The Relationships between Top Management Demographic Characteristics, Rational Decision Making, Environmental Munificence, and Firm Performance

This study examines the relationships between top management demographics, rational decision making (RDM), munificence, and firm performance. We expect top management demographics to influence rational decision making, and rational decision making to influence firm performance. In addition, we hypothesize a moderating effect of environmental munificence on the rational decision making-firm performance relationship. To test these hypotheses, we conducted a survey that measured RDM. Top management demographic characteristics, environmental munificence, and firm performance were collected from archival sources. We examined the relationships between RDM and top management age, tenure, and education level, using regression analyses. The results of this study provide support for the assertion that top management demographic characteristics influence decision making, and for the role of environmental munificence as a moderator in the relationship between decision making and organizational performance.