Determinants of Top-Down Sabotage

Abstract

We investigate the conditions that motivate managers to impede the growth of talented subordinates due to fears of future competition for their own positions. Our research expands on existing tournament and contest theory literature that considers peer-to-peer sabotage as an unintended consequence of relative performance evaluation (RPE) to sabotage across hierarchical levels. Drawing on survey data from 335 U.S. corporate executives, we find that top-down sabotage (TDS) is not driven by RPE systems, but thrives in environments where subjective managerial discretion dominates the performance evaluation process. Weak management control systems create opportunities for such discretion, undermining RPE's effectiveness as a self-monitoring tool. Notably, our results reveal that organizational culture emerges as the most significant factor in mitigating TDS. For firms concerned about TDS hampering succession planning, our findings suggest fostering a collaborative culture and cultivating employees’ sense of organizational identity and belonging. These insights contribute to our understanding of organizational dynamics and offer practical guidance for both management scholars and practitioners, shedding light on the complex interplay between hierarchical structures, performance evaluation systems, and strategic behaviors in modern organizations. 

Keywords: succession planning, organizational hierarchy, compensation, promotions, tournaments