Upper Echelons Theory and Research: A review of theory and empirical literature 28 years later

Since the seminal work of Hambrick and Mason (1984) researchers have devoted significant attention to exploring how the human side of managers, such as their backgrounds and psychological characteristics, influence the decisions they make (Nielsen 2010). However the upper echelons research in the last three decades has been equivocal in the light of the question “Do top executives really matter as much to company outcomes as the theory seems to presume?” This paper set to review the literature on upper echelons research and theory. Our review highlights that, (1) upper echelons theory is still relevant to strategic management today as it was three decades ago, and (2) in line with Hambrick (2007) top executives really matter to company outcomes as they make decisions and engage in behaviors that affect the health, wealth, and welfare of firms – but they do so as flawed human beings. Key concerns of our highlight are, (1) the concentration of upper echelons research in the United States of America and, (2) the near-absence of upper echelons research in Africa. Finally our review highlights a number of future research directions.