How CEO empowering leadership shapes top management team processes: Implications for firm performance

This study examines how CEO empowering leadership shapes top management team (TMT) behavioral integration and potency, thereby enhancing firm performance. Using a sample of 82 TMTs, structural equation modeling supports a mediation model in which CEO empowering leadership is positively related to TMT behavioral integration, and, in turn, it enhances TMT potency and firm performance. The effect of TMT potency on firm performance is stronger when the TMT members perceive high environmental uncertainty. We discuss both theoretical and practical implications of the paper for research on Upper Echelons Theory and TMTs.