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Management teams are critical drivers of the performance of business units. Is it possible to increase performance – that is, revenue – by engaging in “collective organizational citizenship behavior” (COCB)?
“Upper echelons theory” suggests that management team characteristics influence the strategic decisions that determine business performance, yet COCB – one important characteristic of team behavior that is usually shown to enhance team performance – has received little attention in the upper echelons literature to date; as investigations have tended to focus on lower-level businesses and student teams. And while the effects of internal contingency factors for the effect of COCB have been examined, external contingency factors have not been studied. This is surprising, given that business units operate in external environments that can critically influence teams’ effectiveness.
COCB emerges from individual OCB, which incorporates conscientiousness, altruism, courtesy, sportsmanship and civic virtue. Collective behaviors can include attending non-required meetings – conscientiousness; helping other team members – altruism; being considerate to others in the team – courtesy; not complaining about trivial matters – sportsmanship; and showing concern for the future of the team – civic virtue. Within business unit management teams, members interact and work with each other regularly and continuously to achieve unit objectives, creating conditions that enable COCB to emerge. This in turn helps individual members make sense of complex situations, influences their affective and motivational states, and guides them regarding appropriate behaviors in specific situations.
The research team came up with three hypotheses: that COCB in management teams is positively related to business unit performance; that environmental uncertainty moderates the positive relationship between COCB in management teams and unit performance such that the relationship is stronger when environmental uncertainty is higher; and that team decision latitude moderates the positive relationship between COCB and unit performance, such that the relationship is stronger when decision latitude is higher. They also posed the question, do management team COCB, environmental uncertainty and decision latitude interact to predict unit performance, such that the positive relationship between COCB and performance is the strongest when both environmental uncertainty and management team decision latitude are high?
The research process involved collecting data from the business units of a large telecommunications company in China. Pilot interviews were held with senior managers of units across various business environments. A total of 200 GMs agreed to participate; they were given questionnaires toward the end of the financial year, which they passed on to other management team members. The GMs were contacted by telephone one year later to collect data, and GM-reported gross sales were used to measure units’ performances.
The research team found that its three hypotheses were supported, and that the interaction in the question posed was significant. COCB in management teams generally benefitted unit performance, even more so when environmental uncertainty or management team decision latitude was high. COCB in management teams benefited unit performance most when both environmental uncertainty and team decision latitude were high.
This research is notable because it examined COCB in a novel context – that is, in high-level management teams. It has also extended upper echelons theory and research. In the sample, a one-standard-deviation increase in COCB was associated with an increase of US$1.98 million in BU sales. It is suggested, therefore, that management team members should actively engage in behavior that exhibits conscientiousness, altruism, courtesy, sportsmanship and civic virtue. Managers can utilize these findings to construct a high-performance work system or a high-procedural-justice climate that promotes COCB. In addition, to reap more benefit from COCB, organizations should give more managerial discretion to their BU management teams especially when the teams operate in uncertain environments.