Profiting from empowerment at the top: The role of CEO-TMT members dissimilarity

Although an increasing number of researchers have studied senior managers’ leadership, the empowerment component of leadership has been examined mainly with respect to low- to middle-level teams and has been virtually ignored at the top executive level. Thus, whether empowering CEOs impact their direct followers (top management team members) and, in turn, the organization as a whole, and what factors may influence this process remains relatively unexplored. To help fill this gap, we propose and test a model linking CEOs’ empowering style of leadership with organizational performance. After explaining why we expect empowering CEOs to influence organizational performance, we further clarify the nature of this effect by integrating contingency theory and the literature about relational demography to predict a moderating role of CEOs’ dissimilarity to other TMT members. We use data from a multi-source survey of CEOs and their top management teams in 129 Chinese organizations to obtain general support for these hypotheses.