Top Management Team Diversity, Quality o f Decisions and Performance of Commercial Banks i n Kenya

Abstract

There have been different findings as to whether T op Management Team Diversity affects the performance of organizations. Some past studies have found that the characteristics of the Top Management Team influence the performance of organizations while others have found that they do not. This study, which i s founded on the Upper Echelon Theory, investigated the effect of TMT diversity on organization performance . Some researchers have suggested that top management characteristics, specifically their demographic characteristics could impair decision making an d thus organization performance . As a result, the study sought to find out the effect of quality of decisions on the relationship between TMT diversity and the performance of commercial banks in Kenya. The target respondents were the Heads of Human Resourc es in all the banks and out of the 43 targeted banks, thirty three responded . The TMT diversity attributes under study were age, gender, academic qualifications, tenure in the bank and at the top, professional and functional background diversity while the balanced score card was used as the measure for performance. The study found that the quality of decisions ha ve a significant effect on the relationship between TMT diversity the performance of banks.