Does participatory decision‐making in top management teams enhance decision effectiveness and firm performance?

Purpose The purpose of this paper is to examine how participatory decision‐making processes in top management teams (TMT) influence strategic decision effectiveness and firm performance. Design/methodology/approach Data from 94 TMTs are collected from structured surveys. Each firm's CEO provides data on strategic decision effectiveness, and a senior executive member of the TMT provided data on participatory decision‐making processes and firm performance. Findings Results show that participatory decision‐making processes in the TMT are positively associated with decision effectiveness, but there is both a direct and an indirect relationship (through decision effectiveness) between participatory decision‐making processes and firm performance. Originality/value This paper sheds light on the importance of joint decision‐making processes among TMT members for improving choices and enhances firm performance.