A Multi-Level Analysis of the Upper-Echelons Model

Abstract

The upper-echelons model of Hambrick and Mason (1984) launched a new area of research and provided the first overall theoretical framework for use in understanding how the experiences, backgrounds, and values of senior executives in organizations can importantly impact the decisions that they make. The model is typically assumed to be what Rousseau (1985) calls “multilevel”, as it describes how both individuals and top management teams (TMTs) make decisions in line with their preferences, biases, and values and the same model describes both individuals and groups. However, the levels issues in the model have never been subjected to rigorous analysis. In this chapter, we juxtapose levels concepts and theories on the upper-echelons model, to highlight its strengths as well as its weaknesses. While the majority of researchers use the model to describe team-level decision making, our analysis reveals that the model is inherently individual-level in focus, and several important limitations must be overcome before the model will provide a full explanation of team-level decision making.

Keywords: Top Management Teams, Upper Echelon Theory, Multilevel Theory