Strategic Management by Nikodemus Hans Setiadi Wijaya, Ph.D.

Article Review
Prepared by : Indra Ayu Fatmala

Title : Upper Echelons: The Organizations as a Refelction of Its Top Managers

Author : Donald C. Hambrick & Phyllis A. Mason

One of the important key in organization theory is why do organizations act as they
do? Each of organization has their own true color and culture, so it was possible that
every part of organization was affected by how was their organization’s culture is.
The common question that mostly run in our mind is, who or what influenced
organization? Some macroorganization research found that organizational outcomes
both is strategic and effectiveness are viewed as reflections of the values and
cognitive base of powerful actors in the organization (pg. 193) which is the Managers.
Upper Echeleons Theory is a management theory that explain how what is the
correlation between organizational outcomes and by its managerial backgrounds
characteristic. Most people said, managerial backgrounds also made by their manager
which mean organizational outcomes has direct correlation with manager of the
organization. How can managers affected the organizational outcomes? Managers
takes an important role to strategic decision making and resource allocation. They
decided what kind of strategy that should they do to make a great synergy between
dynamic situations. Strategy itself reflecting their values and cognitive.
There is many factors that affected manager’s personality such as age,
education, work experience, socioeconomic background, also group heterogenity.
Thus, it determines their ability to solve problem in a complex situasion and how th
situation should be managed. In this paper, Hambrick and Mason showed us how is
the age work in their decision making process, age is affecting their willingness and
ability to fight with the risk. The younger one would prefer a great and risky strategy,
different with the older one who has many work experience will choose the safe
strategy, they might be burdend by their past experience so it makes them careful
when deciding. Education may take a role as their potential achievement, how they
are think and work it is mostly affected by education, because the consistent finding is
that level of education is positively related to receptivity to innovation (pg. 200).
Otherwise, socioeconomic backgrounds would affect the growth strategies of their
firms (pg. 201), it is different managed by executive from enterpreneur family
background and executive from scientist family background. Homogenity is one of
several conditions that bring on groupthink which amounts to restricted generation
and assesment of alternative (pg. 202), the common discusion of this aspect said that
group homogenity mostly about the differences personality type, demography, and
social background between each person in group, it is directly affected executive
when deciding a strategy. If the managers is homogenus with person in group,
management team will make a decision more quickly than if the managers on
heterogenity group (pg. 203).
Selecting a great managers is an important thing that organization should do to
maintain their sustainability. Conducive atmosphere must be realized to create a good
teamwork between managers and employees under organization. In this case,
organization should choose managers and executive that suit with organization and its
culture because managers will affect the image of organization.