Psychological team make-up as a determinant of economic ®rm performance An experimental study Christophe Boone, Woody van Olen * , Arjen van Witteloostuijn Department of Management Sciences, Faculty of Economics and Business Administration, Maastricht University, P.O. Box 616, 6200 MD Maastricht, The Netherlands Received 3 November 1995 Abstract The majority of economic theories of the ®rm, particularly industrial organization (IO), tend to treat decision makers as abstract depersonalized pro®t-maximizers, as humans without ¯esh and blood. The present study attempts to explore the economic consequences of human variation by examining a key aspect of internal organization, the features of a ®rm's top man- agement team (TMT), in relation to organizational performance in a competitive context. Speci®cally, we will analyze the eects of dierent team compositions with regard to a well-es- tablished psychological trait, namely locus of control (Rotter, 1966). There exists an impres- sive amount of past research into the eects of leaders' and individuals' locus of control in decision making and leadership situations. From this, hypotheses are derived as to the relative performance of teams that are predominantly internal, predominantly external or mixed with regard to their members' perceptions of control. We include the impact of environmental dy- namism as an interaction variable aecting the relationship between team composition and ®rm performance. The study was carried out in the experimental setting of an elaborate mul- tinational business game. Results show that the ®ndings on the performance implications of locus of control at the individual level of analysis are valid at the group level as well, which points to interesting avenues for future research. Moreover, the ®ndings suggest the potential fruitfulness of cross-fertilizing insights from organization theory and IO. Ó 1998 Elsevier Science B.V. All rights reserved. Journal of Economic Psychology 19 (1998) 43±73 * Corresponding author. Tel.: +31 43 883880; fax: +31 43 258495; e-mail: w.vanolen@mw.unimaasnl. 0167-4870/98/$19.00 Ó 1998 Elsevier Science B.V. All rights reserved. PII S0167-4870(97)00036-6