Journal of Business and Economic Development 2020; 5(1): 36-43 http://www.sciencepublishinggroup.com/j/jbed doi: 10.11648/j.jbed.20200501.15 ISSN: 2637-3866 (Print); ISSN: 2637-3874 (Online) Top Management Team Psychological Characteristics and Organizational Performance Joseph Odongo Oketch, James Mutuku Kilika, Godfrey Muigai Kinyua Department of Business Administration, School of Business, Kenyatta University, Nairobi, Kenya Email address: To cite this article: Joseph Odongo Oketch, James Mutuku Kilika, Godfrey Muigai Kinyua. Top Management Team Psychological Characteristics and Organizational Performance. Journal of Business and Economic Development. Vol. 5, No. 1, 2020, pp. 36-43. doi: 10.11648/j.jbed.20200501.15 Received: February 7, 2020; Accepted: February 20, 2020; Published: March 2, 2020 Abstract: Previous strategic management researchers have argued that TMT psychological characteristics have the potential to significantly affect organizational performance. Some of these previous scholars have argued that inquiry into the influence of TMT psychological characteristics on organizational performance should start by examining the process by which traits affect behaviours of the TMTs and hence the outcomes of their actions. The specific objective of the study was to examine the effect of top management team psychological characteristics on organizational performance of the independent regulatory agencies in Kenya. To achieve this objective, the study adopted descriptive cross-sectional research design. The target population of the study was the twenty-three independent regulatory agencies currently existing in Kenya. Due to the uniqueness of each independent regulatory agency and the distinct roles played by each top management team member in their organization, the study adopted a census survey of all the top management team members in all the twenty-three independent regulatory agencies in order to capture the required information. Primary data was gathered using structured questionnaire administered through drop and pick later method. Descriptive statistics was then used to summarize the survey data into percentages, frequencies, means and standard deviations. Inferential statistics employed regression analysis to test hypothesis and draw conclusions. The findings of the study showed that top management team psychological characteristics significantly affect organizational performance. The study recommends that the recruitment process of the TMTs should include psychological characteristics as requirements apart from the normal demographic characteristic requirements mostly in use. Keywords: Top Management Team Psychological Characteristics, Independent Regulatory Agencies, Organizational Performance 1. Introduction There has been growing concern amongst strategic management researchers and practitioners alike to endeavour to understand reasons that lead to some organizations achieving superior organizational outcomes than others even if they are operating within the same or similar business environments [22]. Some previous researchers in psychological resource theories have asserted that top management team (TMT) psychological characteristics can give insights into employees’ motivation to acquire, maintain, and build capabilities essential for achieving superior organizational performance. In particular, these categories of previous scholars have argued that a person’s motivation and selections can be elucidated by psychological characteristics or traits like efficacy, hope, optimism and resilience that create higher order capabilities that in turn drive individual performance [10, 30]. The upper echelons theory posits that in considering internal and external factors of the organization in their strategic decision making processes, top management teams (TMTs) act as filtering mechanisms, interpreting the data through their own cognitive bases and values. Thus, the TMTs’ psychological characteristics are important predictors of the TMTs’ potential to affect performance of their organizations, as these characteristics are the primary influencers of each individual’s cognitive standing, values and biases [26]. The top management team in any organization are the highest-ranking officials in that organization. The titles of the TMT members however vary from one organization to