into English by a professional translator. We also involved two additional strategy scholars to evaluate the definitions of the focal variables and their respective items, thus increasing the accuracy of our measurements.

CEOTMT exchange quality

A five-item, seven-point Likert-type scale (1 = strongly disagree, 7 = strongly agree) was adapted from Linden, Wayne, and Stilwell's (1993) LMX measure ( = .84). Respondents were asked to indicate the extent to which their CEO understands my prob-lems and needs, recognizes my potential, has enough confidence in me that he/she would defend and justify my decisions if I were not present to do so, and has a good working relationship with me, as well as to what extent I can count on my CEO to bail me out even at his or her own expense, when I really need it. We applied an additive approach to calculate the mean scores of individual responses to represent the value of team-level CEOTMT exchange quality, notwithstanding the divergence among individual mem-bers (Chan, 1998). Confirmatory Factor Analysis (CFA) was conducted to evaluate construct validity, and the chi-square test and four additional fit indices, including comparative fit index (CFI), non-normed fit index (NNFI), root-mean-square error of approximation (RMSEA), and standardized root-mean-square residual (SRMR), were applied to assess model fit (Hu & Bentler, 1999). The CFA results showed that the model fitted the data well (2 = 5.21, df = 5; NNFI = .99, CFI = .99, SRMR = .04, RMSEA = .01). The factor loadings were all significant (p b .001), AVE = .61 and CR = .87, indicating good convergent validity. We did not assess inter-rater reliability, because LMX is a dyadic phenomenon and is assumed to differ to some extent among members.

TMT personality composition

The seven-point Likert-type (1 = strongly disagree; 7 = strongly agree) International Personality Item Pool (IPIP), as developed by Goldberg (1999), was utilized to assess TMT Big-Five personality attributes. This scale has been widely used in the literature (Liao & Chuang, 2004) and is comprised of 50 items designed to reflect five dimensions of personality characteristics. Each dimension consists of ten items which represent positive and negative aspects of a specific personality trait. Sample items include: I am always prepared (conscientiousness); I am the life of the party (extraversion); I have a rich vocabulary (openness to experience); I am interested in people (agreeableness); and I get stressed out easily (neuroticism). The Cronbach's values for conscientiousness, extraversion, openness to experience, agreeableness and neuroticism were .94, .94, .92, .82, and .83, respectively. CFA was performed on each of the five personality traits, and the model fit indices were all acceptable (available from the authors). Factor loadings were all significant (p b .001), and the average variance extracted (AVE) and composite reliability (CR) were all above the thresholds, indicating acceptable convergent validity.

To measure the TMT personality composition, we applied an additive approach to calculate the mean score for each of the five personality traits. A TMT with a high mean score on a certain trait implies that the whole team has a high propensity toward it

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(LePine, 2003). Because the personalities of individuals are based on innate traits, which are assumed not to converge among members of a TMT, we thus do not assess the inter-rater reliability (Kozlowski & Klein, 2000).

TMT psychological empowerment

Kirkman et al.'s (2004) 12-item, seven-point Likert-type (1 = strongly disagree; 7 = strongly agree) scale was applied to measure TMT psychological empowerment. A reference-shift consensus model (Chan, 1998) was used to measure the 12 items, which reflect four dimensions of team psychological empowerment: meaning ( = .91), impact ( = .85), potency/self-efficacy ( = .89), and autonomy ( = .86). The Cronbach's value for the overall scale was .95. Sample items include: Our management team has confi-dence in itself (potency); Our management team believes that its tasks are significant (meaningfulness); Our management team can select different ways to do the team's work (autonomy), and Our management team performs tasks that matter significantly to the company (impact). The CFA results showed acceptable model fit indices (2 = 3.25, df = 2; NNFI = .98, CFI = .99, SRMR = .02, RMSEA = .05). The factor loadings were all significant (p b .001), and AVE and CR were .55 and .79, respectively, indicating good convergent validity. We assessed inter-rater reliability by calculating ICC(1), ICC(2), rwg, and ANOVA, because team psychological empowerment involves members' shared perceptions (Bliese, 2000; Kirkman et al., 2004). The results were all higher than the acceptable thresholds (Mean rwg = .95, ICC(1) = .61, ICC(2) = .84, and ANOVA F = 6.48, p b .01).

Decision quality

Decision quality captures the rigor of the assumptions embedded in strategic decisions (Fredrickson, 1984) and takes into account the effectiveness of the solutions generated (Dooley & Frxyell, 1999). The four-item, seven-point Likert-type scale was adapted from Carmeli and Schaubroeck (2006) ( = .83). Respondents were asked to indicate the extent to which the strategic decisions made over past three years in relation to the following four issues were realistic or unrealistic: the attractiveness of the company's new products/ services, the estimated price or price change customers would pay, the resources or capabilities required to successfully implement strategic plans, and the expected financial performance (i.e., revenue and profitability). The CFA results showed that the values of the fit indices were largely acceptable (2 = 10.79, df = 2; NNFI = .97, CFI = .97, SRMR = .03, RMSEA = .14). Although the RMSEA value is larger than the acceptable threshold of .08 (Hu & Bentler, 1999), it is comparable with those found in seminal studies (e.g., Zacharatos, Barling, & Iverson, 2005). Moreover, the factor loadings were all significant (p b .001), with an AVE and CR of .56 and .83, respectively, indicating good convergent validity. Checks for inter-rater reliability also revealed acceptable results (Mean rwg = .92, ICC(1) = .54, ICC(2) = .80, and ANOVA F = 5.03, p b .01).

Control variables

To decrease the likelihood of spurious results, a few control variables were added to the model. We controlled key TMT informa-tion, CEO-related variables, and firm characteristics on both TMT psychological empowerment and decision quality. For TMT informa-tion, we first controlled TMT size, TMT members' average age, and TMT educational heterogeneity (in terms of the highest degree obtained) (Carpenter et al., 2004). TMT size and age were measured as the number of non-CEO executives and the logarithm of the average age of non-CEO TMT members, respectively. TMT educational heterogeneity was assessed using a variation of the HerfindahlHirschman index (Chen et al., 2010). We then controlled for TMT FFM personality heterogeneities, as measured with the coefficients of variation (Neuman et al., 1999).

For the CEO-related variables, we controlled CEO tenure and CEOTMT exchange differentiation, as measured with the coefficient of variation (Boies & Howell, 2006; Le Blanc & Gonzlez-Rom, 2012), and CEO decentralization of responsibilities (Ling, Simsek, Lubatkin, & Veiga, 2008), as assessed by a three-item measure adapted from Sutcliffe (1994) (AVE = .88, CR = .95; = .88; Mean rwg = .80, ICC(1) = .55, ICC(2) = .80, and ANOVA F = 5.12, p b .01).

For organizational characteristics, we controlled firm size, firm age, and firm slack (cf., Kirkman et al., 2004). Firm size and age were measured with the logarithm of the number of full-time employees (Miller & Droge, 1986) and the logarithm of founding years (Chen et al., 2010), respectively. Organizational slack was measured with a three-item scale developed by Tan and Peng (2003) (AVE = .57, CR = .80; = .80; Mean rwg = .84, ICC(1) = .62, ICC(2) = .85, and ANOVA F = 6.68, p b .01).

Finally, we also controlled for the effect of the two environmental characteristics of dynamism and munificence on decision quality (Chen et al., 2010). Environmental dynamism (AVE = .82, CR = .93; = .92; Mean rwg = .84, ICC(1) = .67, ICC(2) = .87, and ANOVA F = 8.01, p b .01) and munificence (AVE = .83, CR = .93; = .93; Mean rwg = .85, ICC(1) = .70, ICC(2) = .89, and ANOVA F = 9.21, p b .01) were each measured with a three-item scale developed by Miller and Friesen (1983).

Assessing common method variance (CMV)

Because all of the items measured in this study were obtained from the same raters, we took several actions to detect and mitigate the possible influence of common method variance (Podsakoff, Mackenzie, Lee, & Podsakoff, 2003). Before distribution, we first varied the scale anchors in the questionnaire and performed a series of validation processes. Second, we collected the measured data from multiple executives from each firm and examined the inter-rater reliabilities. Third, we controlled for a few potentially influential factors in the examined model.

Further, we conducted Harman's one-factor test by carrying out a principal components factor analysis on the survey items. Thir-teen factors were extracted, which accounted for 80.78% of the total variances. The first factor explained only 17.22% of the variances, indicating that no one general factor in the unrotated factor structure emerged to account for most of the variances (Schriesheim, 1979).

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Finally, we performed CFA and compared our theoretical model with a model loading all the measured items onto a common-method factor, and with the other model loading the items onto their respective latent variables, as well as onto an additional method factor (Podsakoff et al., 2003). The results showed that our model produced better fits than the two common-method models (p b .05).

Nonetheless, prior studies have shown that the split-data approach, in which the ratings for adjacent variables were from different sources within a TMT, can largely mitigate the effect of CMV on research findings (Podsakoff et al., 2003). As the values of our inter-rater reliability tests were all acceptable, randomly selecting any of the individual executive's responses in the same TMT as the values of specific constructs could be fairly representative. Therefore, we randomly assigned individual responses as the values of the two main constructs (i.e., psychological empowerment and decision quality) and the four survey-based control variables (namely, decentralization, slack, dynamism, and munificence), and adopted the split-data approach for later statistical analyses.2

Results

A two-step structural equation modeling (SEM) approach (Anderson & Gerbing, 1988) implemented with AMOS 20.0 was per-formed to evaluate the models. CFA was carried out to verify the distinctiveness of each research variable (as presented above) and the full measurement model. Nested modes were then applied to assess various structural models, and thereby produced the final model.

Phase I: full measurement model and validity checks

CFA was first applied to test the convergent and discriminant validities of the eight main latent constructs. The results demonstrat-ed that the baseline model fit the data well (2 = 156.86, df = 112, p b 0.05; NNFI = 0.96, CFI = 0.96, SRMR = 0.05, RMSEA = 0.04). Moreover, the factor loadings of the indicators on their respective factors were all significant (p b .001, all t's N 6.79), and the construct reliabilities (CR) and average variances extracted (AVE) were all above the recommended levels. We then assessed additional constrained models in which two variables were sequentially combined into a single factor and compared these models with the baseline one. These constrained models had significantly greater chi-square values than the baseline model (all 2 N 17.51,df = 1, p b .001), thus confirming the convergent and discriminant validities among the major constructs.

We further evaluated the full measurement model by incorporating control variables into it. With regard to the TMT demographic information, firm age, and firm size, the residuals and lambda coefficients were fixed at zero and one, respectively. The CFA results showed that the model fit the data well (2 = 946.51, df = 729; NNFI = .92, CFI = .91, SRMR = .04, RMSEA = .04), lending support to the psychometric properties of the full measurement model. Convergent validity among constructs was confirmed, because each indicator had a statistically and substantively significant factor loading on its respective construct (p b .001, all t's N 4.42), while the CR and AVE of the constructs were all above the recommended levels. Discriminant validity was confirmed by two criteria. First, the bivariate correlations between any one pair of variables were all below the recommended level of .65 (Simsek et al., 2005) (see Table 1), while the confidence intervals (two standard errors) around the correlation estimates between any two constructs did not include 1.0 (Anderson & Gerbing, 1988).

Table 1 presents the means, standard deviations and intercorrelations for the variables examined in this study. TMT psychological empowerment was found to be significantly correlated with decision quality, CEOTMT exchange quality, and some of the TMT personality traits (e.g., agreeableness) (p b .01), presenting preliminary evidence for further analyses.

Phase II: nested structural models and hypotheses testing

Nested-mode, sequential chi-square difference tests were applied to evaluate the structural models and test the hypotheses. This process involved comparing the chi-square differences among the nested models, in which the relationships between constructs were sequentially added to the original model. Table 2 presents the results for the fit indices of the nested models. The significant difference (2 = 2463.80, df = 292, p b .001) between the hypothesized model (Model 2) and null structural model (Model 1) provided the basis for assessing various nested models. To determine whether CEOTMT exchange quality exerted a direct effect on decision quality (Carmeli et al., 2011), we added an additional path to the hypothesized model. The chi-square difference between Model 3 and Model 2 is insignificant (2 = 1.41, df = 1, p N .05). We also evaluated the direct effects of the five personality composition variables on decision quality (cf., Peterson et al., 2003). The chi-square differences demonstrated that Model 4 significantly improved the hypothesized model (2 = 33.47, df = 5, p b .001), and thus this was used as the final model (2 = 959.17, df = 738; NNFI = .92, CFI = .91, SRMR = .05, RMSEA = .04).

Fig. 1 presents the completely standardized path estimates for the relationships examined in this work. Consistent with expecta-tions, CEOTMT exchange quality was positively related to psychological empowerment ( = .17, p b .001), supporting H1. TMT conscientiousness ( = .30), extraversion ( = .16), openness to experiences ( = .41), and agreeableness ( = .22) were all positively related to psychological empowerment, while neuroticism ( = .28) was negatively related to it (all p's b .05), supporting

2 We checked the robustness of our findings by incorporating the personality information of 56 CEOs that we could obtain into the calculation of TMT personality composition and redo the analyses. Research findings between including versus excluding CEO personalities are consistent, supporting the validity of our theoretically-derived model.

Table 1

Means, standard deviations, and correlations.

VariablesMSD1234567891011121314151617181920212223

1.TMT extraversion4.401.43

2.TMT agreeableness4.381.31.04

3.TMT neuroticism2.71.89.05.04

4. TMT conscientiousness4.511.34.07.19.16

5.TMT openness3.411.23.08.30.26.03

6.CEOTMT exchange quality4.34.59.02.03.01.03.04

7. Psychological empowerment2.73.89.14.25.14.22.45.26

8.Decision quality2.991.29.04.19.04.18.57.13.59

9. Environmental munificence4.86.85.11.18.28.19.10.07.28.19

10.Environmental dynamism5.74.79.06.02.06.20.05.06.01.12.00

11.Firm slack5.171.05.07.11.35.14.06.01.15.06.03.03

12.CEO decentralization4.50.86.07.00.02.05.13.30.30.22.18.08.00

13.CEO tenure26.808.42.01.09.11.12.06.01.09.07.13.12.02.11

14.TMT size5.342.20.05.16.15.03.26 .14.20.11.02.09.08.11.15

15.TMT age (log)1.31.33.02.03.01.07.07.08.06.10.05.04.08.02.00.01

16.Firm size (log)2.42.49.02.03.05.09.15 .02.09.13.04.01.01.03.13.27.09

17.Firm age (log)1.19.56.02.01.04.13.01.00.02.16.07.03.05.01.02.16.06.09

18.CEOTMT differentiation.15.11.12.20.08.04.19 .07.02.04.18.07.06.06.03.26.02.02.10

19.TMT educational H.52.30.01.05.02.10.03.01.01.00.03.01.02.08.03.10.02.15.18.11

20.TMT extraversion H.15.16.24.00.02.05.02.02.03.06.06.03.01.01.11.22.03.09.02 .01 .07

21. TMT agreeableness H.14.15.10.28.10.12.11.02.04.05.05.04.18.00.05.34.09.03.08.05.06.10

22.TMT neuroticism H.21.20.02.13.24.00.09.00.04.03.03.06.02.03.13.22.03.04.06.10.03 .00.11

23. TMT conscientiousness H.12.14.06.03.12.23.01.00.01.03.06.04.10.03.07.24.00.11.10.03.08.14 .07.02

24.TMT openness H.17.18.06.07.14.02.24 .07.13.20.01.01.03.01.03.27.02.01.15.16 .05.08.23.10.56

Note: N = 210; H = heterogeneity. The results are based on the AMOS analyses.

p b .01. p b .05.

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951

952H.-C. Lin, N. Rababah / The Leadership Quarterly 25 (2014) 943957

Table 2

Comparisons of nested structural models.

Models2df2dfNNFICFISRMRRMSEA

1.Null structural model3456.441035

2.Hypothesized model992.647432463.80292.91.90.06.04

3.CEOTMT exchange quality decision quality991.23742(3 vs. 2) 1.411.91.90.06.04

4. TMT personality composition decision quality959.17738(4 vs. 2) 33.475.92.91.05.04

Note: Model 4 is the final model. p b .001.

H2aH2e. Moreover, psychological empowerment was positively related to decision quality, a finding that supported H3 ( = .35, p b .001).

Finally, we performed a bias-corrected bootstrap analysis to calculate the estimates and confidence intervals for the mediated ef-fects (MacKinnon, Lockwood, & Williams, 2004), as this can improve the power when conducting mediation tests. The results showed that the indirect effects of CEOTMT exchange quality, conscientiousness, extraversion, openness, agreeableness, and neuroticism on decision quality were .23, .08, .07, .13, .09, and .08, respectively. Moreover, the 95% confidence intervals of the paths from CEOTMT exchange quality, conscientiousness, extraversion, openness, agreeableness, and neuroticism, to psychological empowerment and then decision quality were (.038 ~ .939), (.020 ~ .201), (.010 ~ .098), (.037 ~ .267), (.013 ~ .165), and (.297 ~ .025), respectively; none of which included zero. As a result, H4 and H5 were supported.

Discussion

This study applies the upper-echelons perspective to examine the relationships among CEOTMT exchange quality, TMT person-ality composition, psychological empowerment, and decision quality. The results support the theoretically derived model and key hypothesized relationships. Both CEOTMT interplay and TMT deep-level characteristics indeed affect executive members' shared perceptions of being empowered. Specifically, TMTs that are characterized by higher CEOTMT exchange quality and have higher levels of openness, agreeableness, conscientiousness, and extraversion, as well as a lower level of neuroticism, will produce a higher level of psychological empowerment, which in turn can bring about a higher level of decision quality. An enabling psychological climate is thus important for a TMT to develop high quality decisions (cf., Baum & Wally, 2003).

The study contributes to the TMT literature by examining CEOTMT exchange quality, and thus broadens the scope of upper-ech-elons theory, which thus far has largely focused on the overall TMT, while paying insufficient attention to the CEOTMT interface and its social and cognitive implications. The examination of a team process model that was carried out in this work, in which CEOTMT interplay and TMT personality characteristics together shape TMT psychological states, and thus decision outcomes, also delineates the mechanism through which two executive forces determine strategic choices (Peterson et al., 2003). Similarly, examining the role of team empowerment in bridging the relationships that CEOTMT exchange quality and TMT personality attributes have with decision quality reveals the comprehensive influence that a TMT can have, as the internal dynamics, dispositional tendencies, and psychological states of such groups all play significant roles in shaping a firm's strategic decisions (Dooley & Frxyell, 1999).

In addition, the inquiry into TMT personality characteristics presented in this study expands the scope of TMT research beyond its current demographic domain (Pitcher & Smith, 2001) and provides the literature with a complementary perspective (Hambrick, 2007). Finally, this study represents a critical first step in examining firms in a variety of industries in a Middle Eastern country, which can advance the generalizability of upper-echelons theory (Hambrick, 2007). In considering the distinctive power dynamics at play in the Arab Middle-East, our study serves as an important milestone for future TMT research in this region (Zahra, 2011).

This study also contributes to the LMX literature in several ways. The effects of CEO characteristics on firm-level outcomes remain inconclusive in the current literature, perhaps due to ignorance of the underlying mechanisms (Nadkarni & Herrmann, 2010). How-ever, this study's examination of the mediating role of team empowerment with regard to the relationship between CEOTMT exchange and decision quality goes some way to addressing this gap. An application of LMX to a TMT context also expands the impli-cations of this theory, which thus far has remained focused largely on workplace teams.

The study also contributes to the decision-making literature, especially in its integrated consideration of psychological empower-ment among executives and its effects on decisions, which highlights the significance of psychological states in decision-making and compensates for the over-emphasis on behavioral or attitudinal examinations of such issues (Amason, 1996; Ling et al., 2008; Seibert et al., 2011). The examination of strategic decisions in a low psychologically-empowered society, like Jordan, whose average empow-erment score is only 2.73 on a seven-point Likert-type scale in this study, provides a sobering yet valuable perspective on decision outcomes in this context. Regardless of whether firms operate in a low- or high-empowered environment, the benefits of team psychological empowerment on decision outcomes should not be underestimated (cf., Carmeli & Schaubroeck, 2006).

Implications

This research has the following implications. First, the exchanges that occur between a CEO and his/her TMT peers have implica-tions for team dynamics and strategic decision-making. As a result, the interpersonal interactions that occur within a TMT should be considered as a key strategic issue, rather than a trivial matter of personal relations. In TMTs where CEOs have developed individual

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TMT

Openness

TMT

Extraversion

TMT

Conscientiousness

TMT

Agreeableness

TMT

Neuroticism

CEO-TMT

Exchange Quality

.41***

.41***

.16*

Psychological.35***Decision

.30***

EmpowermentQuality

.22**

-.28***

-.17*.10*.22*

.13*.18*.14*.13*-.13*

.17**TMTCEOEnvironmentalEnvironmental

CEO-TMT

TMTFirm

Extraversion

DifferentiationDecentralizationMunificenceDynamism

SizeHeterogeneityAge

Fig. 1. Completely standardized estimates of the final model. Note: 1. This is a simplified version of the examined model. The insignificant paths, observed indicators, measurement errors, explained variances of latent factors, and correlations between exogenous factors are not included in the figure. 2. Control variables are depicted by dashed lines. 3. The path coefficients are standardized parameter estimates. N = 210, p b .05, p b .01, p b .001.

relationships with each of his/her executive peers, the motivation of team members will be elevated and decision quality will be improved.

Second, because TMT personality composition affects members' psychological state of empowerment and has effects on decision quality, the selection of executives that can constitute an effective TMT becomes imperative (Ling et al., 2008). In this sense, CEOs should consider either TMT members' horizontal personality fit (Chatman & Barsade, 1995), or the vertical personality fit between the CEO and other executives (Grant, Gino, & Hofmann, 2011). Indeed, a misfit TMT is often undermined by a toxic, political atmo-sphere which is harmful to team unity and decision outcomes. This issue is particularly vital in managerial settings where the impor-tance of personal relationships among decision makers, and the power dynamics between CEOs and other TMT members, are different from those in western cultures, such as in Jordan, the focus of the current work (Hofstede & Hofstede, 2005).

Similarly, because different personality traits may have the opposite effects on strategic decisions, CEOs should be able to discern the personality attributes of TMT candidates and the level of function or dysfunction with respect to each of these traits (Eisenhardt & Bourgeois, 1988). In particular, CEOs should pay more attention to the trait of emotional stability, as neurotic executives can hurt team chemistry and actions. TMT openness is also important, as our results show that while it has a relatively low score (mean = 3.41) it has relatively high direct and indirect effects on decision quality. Given that openness is a good predictor of team outcomes when sit-uations are novel or complex (Bell, 2007), TMT openness should be particularly valued in a dynamic business environment like Jordan (International Finance Corporation (The World Bank Group), 2011). In this vein, the fit between TMT personality traits and organiza-tional task environments should also be highlighted as it has significant implications for executives' psychological strength and deci-sion outcomes (Seibert et al., 2011). Conversely, because a more open climate can advance team empowerment, processes, and outcomes (Mathieu et al., 2006), an examination of the interface between the TMT openness trait and an open team climate may help to reveal the multifaceted interactions that occur among team members and their subsequent outcomes (cf., LePine, 2003).

Fourth, team empowerment is important in a TMT context. Indeed, the concept of psychological empowerment has been noted not only in academia, but also in business practices, over the past three decades (Seibert et al., 2011). CEOs should therefore work to advance TMT members' collective beliefs in their abilities and freedom to accomplish meaningful tasks for their companies, and thus create an enabling climate among TMTs.

In this vein, it is notable that Jordanian TMTs present a high CEO decentralization score (mean = 4.50), which is unexpected based on Hofstede and Hofstede's (2005) high power-distance prediction for Arab countries. Indeed, Hofstede and Hofstede's study has been criticized for lacking validity because they only studied six Arab countries, and then generalized their findings to all Middle-Eastern one (Al-Nashmi & Syd Zin, 2011). However, our preliminary finding is consistent with more recent studies indicating that Jordanian culture is a low power distance one, due to the very skilled workers operating in this country (Alkailani, Azzam, & Athamneh, 2012). In considering the opposing forces of low TMT psychological empowerment and high CEO decentralization, and their effects on decision quality, an empowering style of leadership appears to be critical for doing business in Jordan (cf., Carmeli et al., 2011).

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Finally, together with its significant findings with regard to the effects of environmental dynamism and munificence on decision quality, our study indicates how critical a firm's sensory and analytical mechanisms are when it comes to making good decisions (Chen et al., 2010).

Limitations and future directions

Although this study represents an important first step in examining an unexplored area of TMT research, it considers only the mean level of TMT personality attributes and its impact on psychological empowerment and decision outcomes. Conversely, TMT de-mographic research typically examines heterogeneity in demographic variables. Future studies might investigate TMT personalities from both convergent and divergent perspectives, considering the degree of both elevation and heterogeneity of personality charac-teristics among executives, and thus more closely compensate for the gaps in existing demographics-based research (DeRue, Hollenbeck, Ilgen, & Feltz, 2010; Harrison & Klein, 2007). Similarly, an application of the additive approach to calculate TMT person-ality composition ignores the variance among team members (Chan, 1998). Future studies can thus use the referent-shift consensus model to directly assess team collective personality attributes (Hofmann & Jones, 2005).

Second, our study concerns only the mean level of CEOTMT exchange quality, without considering the varied relationships between the CEO and his/her executive peers, although both the average LMX level and LMX differentiation are integral parts of leadermember dynamics (Henderson, Liden, Glibkowski, & Chaudhry, 2009). Given that there is a growing literature on LMX differentiation, and our control variable of CEOTMT exchange differentiation also significantly affects TMT empowerment ( = .18, p b .05), future research should explicitly conceptualize CEOTMT exchange from both convergent and divergent perspec-tives, and examine their individual and joint effects on TMT and firm outcomes.

Third, the interplay between the CEO and other TMT members remains underexplored. In particular, the issue of alignment is worth further attention. Recent research has found that extraverted leaders have better team performance when the team members are more introverted (Grant et al., 2011). As a result, future studies can look at how an individual CEO's personality traits moderate the relationships between TMT personality composition and psychological empowerment. An exploration of various TMT processes or psychological states through which CEO personality traits or leadership behaviors can exert effects on strategic choices and perfor-mance outcomes could also expand the theoretical lens of the upper-echelons theory.

In addition, although our study focuses on the individual effects of CEOTMT exchange and TMT composition on TMT dynamics, it's likely that there is a joint effect between CEOTMT exchange and TMT composition (Stoker et al., 2012). CEOTMT exchange also can determine TMT composition characteristics (Peterson et al., 2003). Thus, future research could devote efforts to identifying the mul-tifaceted relationships between CEOs and TMTs.

Fourth, an examination of the degree of TMT members' empowerment readiness (Ahearne, Mathieu, & Rapp, 2005) is also needed, with a focus on decision processes, such as comprehensiveness (Simons, Pelled, & Smith, 1999), commitment (Dooley & Frxyell, 1999), and consensus (Iaquinto & Fredrickson, 1997). Indeed, the various socio-psychometric bases and dynamics that exist among TMT members, and their implications for decision-making, require more attention for the theoretical and empirical development of upper-echelons research (Carmeli & Schaubroeck, 2006).

Fifth, the sample used in this study ddition, although our study focuses on the individual efwas drawn from Jordan, and despite the benefits of this, the generalizability of the findings requires further evidence. Additional research could be carried out, for instance, in other Arab communities or countries with similar cultural backgrounds. Such an extension would not only offer a promising avenue for cross-border comparative studies, but also advance our understanding of the functioning of high-level executives in this particular region (Zahra, 2011).

On a related vein, the differences between the business characteristics in western countries and Jordan, or the Greater Middle East, deserve further examination. For example, the tenure of a typical western CEO is rarely longer than 20 years, even in small-to-medium-sized enterprises (SMEs) (cf., Ling et al., 2008), while that of the CEOs examined in this study is 26.80 on average, suggesting that most of the CEOs in our sample are fairly experienced, a common phenomenon in family businesses (Miller, Le Breton-Miller, Minichilli, Corbetta, & Pittino, 2014). Indeed, family businesses control over 90% of commercial activity in Jordan (Family Business Institute, 2014), and future research can thus compare how the different ownership and governance structures that apply to family- and non-family-owned companies in the Middle East and the west affect the associations between CEO characteristics, CEOTMT interplay, and firm strategic initiatives (Zahra, 2011).

In addition, the role of women in TMTs is also worth examining. Only 15.1% of the respondents in our sample are female, which reveals that there are few women who manage to make it to the top ranks of senior leadership in the Middle East (Zahra, 2011: 18). This is not surprising because Jordan's masculine culture is hostile to women, and there is an implicit glass ceiling that stops them from being promoted to the upper-echelons of firms (Alkailani et al., 2012). A recent statistics also show the percentage of women in senior management positions is only 14% in the Middle East, which is lower than those found in some western countries such as U.S. and United Kingdom, whose TMT members include 22% and 20% of women, respectively (Grant Thornton, 2014). Future research could work to identify women who have succeeded in breaking through such gender barriers, and examine their role with regard to TMT dynamics and decision-making.

Sixth, the sampling of companies from various industries, as in the current work, may be a further limitation, due to the possible confounding effects of industry-specific characteristics. However, the inclusion of environmental dynamism and munificence as controls should mitigate these concerns. Because the sample was collected from at least 50% of the senior executives in each firm, the accuracy and consistency of the research data should also outweigh any possible shortcomings. Future research should identify

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more environmental characteristics from both subjective and objective sources and more explicitly conceptualize the broader industrial and environmental contexts and their implications for TMT dynamics (Dess & Beard, 1984).

In addition, the actual direction of causality could be the opposite of that proposed in this work. Indeed, it may be that executives with better decision quality tend to perceive themselves as highly empowered and as having good CEOTMT exchange quality and the personality characteristics that are conducive to top management teamwork. To address this concern, future studies should examine the interrelationships among key constructs using a longitudinal design to develop a fuller understanding of CEOTMT interface, TMT composition, TMT dynamics, and decision outcomes.

In conclusion, this study's examination of CEOTMT exchange quality and TMT personality characteristics as driving forces of psy-chological empowerment, and as sources of strategic decisions, has derived a number of critical insights for a diverse range of research topics and business practices. This study has thus elucidated the essential social and psychological capacities that are requisite for TMTs to generate quality decisions.