JOURNAL OF MANAGERIAL ISSUES Vol. XVI Number 3 Fall 2004: 361-381

Diversification Strategy and Top Management Team Fit
Dan Marlin
Assistant Professor of Management

University of South Florida — St. Petersburg

Bruce T. Lamont
Professor of Management

The Florida State University

Scott W. Geiger
Assistant Professor of Management

University of South Florida — St. Petersburg Matching managers to diversification strategy has long been a cornerstone of strategy implementation research (Finkelstein and Hambrick, 1996; Guthrie and Datta, 1998; Krishnan et al, 1997; Leontiades, 1982; Michel and Hambrick, 1992; Pitts, 1977; Reed and Reed, 1989; Song, 1982; Tihanyi et al, 2000). The basic premise underlying this body of research is that different strategies pose different management challenges that, in turn, require systematically different management skills and experiences to be implemented successfiilly. Managers with backgrounds and skills matched to the critical task demands of a firm's diversification strategy, therefore, should be reflected in superior financial performance. Despite the logical appeal of these arguments, their empirical support remains limited and uneven. The cumulative findings suggest that managers of multi-business firms are generally matched to the task demands of their firm's diversification strategies (Michel and Hambrick, 1992; Pitts, 1977; Song, 1982), although contrary evidence has been found as well (Reed and Reed, 1989). Further, the support for performance improvements from matching managers to diversification strategies is equally mixed (cf, Michel and Hambrick, 1992; Reed and Reed, 1989). One reason for the inconsistencies and limited support found in previous studies may lie in two simplifying assumptions underlying the research designs used. First, previous research

JOURNAL OF MANAGERIAL ISSUES Vol. XVI Number 3