An Analysis On Upper Echelon Theory Essay

The Upper Echelon Theory links the attributes of firm performance and top management team members. Furthermore, this theory argues that the attributes of a certain person affect the attitudes and preferences of top members and the team dynamics. The theory suggests that the organizational outcomes are the result of the strategic choices that the managers make.

The idea that the values, goals, and aspirations of top management influenced organization’s culture and systems can be proven by numerous corporations from different industries that have gained reputation and credibility in the marketplace for providing excellent products and quality services (Coyle-Shapiro, 2005).

Those companies have good historical backgrounds and currently possess great missions and visions for their organizations.

The goals and values of a certain organization determine the competitive strategy of the firm as suggested by the theory. Apparently, the prominent organizations that have been included on the lists of profitable companies portray excellence in terms of employee line-ups and performance. The people who are highly skilled and possess strong determination are usually found working in these corporations.

In other words, the people on the top management could predict the success and future status of the company based on the values and goals that the company would like to achieve in every project. On the contrary to the theory of Hambrick and Mason, Laske and Maynes suggest that people have already their firm beliefs regarding certain issues prior to their participation to an organization. Naturally, people act, talk, and behave according to the constructed reality that the society had provided for them (Laske and Maynes, 2002).

In this aspect, Laske and Maynes argue that the organization may or may not fail regardless of the values set by the organization because of the diverse personalities under that firm. The person who works for a certain organization may do his or her job merely because of the benefits like compensation and promotion that the company can offer and not because of what the goals that the top management would like to achieve for the company as a whole.

Generally, upper echelon theory proposes a good view in the organizational outcomes; however, it shows conflicts on the values that the company sets and the employees in that firm possess.


Coyle-Shapiro, J. (2005). The Employment Relationship. USA: Oxford University Press Laske, O. and Maynes, B. (2002). Growing the Top Management Team: Supporting Mental Growth as a Vehicle for Promoring Organizational Learning. The Journal of Management Development. Bradford: MCB Ltd. Vol. 21

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