TOP MANAGEMENT TEAMS (TMTS) AND AIRLINES' STRATEGIC RISK-TAKING

초록

This study examined the determinants of strategic decisions, particularly risk taking decisions in the U.S. airline industry, using five attributes (e.g., age, tenure, education, share ownership, and stock options). For this study, 15 publicly traded U.S. airlines and information on 194 TMTs were used. Panel feasible generalized least squares (FGLS) was selected as the main analytic method. The results show that TMTs' tenure, education, and share ownership play a significant role in airlines' strategic risk-taking decisions. Shareholders and boards of directors can use background information when selecting agents to achieve the desired outcomes. Investors can also use this information to assess the potential risks of airline stocks. This study validates upper echelon theory's conceptual framework for the airline industry and verifies the relationship between the TMT's backgrounds and characteristics and risk-taking decisions.

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