title: Executives' Goal Orientation and Characteristics: Influences on Firm Decision-Making, Search, and Performance
Creators: name: Orbes Cervantes, Irina
Publisher: name: The Australian National University
Year: 2024

description: Upper echelons theory (UET; Hambrick 2007; Hambrick &amp; Mason 1984) proposes that a firm is a reflection of its top managers (Lin &amp; Lin 2019; Richard, Wu &amp; Markoczy 2019). Specifically, executive leaders shape firm strategy and develop strategic responses to enhance search, knowledge acquisition and performance (Hambrick 2007). Building on this logic, I explore the roles of chief executive officers (CEOs) and top management teams (TMTs) as strategic decision-makers and the architects of firms' strategies (Calori, Johnson &amp; Sarnin 1994). I seek to understand the characteristics and attributes that influence their choices and decisions. These attributes likely influence their behaviour, preferences and motivations and the lenses through which they assess information. In turn, these factors play an important role in predicting firms' overall strategic directions and performance consequences (Bromiley &amp; Rau 2016; Hambrick, Humphrey &amp; Gupta 2015). I analyse this complex decision-making process by studying two important executive attributes: (1) CEO goal orientation, which concerns the types of goals that individuals set in achievement situations, their areas of focus and how these goals influence self-regulation (Dweck 1986) and (2) TMT functional diversity, which refers to the degree of different career experiences among TMT members (Carpenter, Geletkanycz &amp; Sanders 2004). This thesis comprises three main chapters, which consider large publicly traded US firms (S&amp;P 500) from 2006 to 2019. CEO and TMT measures are used as proxies for firm-level analysis. In the first study, I describe the process of developing and validating a content analysis dictionary of the goal orientations of CEOs. This process encompasses two dictionaries, each based on a distinct construct of goal orientation: learning orientation and performance orientation. Their formulation was grounded in theoretical foundations and an analysis of the frequency of words in surveys as well as shareholder letters. Following a validation process, these dictionaries demonstrated their efficacy in accurately predicting CEO goal orientations. The second study examines the impact of CEO goal orientation on firm search behaviour in response to performance shortfalls. This study reveals that learning oriented CEOs who face historical performance shortfalls and performance oriented CEOs who experience social performance shortfalls tend to increase their search. This underscores the notion that individual motivations affect leaders' attention, leading to the initiation of search when experiencing performance shortfalls. The third study investigates how CEO learning orientation and TMT functional diversity interplay in firms' decision-making processes, focusing on knowledge acquisition strategies and firm performance. The findings suggest that CEO learning orientation and TMT functional diversity strengthen the relationship between knowledge acquisition and firm performance. However, when the two are at a high level, the strengthening effect is not as pronounced. Further, when the two are at a low level, the relationship weakens. In conclusion, this study highlights the ways that CEOs' psychological attributes and TMTs' characteristics influence firm outcomes, advancing UET. By integrating psychological and sociological theories, this work paves the way for a more comprehensive understanding of CEOs' motivations, TMTs' diversity, leadership behaviours and their collective impact on strategic outcomes. The data for this study were gathered from shareholder letters, annual firm reports, industry-level data and executive profiles from various databases.