The Moderating Role of the Legal Environment on the Relationship Between TMT Characteristics and Organizational Performance in a Regulatory Setting in Kenya

Abstract

Some previous studies in organizational performance have illustrated that top management team (TMT) characteristics have the ability to lead to more practical strategic decisions, better creativity, value adding innovations and to assist organizations to engage with diverse stakeholders that in effect positively impact on organizational performance. The specific objectives of the study were; to determine the effect of top management team demographic characteristics, to examine the effect of top management team psychological characteristics and to assess the effect of top management team cognitive characteristics on organizational performance of the independent regulatory agencies in Kenya. To achieve these objectives, the study adopted descriptive cross-sectional research design. The target population of the study was all the twenty-three independent regulatory agencies currently existing in Kenya. Due to the uniqueness of each independent regulatory agency and the distinct roles played by each top management team member in their organization, the study adopted a census survey of all the top management team members in all the twenty- three independent regulatory agencies in order to capture the required information. Primary data was gathered using structured questionnaire administered through drop and pick later method. Descriptive statistics was then used to summarize the survey data into percentages, frequencies, means and standard deviations. Inferential statistics employed regression analysis to test hypotheses and draw conclusions. The findings of the study showed that there is no significant effect of top management team demographic characteristics on organizational performance. The findings further showed that top management team psychological characteristics significantly affect organizational performance. Lastly, the findings established that top management team cognitive characteristics significantly affect organizational performance. The study recommends that the recruitment process of TMTs should include psychological and cognitive characteristics as requirements apart from the normal demographic characteristics requirements mostly in use.