Values Heterogeneity: An Overlooked but Important Antecedent of TMT Conflict and Effectiveness

Demographic heterogeneity and conflict have both been shown to influence the effectiveness of top management team (TMT) decision-making. While evidence of positive and negative effects exists, evidence linking heterogeneity and conflict together also exists, making it difficult to reach any conclusion about the relationships between conflicts and outcomes. Drawing upon action theory (Parsons, 1937; Parsons and Shils, 1951), this paper argues that value heterogeneity is an overlooked determinant of how demographic heterogeneity affects conflict and how heterogeneity and conflict together influence the effectiveness of TMT decision-making. Results support the hypotheses and make meaningful additions to the conflict literature.