Top management team characteristics, organisational design and financial performance of publically traded companies on the JSE Altx

Abstract

In the South African context, understanding factors, which influence financial performance, is of particular importance in lieu of slowing economic growth rates and high levels of unemployment. The JSE Altx was developed to provide SME organisations with access to capital markets and thereby facilitate growth. The success of the exchange has however come under scrutiny and the value added to both investors and entrepreneurs questioned. Continued poor performance of Altx listed organisations may deter further listings and future investment. Research into developing an understanding of factors that affect growth in Altx firms could provide insights into what can improve firm performance and ensure their contribution to national growth and competitiveness. This research determines the predictor variables, which affect financial performance of such firms listed on the Altx. Top Management Team (TMT) characteristics were investigated to determine how they impact firm performance. The possible causal relationships between firms who have appointed external CEO's and firms whose original founders are the current CEO's were also analysed. On the organisational level ?growing pains' is hypothesised as having a causal relationship to financial performance. The relationship between TMT characteristics and firm level ?growing pains' was further explored at an organisational level. The research finds that TMT characteristics influence firm level ?growing pains', which ultimately affect the financial performance of the firms.