Abstract

Upper-echelons theory has provided a rich stream of research and correlations between the demographics of strategic leaders and firm outcomes are well documented. Despite repeated calls for more micro oriented research and research that explores not just if, but also how demographics shape outcomes, a lacuna remains. This paper takes on the challenge of defining and measuring the role that both demographics and psychometrics play in shaping, within the black-box processes. The paper is a rare example of research that directly measures the psychological properties of managers (through robust instruments rather than proxies). The paper then examines the role that both demographic and psychological properties play in shaping the perceived discretion of managers. The results provide evidence that demographics may indeed be very noisy proxies.