EXECUTIVE JOB DEMANDS: NEW INSIGHTS FOR ......As noted above, we define executive job de-mands as the degree to which a given executive experiences his or her job as difficult or chal-lenging

EXECUTIVE JOB DEMANDS: NEW INSIGHTSFOR EXPLAINING STRATEGIC DECISIONS AND

LEADER BEHAVIORS

DONALD C. HAMBRICKThe Pennsylvania State University

SYDNEY FINKELSTEINDartmouth College

ANN C. MOONEYStevens Institute of Technology

Executive jobs vary widely in the difficulty they pose for their incumbents, yet re-search on top executives and strategic decision making has largely ignored thisreality. We build on work in industrial/organizational psychology to develop theconstruct of executive job demands; discuss its major determinants; propose some ofits key implications for strategic choices and leadership behaviors; and propose theusefulness of this construct in advancing research on numerous fronts, includingagency theory, executive compensation, and upper echelons.

In recent years the study of top executives hasbecome an important research strand within thefield of strategic management, as researchershave attempted to understand the role of humanfactors in strategic choice, organizational de-sign, and performance (Finkelstein & Hambrick,1996). Missing, however, has been any concep-tual apparatus for describing or analyzing thedifficulty that executives experience in theirjobs. Indeed, in prior research on executives,scholars have implicitly held job difficulty con-stant. We have some idea of what executives do(Kotter, 1982; Mintzberg, 1973), and we have evi-dence that executive personalities and experi-ences can affect organizational outcomes (Ban-tel & Jackson, 1989; Miller & Droge, 1986), but wehave no insights about how the degree of chal-lenge a given executive experiences in his orher job will affect task conduct, strategic ac-tions, or performance. Some executives, for in-stance, operate in munificent environments,lead companies that have well-fortified (some-times even monopoly) positions, and are sup-ported by highly capable colleagues, whereasother executives have none of these comforts.

Executive jobs vary in the difficulty they pose fortheir incumbents, yet research on top managershas consistently disregarded this reality, leav-ing important puzzles unaddressed.

Lack of attention to executive job demandsmay account, in part, for the incomplete andinconsistent explanations of strategic behaviorthat researchers have generated. One group ofstrategy researchers tends to assume that exec-utives can largely comprehend their strategicsituations and will pursue actions that logicallyfollow from the contextual situations they face(e.g., Brandenburger & Nalebuff, 1997; Porter,1980). Other groups of researchers tend to ad-here to assumptions of bounded rationality (e.g.,Cyert & March, 1963)—the premise that execu-tives face too many stimuli and are under toomuch pressure to be able to comprehensivelyand accurately weigh their objective situations.Instead, according to these scholars, executivesfilter and interpret the overwhelming stimuliconfronting them either by relying on their per-sonal experiences and repertoires (e.g., Ham-brick & Mason, 1984) or by imitating the actionsof others (e.g., DiMaggio & Powell, 1983). Al-though studies in all of these streams of re-search have explained some variance in strate-gic behaviors among firms, the amount ofexplained variance is almost always modest,and sometimes, depending on the sample, it is

We gratefully acknowledge helpful suggestions fromAllen Amason, James Fredrickson, Marta Geletkanycz,Nathan Hiller, Raymond Horton, Richard Reilly, and LindaTrevino.

� Academy of Management Review2005, Vol. 30, No. 3, 472–491.

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nearly nonexistent. We can anticipate that ex-ecutive job demands constitute a crucial omittedvariable in prior strategy research. In particular,assumptions of strategic rationality may lead tothe strongest predictions when executive job de-mands are only slight or moderate. In contrast,assumptions of bounded rationality, and the ac-companying logic of upper echelons and insti-tutional theorists, may be most predictive underconditions of high executive job demands.

In this article we build on work in organiza-tional behavior and industrial/organizationalpsychology to develop the construct of executivejob demands, which we define as the degree towhich a given executive experiences his or herjob as difficult or challenging. We consider ex-ecutive job demands to be a variation of thebroader, well-established construct of job de-mands (e.g., Janssen, 2001; Karasek, 1979)—andit might even be referred to, awkwardly, as “jobdemands at the executive level.” As we willargue, however, a specific focus on executivejob demands may greatly advance our under-standing of strategic decision making, and itmay even open up new research avenues forthose interested in job demands generally. Wewill specify the set of factors that determineexecutive job demands; these factors have ana-logues at other organizational levels but aremanifested in distinctive ways at the executivelevel. We also will propose major consequencesassociated with executive job demands, focus-ing on strategic choices and leadership behav-iors. These outcomes are particularly germaneto the executive level and have received no at-tention in the existing literature on job de-mands. Our ideas are meant to apply to all typesof executive positions, including CEOs, COOs,and divisional presidents.

THE CONCEPT OF EXECUTIVE JOB DEMANDS

Existing Literature on Job Demands

Researchers in organizational behavior andindustrial/organizational psychology have longbeen interested in the job demands placed onindividuals (e.g., Janssen, 2001; Karasek, 1979;Xie & Johns, 1995). One main research thrust hasprovided evidence that job demands engendermental strain and stress (Karasek, 1979; VanYperen & Snijders, 2000; Wall, Jackson, Mullar-kety, & Parker, 1996; Xie & Johns, 1995), as well as

physical health problems (Fox, Dwyer, & Gan-ster, 1993; Theorell & Karasek, 1996; Warr, 1990).In a substream of research, scholars have pur-sued Karasek’s (1979) idea that these harmfuleffects of job demands are greatest when cou-pled with lack of job latitude or control, findingmixed empirical support (Fletcher & Jones, 1993).

In another major thrust of research on job de-mands, researchers have examined the relation-ship between job demands and both job perfor-mance and job satisfaction. According to theirresearch, increases in job demands cause work-ers to perform better and become more satisfiedwith their jobs, but only up to a point, beyondwhich performance and satisfaction start to de-cline (Gardner, 1986; Gardner & Cummings,1988; Janssen, 2001; Scott, 1996). Researchershave also found this inverted-U relationship tobe moderated by demands-ability fit (Xie &Johns, 1995), pay and supervisory satisfaction(Champoux, 1992), and perceptions of the ratiobetween job demands and rewards (Janssen,2001).

Researchers of job demands have used vary-ing definitions of the construct, including roleobligations (Janssen, 2001); instigators of workaction (Dwyer & Ganster, 1991; Janssen, 2000;Karasek, 1979); and the degree to which an em-ployee has to work fast and hard, has a greatdeal to do, and has too little time to fulfill jobresponsibilities (Ganster & Fusilier, 1989; VanYperen & Snijders, 2000). Accordingly, job de-mands can be seen as a relatively broad con-cept incorporating both quantitative demands—how much workload a person faces—andqualitative demands—role ambiguity and con-flicting obligations a worker faces (Janssen,2001; Karasek, 1979). As Janssen argues, “Usingbroad definitions and measurements that mixup quantitative and qualitative aspects mayproduce unclear theory on the nature and con-sequences of job demands” (2001: 1040).

To avoid such problems, Janssen (2000, 2001)and most other researchers (e.g., Dwyer & Gan-ster, 1991; Ganster & Fusilier, 1989; Karasek,1979; Van Yperen & Snijders, 2000) specify thattheir focus is on quantitative job demands. Aswe explain below, we also focus on quantitativejob demands (the degree of overall difficulty anexecutive experiences) and exclude, for now,consideration of qualitative demands that mightarise when an executive is torn or conflictedabout which of these challenges, or which of his

2005 473Hambrick, Finkelstein, and Mooney

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or her constituencies, is most important (Biddle,1979). We do, however, believe there is a signif-icant need and opportunity to examine the qual-itative job demands executives face.

Executive Job Demands

Although prior research on job demands hasimproved our understanding of this importantconstruct, its relevance for executives and theirwork has not been considered. We are aware ofonly one empirical inquiry that has examinedmanagers: Janssen’s (2001) study of low- andmid-level managers in a Dutch company, inwhich job demands were measured by means ofa survey (including items such as “Do you haveto work fast?”) and included dependent vari-ables, such as satisfaction and performance,that were among those customary in other stud-ies.

Distinct attention to executives is warrantednot because they deserve special considerationas human beings or because they necessarilyface greater demands than others but, rather,because of the advances in theory and knowl-edge that such a specific focus will yield. Thecontributions from studying job demands at theexecutive level will be significant in guiding ourunderstanding of strategic decision making andexecutive leadership, but they also may help inextending and refining the literature on job de-mands.

A focus on executives may help to open upnew thinking about the implications of job de-mands on task behaviors. To date, the literatureon job demands has focused on the individual’swell-being (including stress, anxiety, and healthconsequences; Karasek, 1979; Theorell &Karasek, 1996; Van Yperen & Snijders, 2000;Warr, 1990), attitude toward the job (e.g., satis-faction and commitment; Fox et al., 1993), andperformance (Gardner, 1986; Gardner & Cum-mings, 1988; Janssen, 2001). Conspicuously ab-sent has been much attention to task behaviors(except absenteeism and tardiness; Dwyer &Ganster, 1991). If we consider the well-docu-mented tendency for performance to deteriorateunder extremely high levels of job demands, thequestion arises as to how this deterioration isfirst manifested as actions. Do people with highjob demands become paralyzed by their heavyloads? Do they maintain their pace but simplymake a lot of mistakes? Do they become angry

and engage in witting or unwitting sabotage?Or does something else happen?

Obviously, the potential answers will vary fordifferent kinds of work. By focusing specificallyon top executives and drawing on some well-established constructs of strategic behavior, wehave an opportunity not only to improve ourexplanations of those strategic behaviors (asdiscussed earlier) but also to open a path forresearchers to consider, more broadly, the impli-cations of job demands on task behaviors forother categories of employees.

Additionally, distinct attention to job de-mands at the executive level is warranted be-cause executive work is qualitatively differentfrom work at other organizational levels—not inways that render existing literature on job de-mands immaterial but, rather, in ways thatcause that literature to be incomplete orstrained when applied to the executive level.For example, in prior research scholars haveconceived of job demands as arising primarilybecause of task design (Gardner, 1986; Gardner& Cummings, 1988) or job scope (Xie & Johns,1995)—a view that has only limited salience forthe typically unbounded responsibilities of topexecutive work. Similarly, in the literature onjob demands, researchers have largely omittedconsideration of the external environment as asource of job pressure, but executives are re-sponsible for scanning the environment and de-veloping adaptive responses to it (Miles & Snow,1978; Mintzerg, 1973), and we can anticipate thatsome environments are much easier to copewith than others.

Finally, specific attention to executives iswarranted because any effects of job demands—positive or negative—could have far-reachingimplications for the entire organization and itsconstituents. If job demands affect the nature ofstrategic decision making or the executive’sleadership behaviors, as we argue below, thenthe organization’s overall vitality and perfor-mance may be at stake, in ways that have yet tobe considered.

As noted above, we define executive job de-mands as the degree to which a given executiveexperiences his or her job as difficult or chal-lenging. Although our definition is similar toothers in the literature on job demands (e.g.,Ganster & Fusilier, 1989; Van Yperen & Snijders,2000), elements of it warrant elaboration.

474 JulyAcademy of Management Review

First, by referring to “a given executive,” weare indicating that the level of job demandsdepends, in part, on the degree to which theexecutive’s capabilities are appropriate for thesituation. Although top executives can bethought of as the winners in a series of rigorouscareer tournaments (Lazear & Rosen, 1981) and,hence, of uniformly exceptional talent, the real-ity is that executives vary widely in their abili-ties (Fama, 1980; Hubbard & Palia, 1995) and inthe suitability of their talents for the specificcontexts they face (summarized in Finkelstein &Hambrick, 1996). For instance, an executivecould have the qualities needed to manage asmall organization, but not a large one; a do-mestic business, but not a global business; or acost-oriented commodity business, but not animage-oriented luxury goods business. In a re-lated vein, an executive can start a positionwithout the requisite knowledge or skills butthen learn them along the way (Hambrick &Fukutomi, 1991). The opposite can happen aswell: an executive who is well-suited for a job atthe outset of his or her tenure may become ob-solete by new requirements that arise from tech-nology, customers, competition, or other factors.Understanding the “fit” between contextual con-ditions and managerial characteristics (Ed-wards & Cooper, 1990; Gupta, 1984; Gupta &Govindarajan, 1984) is essential to the concept ofexecutive job demands, because a given execu-tive will experience greater job demands to theextent that he or she is ill-suited for the job.

The second element of our definition that war-rants elaboration is that the executive must “ex-perience” his or her job as difficult or challeng-ing. Executive job demands may emanate fromobjective factors (discussed in the next section),but they must be felt or perceived in order toinfluence executive behavior (Dearborn & Si-mon, 1958; Mitroff, 1982; Wiersema & Bantel,1993). Although we have chosen to avoid thecomplexity of referring formally to “subjective”and “objective” executive job demands, our def-inition aligns with the former. We anticipatethat there will generally be a strong correlationbetween objective determinants of job demandsand the actual degree of challenge felt by exec-utives (as there is for other employees [e.g., Foxet al., 1993]), but the correspondence will not betotal, and we expect that felt, or experienced,demands will be far more predictive of the out-

comes we discuss later than will objective indi-cators of job conditions.

Finally, we need to explain our stipulationthat a demanding job is one that the executiveexperiences as “difficult or challenging.” Job dif-ficulty could be felt in various ways, includingthe amount of time the job requires, the degreeto which the job is always on the executive’smind, the degree to which the executive feelsill-equipped to do the job, and the degree towhich the executive believes that success at thejob will be hard to achieve. It is essential, how-ever, to conceive of the executive’s sense of chal-lenge as distinct from its possible outcomes,such as stress, strain, and anxiety (Karasek,1979; Xie & Johns, 1995).

In a related vein, we allow for the possibilitythat executive job demands can vary over time.There may be not only long-term changes (suchas when executive learning or obsolescencegradually occurs) but also short-term peaks andvalleys in job demands such that some periodsare more difficult than others. For example, anexecutive might be particularly taxed whileworking on acquiring another company, butonce the deal is completed, the executive willreturn to a more typical, lower level of job de-mands. We are not aware of any prior researchon job demands that has considered the possi-bility of time-varying demands; doing so, how-ever, opens up the opportunity to examine theimplications of, say, demand constancy, mo-mentary crises, and respites for job behaviorand performance.

Before proceeding, it is important to distin-guish executive job demands from related con-structs. First, the concept of executive job de-mands is not the same as executive stress. Asconceived in the psychology literature, job de-mands are a potential source or determinant ofstress (a “stressor”), along with such other deter-minants as family situation and financial secu-rity (Karasek, 1979; Perrewe, Ferris, Frink, & An-thony, 2000). But stress itself is a reaction—aconsequence of extreme job demands and otherfactors. Thus, stress may be a key mediator insome of the propositions we present below, butexecutive job demands are the precipitatingforce.

Second, executive job demands differ from theconcept of managerial discretion or latitude ofaction (Hambrick & Finkelstein, 1987). Althoughan executive who has a wide array of choices


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(hence, high discretion) can be thought of ashaving a demanding job, many other factorscontribute to determining job demands, as wediscuss. Moreover, not every discretion-enhanc-ing condition gives rise to increased job de-mands, and some actually reduce job difficulty.For example, as Hambrick and Finkelstein (1987)have discussed, a board that is beholden to theCEO will tend to confer discretion, but such aboard may also tend to impose minimal perfor-mance demands, thus reducing the demands onthe CEO.

The Determinants of Executive Job Demands

Executive job demands are determined bythree sets of factors. Two of these—task chal-lenges and performance challenges—are con-textual. The third set of factors resides withinthe executive—his or her performance aspira-tions. In the brief discussion that follows, wedefine and illustrate these three sets of determi-nants, without attempting to be exhaustive.

Task challenges. Some managerial situationsare more arduous than others. Task challeng-es—the conditions that make it difficult for anexecutive to attain a given level of perfor-mance—arise from the environment (notably, itsscarcity, complexity, and dynamism) and fromthe organization (its resource limitations andcomplexity).

Environments can be hostile or munificent(Dess & Beard, 1984). Industry conditions mightbe very harsh (say, with buyers who have sig-nificant power, intense rivalry among competi-tors, and low barriers to entry), or they may beinherently abundant (Porter, 1980; Williamson,1963). Beyond munificence, the complexity of anenvironment also affects an executive’s taskchallenges. Some environments consist of nu-merous variables and contingencies, imposingconsiderable information-processing demandson executives, whereas others are simple andhomogeneous (Aldrich, 1979). For example, anindustry composed of many direct and indirectcompetitors, in which the product is soldthrough a large number of channels to hetero-geneous customers and where technologychanges rapidly, is complex and poses consid-erable demands on the executive, compared to amore simple and homogeneous environment(Eisenhardt, 1989).

Similarly, environments vary widely in howmany decisions the executive is called on tomake (Hambrick & Finkelstein, 1987). Some en-vironments allow for (and warrant) frequentchoices on a wide array of fronts (e.g., productform, pricing, promotion, capacity decisions,and so on), whereas other environments allowmanagers few elements of choice—either be-cause choices are directly constrained or thereis an absence of means-ends ambiguity (i.e.,there is no difficulty in deciding). ParaphrasingHambrick and Finkelstein’s portrayal of an ex-treme, the chief executive of a regulated electricutility that has a long-term fuel contract, in atown with a stable population, has few majorthings to decide (1987: 372). Even though an ab-sence of discretion restricts the executive, itsvirtue is that it makes his or her job less de-manding.

Characteristics of the organization also deter-mine task challenges. Some organizations havefew resources and lack legitimacy (Stinch-combe, 1965); others are well established andhave abundant resources. Some have fragilemarket footholds; others hold well-fortified posi-tions, sometimes even with patent protection orother forms of monopolies (Porter, 1980). Someorganizations have relatively underdevelopedmanagerial cadres (Quinn, Anderson, & Finkel-stein, 1996), resistant or lethargic workforces,and primitive systems and procedures (Mint-zberg, 1979); others have an abundance of talentand well-established administrative infrastruc-tures that can greatly ease an executive’s tasks(Vancil, 1979). The complexity of the organiza-tion’s strategy and structure is also a source oftask challenges. For example, large firms withtechnologically interdependent units that aregeographically far-flung, with complex matrixstructures, require significant top-level coordi-nation and integration; organizations with lesscomplex arrangements are not as burdensometo manage (Henderson & Fredrickson, 1996; Van-cil, 1979).

Performance challenges. Executives differ inhow much performance is required of them—that is, in their performance challenges. Thesechallenges arise principally from the firm’sowners and directors, but they also can beshaped by other constituencies. An organizationcan be viewed as a coalition of stakeholders(Thompson, 1967), each of which must be in-duced to contribute its resources (Barnard, 1938;


March & Simon, 1958). If the inducements fallshort of what a stakeholder believes is appropri-ate and obtainable elsewhere, the stakeholderwithholds its contributions and the overall coali-tion is frayed. Sometimes stakeholders—includ-ing customers and employee groups—place greatperformance demands on companies and havethe power to enforce those demands, causing in-tense pressure for executives (Porter, 1980).

Managers may especially feel pressure to per-form from the company’s owners, but here, too,conditions can vary. If agency conditions areweak (Fama & Jensen, 1983) or there is an inef-ficient market for corporate control (Walsh &Seward, 1990), performance demands from own-ers will be muted.

Among modern, publicly traded corporations,in which ownership and management are sep-arate (Berle & Means, 1932), the board of direc-tors is a primary means of shareholder influenceon executives (Jensen & Meckling, 1976; William-son, 1964). Thus, the prescriptions offered byagency theorists and shareholder activists toimprove board vigilance—for example, increas-ing the number of outsiders on the board (Her-malin & Weisbach, 1991) who have a significantownership stake in the company (Morck, Shle-ifer, & Vishny, 1988) and who have not beenappointed by the CEO (Westphal & Zajac,1994)—should result in greater executive job de-mands. Executive job demands also will beheightened when shares are held by a few majorowners, rather than widely dispersed (McEach-ern, 1975). In short, the stronger the position ofowners relative to the executive, the greater theexecutive job demands.

The market for corporate control also greatlyaffects executive job demands. If the market forcorporate control is inefficient—say, if compa-nies are allowed to adopt antitakeover provi-sions, states pass antitakeover laws, and finan-cial institutions are unwilling to provide largeamounts of money for takeovers—then execu-tives simply have to deliver performance that is“in the ballpark” (Milgrom & Roberts, 1992). How-ever, if the market for corporate control is effi-cient, then performance demands are sharplyincreased (Denis & Kruse, 2000). Performancemust not just be reasonable but at least as highas all other possible owners believe they couldachieve if the firm’s resources were under theircontrol (Fama & Jensen, 1983). An efficient, ac-

tive market for corporate control will greatly in-crease executive job demands.

Finally, performance challenges will dependon the executive’s recent and current perfor-mance. An executive who has not been perform-ing well faces the risk of sanction or dismissal,in proportion to the severity and duration of hisor her shortfall (Boeker, 1992; Puffer & Weintrop,1991). Because there is a tendency to attributeperformance outcomes to executives, regardlessof whether their behaviors actually caused theoutcomes (Meindl, Ehrlich, & Dukerich, 1985), ex-ecutives whose units have been performingpoorly will face considerable pressure; con-versely, those whose units have been perform-ing well will be under less pressure, experienc-ing fewer job demands. These phenomena aremanifested in various ways, including the ten-dency for poorly performing executives to feel agreater need for strategic change (Hambrick,Geletkanycz, & Fredrickson, 1993). Conversely,executives who have recently overseen favor-able performance tend to succumb to the “fat catsyndrome” (Dutton & Duncan, 1987: 290) of self-satisfaction and complacency.

Executive aspirations. Although executivesare sometimes portrayed as uniformly highlymotivated to lead their organizations to loftyoutcomes (Donaldson & Lorsch, 1983), they actu-ally vary widely in their drive to perform—thatis, in their aspirations. Those who are stronglymotivated to enhance the performance of theirorganizations may place more demands onthemselves than contextual conditions alonepresent. Conversely, executives who are moti-vated only to maintain their organizations—tosatisfice, to perform merely credibly—will expe-rience only the bare demands presented by con-textual conditions (and may even selectively ig-nore or avoid those demands). This is anessential point, because it highlights that exec-utives partially determine their own job de-mands. Those executives who are driven toachieve high levels of performance may experi-ence great job demands, even if the other con-textual forces we have identified are minimal ormoderate.

Aspirations to deliver maximum organization-al performance could come from personality fac-tors—for example, need for achievement (Miller& Droge, 1986)— or internal locus of control(Miller, Kets de Vries, & Toulouse, 1982). It couldalso come from aging or tenure effects. Those


who are younger or earlier in their careers orjobs may have more to prove and feel underpressure to demonstrate their efficacy and toestablish reputation and a foothold (Hambrick &Fukutomi, 1991); those who have long tenuresand records of success may be more inclined tosatisfice and rest on their laurels.

Intense motivation to enhance company perfor-mance also could arise because of an alignmentof executive rewards with company perfor-mance, through use of stock options, perfor-mance-based pay plans, and executive stockownership (Alchian & Demsetz, 1972; Raviv,1985). To the extent that an executive is moti-vated by money (either for its purchasing poweror scorecard symbolism), tying his or her pay tocompany performance will induce a perfor-mance orientation and heighten self-imposedexecutive job demands (Fama & Jensen, 1983).

In summary, task challenges and performancechallenges constitute the context that contrib-utes to making executive work more (or less)difficult. The executive’s own aspirations canadd to (or subtract from) the overall degree of jobdemands. We now turn to the implications ofvarying levels of executive job demands on stra-tegic choices and leader behaviors.

CONSEQUENCES OF EXECUTIVE JOBDEMANDS

The degree of job difficulty an executive facesmay be an instrumental factor in improving ourunderstanding of a wide array of organizationalphenomena. Here we set forth several proposi-tions that address what we see as the mostcentral consequences of executive job demands,encompassing both strategic decision makingand leadership behaviors. We leave effects onthe executive himself or herself, such as stressor illness, outside our formal scope (but, again,stress may be an unspecified mediator in someof the relationships we propose).

Strategic Decision Making

The prevailing view among researchers whohave closely examined executive work is thattop managers generally are confronted withmore stimuli than they can attend to or ade-quately process (Kotter, 1982; Mintzberg, 1973).According to these theorists, executives are“boundedly rational,” striving to be deliberate

and comprehensive in their decision making butnot fully able to achieve that ideal (e.g., Cyert &March, 1963; Simon, 1945). The greater the jobdemands an executive experiences, the moreremote strategic rationality becomes. As job de-mands increase, executives will comprehend asmaller proportion of the stimuli that bear ontheir strategic situations. Under high job de-mands, executives have so much performancepressure, so many decisions to make, in the faceof so much information, they simply cannot af-ford—in terms of cognitive wherewithal, time, orother resources—to be comprehensive in theiranalyses or search for solutions (Eisenhardt,1989; Mintzberg, Raisinghani, & Theoret, 1976).

Importantly, it is not that executives facinghigh job demands purposely become less com-prehensive. The pressures of the job may actu-ally encourage them to try to be more compre-hensive, but they cannot achieve that ideal. Andthe greater the job demands, the more the exec-utives will fall short of the ideal. That is exactlywhat “boundedly rational” refers to—cognitivelimitations cause executives’ best efforts at ra-tional decision making to be incomplete (Cyert& March, 1963). It may even be counterproduc-tive to try to be comprehensive in the face ofoverwhelming job demands, since doing so maycause serious time delays (Fredrickson & Mitch-ell, 1984) and focus an executive on microscopicdetails, while the situation calls for his or herbest, but simplified, construal of the big picture.Thus, executives who are under great job de-mands take mental shortcuts and engage in lim-ited search to arrive at their choices.

Executives who face high job demands willeconomize in their strategic decision making byrelying on their experiences to search for andinterpret information, as well as to select amongoptions (Cyert & March, 1963; Hambrick & Ma-son, 1984). They will be drawn to what hasworked for them before, what they find familiaror comfortable, and what fits their cognitiveschema (Axelrod, 1976; Starbuck & Hedberg,1977). Accordingly, decisions made by execu-tives who are under significant job demandswill closely reflect their backgrounds (Mischel,1977)—their functional backgrounds (Kimberly &Evanisko, 1981), educational experiences(Wiersema & Bantel, 1992), and age and tenure(Finkelstein & Hambrick, 1990)—as well as theirpsychological dispositions (e.g., Miller & Droge,1986). In contrast, executives whose jobs are less


difficult will not encounter such informationoverload or extreme pressures.

Although we can assume that all executivesface at least some pressure to perform, thosewith lower job demands can take advantage ofgreater available time, attention, and other re-sources to be comprehensive in their analysesand search for solutions. Their decisions willhinge proportionately more on the characteris-tics of the objective decision environment, in-stead of largely reflecting idiosyncratic constru-als of their situations (Mischel, 1977).

Psychologists have long noted the tendencyfor subjects who are confronted with “weak sit-uations” to inject their personalized interpreta-tions into their decisions (Mischel, 1977). How-ever, the main ingredient of a weak situation, asconceptualized by psychologists, is ambiguity ofthe stimuli, not necessarily the sheer volume orpace of stimuli (Davis-Blake & Pfeffer, 1989). Butit can reasonably be expected that decisionmakers who are confronted with more informa-tion and more variables than they can handlewill draw on their personal stock of experiencesand biases in order to make sense of and sim-plify their difficult situations—just as they dowhen stimuli are ambiguous.

In a somewhat related vein, organizationaltheorists have found that executives’ experi-ences are reflected in their actions more underconditions of high discretion than low discretion(Finkelstein & Hambrick, 1990). But the causalargument proposed by these researchers is thathigh-discretion settings provide abundant op-portunity for managerial judgments to be exer-cised, rather than that high-discretion settingsare taxing and complex. To our knowledge, notheorists have directly proposed that the preex-isting schemas of executives will be manifestedin their choices in proportion to the job demandsthey face.

Indeed, it could be that researchers have en-countered inconsistent relationships betweenexecutive characteristics and strategic interpre-tations/choices because of failure to control forjob demands. For example, differences in jobdemands could account for the contrasting re-sults of two well-known studies of managerialinformation processing. Dearborn and Simon(1958) asked participants in an executive pro-gram to quickly read a ten-thousand-word caseand then indicate their interpretations of theproblems the company faced. The authors found

a considerable association between the execu-tives’ functional backgrounds and their interpre-tations of the case.

In contrast, Walsh (1986) asked managers todo a similar task, but based on reading only aone-thousand-word (three-page) case for twenty-five minutes. Walsh’s design would seem not tobe a condition of information overload in whichthe subjects needed to engage in cognitiveshortcuts, and, thus, it is not surprising thatWalsh observed none of the perceptual filteringthat Dearborn and Simon found. (It is worth not-ing that even Dearborn and Simon’s ten-thousand-word case greatly simplifies the infor-mational and task complexity faced by mostexecutives). We can more broadly anticipatethat executive job demands inhibit thorough-ness and deliberate weighing of stimuli, en-hancing the aptness of the bounded rationalityassumption.

Proposition 1: The greater an execu-tive’s job demands, the stronger theassociation will be between the exec-utive’s characteristics (demographicand psychological) and strategicchoices.

Another shortcut that executives who facehigh job demands will take is imitating others(DiMaggio & Powell, 1983; Haveman, 1993).Neoinstitutionalists have emphasized the role ofuncertainty in propelling mimetic isomorphism(DiMaggio & Powell, 1983; Mizruchi & Fein, 1999),without acknowledging that sheer decisioncomplexity and job demands may also play arole. For example, in their comprehensive re-view of the literature on mimetic isomorphism,Mizruchi and Fein reaffirm that the central logicof DiMaggio and Powell’s (1983) seminal piece—and the works that have followed it—is that“mimetic processes will tend to occur under con-ditions of uncertainty” (1999: 663).

We can expect, however, that pressured exec-utives who lack the capacity to conduct compre-hensive search and analysis will look to otherfirms—those that are geographically close (Ga-laskiewicz & Wasserman, 1989) or otherwisesimilar (Fligstein, 1985) to the focal firm, or thosethat are the most visible or admired (Haveman,1993)—for signals as to what might work fortheir own companies. Imitative action is eco-nomical, because it minimizes search and anal-ysis costs; moreover, it can be defended, since


other exemplar companies have given it legiti-macy. But the imitative action may or may not beefficacious for the focal firm, depending onwhether the firm’s situation is similar to the firmbeing copied (Haveman, 1993), as well aswhether the focal firm adequately understandshow to implement the more subtle elements ofthe initiative being imitated (Burns & Wholey,1993). Namely, shortcuts taken under pressuremay be economical as acts of decision making,but, to the extent that they ignore or discount theobjective and detailed realities the firm faces,they will not necessarily lead to the hoped-forresults.

It is useful to note that imitating others isoften a variation of acting on the basis of one’sown experiences. With imitation, the experiencemay be through firsthand involvement with an-other firm (e.g., Boeker, 1997); through vicariouslearning by means of weak ties, such as boardseats or officerships in trade associations(Davis, 1991; Geletkanycz & Hambrick, 1997); orthrough more detached observation (Haveman,1993). Except possibly for actions that result fromsystematic benchmarking of other firms, mostimitative actions are taken on the basis of a fewconvenient or familiar insights and, thus, repre-sent substantial departures from the compre-hensive decision-making process that is sup-posed to accompany strategic rationality. Thegreater the job demands on an executive, themore these simplified, stylized decision pro-cesses will be employed.

Proposition 2: The greater an execu-tive’s job demands, the greater thetendency will be to imitate the strate-gic actions of other firms.

When job demands become extremelyhigh—at the very upper range of the continu-um—an executive’s tendency to engage in sim-plified search, analysis, and decision makinggives way to outright decision desperation. Thetask is so complex and challenging, the stimuliso many and rich, and the performance stan-dards so great, the executive is essentially over-whelmed. Although he or she may not be facinga “threat” per se, the executive’s behaviors willresemble those of subjects under threat. Indeed,we would argue that the “threat-rigidity re-sponse” described by Staw, Sandelands, andDutton (1981) might more appropriately bethought of as an “extreme demands-rigidity re-

sponse,” with a threat constituting just one formof extreme demand.

In the face of extremely high job demands,executives are under substantial pressure toperform but are only able to comprehend andprocess a small proportion of the facts that bearon their situations. These executives can be ex-pected to experience stress (Xie & Johns, 1995),as well as the decision flaws that accompanystress, including habituated responses (Zajonc,1965), “wishful thinking” (Janis, 1958), “freezingup” (Glass, 1955), or, alternatively, “lashing out”with unusual or far-fetched behaviors (Bazer-man, 2002; Tversky & Kahneman, 1981). Theseextreme behaviors could include large-scale ac-quisitions, divestitures, reorganizations, down-sizing, aggressive accounting practices, andothers.

Hambrick and D’Aveni’s (1988) study of largecorporate bankruptcies helps to illustrate andspecify how extremely high job demands—oftenaccompanied by executive stress—may shapestrategic behaviors. The authors found that thebankrupt companies showed signs of financialweakness as early as ten years prior to failing.The troubled companies then started engagingin strategic extremism and vacillation, which,Hambrick and D’Aveni argued, were a result ofthe pressure their managers were under butwhich only served to worsen their situations.While a matched sample of healthy firmstended, on average, to engage in moderate lev-els of domain-change initiatives each year (add-ing and dropping stores, product lines, geo-graphic regions), the failing firms tended toengage in either no domain initiatives (freezingup) or a very large level of initiatives (lashingout) in a given year; moreover, they swung fromeach of these extreme profiles from one year tothe next, thus preventing the development ofany refined repertories or routines (Miles &Snow, 1978; Nelson & Winter, 1982).

An intriguing possibility is that the extremeactions taken by highly pressured executivesare often exaggerated versions of initiativesthat worked well for them in the past or of ac-tions they have seen other companies under-take. That is, extreme job demands cause exec-utives to take shortcuts in decision making butalso to be under so much pressure that they areunable to accurately assess the appropriatenessor scale of their actions.


John McCoy, the long-time CEO of BancOne,provides an example (Moore, 1999). McCoy builtBancOne by making a series of friendly acqui-sitions of small- and medium-size banks, whichhe allowed to retain a great deal of autonomy.Eventually, the company suffered from severeduplication of activities, since each subunit con-tinued to operate as a nearly independent en-tity. McCoy decided to centralize and standard-ize, in order to achieve economies of scale. Atthis point, however, the demands on McCoy hadgrown considerably: the company was far big-ger than it had ever been; the new philosophy ofcentralization created sizable coordination andrationalization tasks at his level, in contrast tothe company’s history of decentralization; and,of course, shareholders were unhappy about de-teriorating performance. After a year of strug-gling unsuccessfully with these extreme de-mands, McCoy reversed course and reverted toform: he made an acquisition. His acquisition ofFirst USA, however, was far larger than any hehad made in the past, and he paid a premium(5.5 times book value) well above any he hadpaid before. The company deteriorated evenmore. The acquisition of First USA seeminglyplayed to McCoy’s strengths, but the intensepressure he was under almost certainly compro-mised his ability to weigh the appropriatenessof this outsized action or to understand the re-quired subtleties of executing it.

Proposition 3: Executives who are underextremely great job demands will ex-hibit more extreme strategic behaviorsand more vacillation in their strategicbehaviors than executives who areunder low or moderate job demands.

Just as researchers have found that lower-level employees perform worse under very highjob demands than under moderate job demands(Janssen, 2001), so, too, do we expect inferiorperformance from executives who are under ex-tremely great demands. Because this basic rela-tionship is well established in the literature, wedo not present it as a formal proposition, but it isuseful to describe how it occurs at the executivelevel.

Executives who are under extremely high jobdemands have ample perception of urgency anddesire for performance improvement, but pres-sure is so intense—because of a combination ofstakeholder requirements, situational complex-

ity, and possibly limited resources—that deci-sion making is erratic and flawed (Staw et al.,1981). As discussed above, decisions are basedon a simplified and often erroneous understand-ing of the situation and appropriate alternatives(Hambrick & D’Aveni, 1988).

Research on the effects of stress and anxietyon individual performance has shown that highlevels of stress cause biased information acqui-sition and cognitive processing, diminishedproblem-solving ability, and increased confor-mity pressures (summarized in Staw et al., 1981).When these tendencies are coupled with thedecisional by-products of intense job de-mands—including paralysis on the one handand aggressive, costly initiatives on the other,as well as vacillation between these two poles(Hambrick & D’Aveni, 1988; Staw et al., 1981)—wecan expect that extremely high job demandsand accompanying intense pressure will causepoor performance.

The harmful effects of very high levels of jobdemands occur even if an executive is moti-vated to perform well. We emphasize this be-cause a naive model of human behavior mightpurport that executive performance simply de-pends on a high level of directed motivation(Jensen & Meckling, 1976), without recognizingthat motivation will not surmount the burden ofextreme task demands. With such a view,agency theorists sometimes encourage the useof very high debt levels, as a way to put execu-tives in a crucible that requires extraordinaryeffort and performance in order to avoid bank-ruptcy (Jensen, 1989). We know of no researchthat has examined the actual consequences ofsuch a prescription, but we can conjecture that itwas proposed with an incomplete understand-ing of the effects of pressure on human perfor-mance and that it may not lead to generallysalutary results.

Executives who face high job demands, how-ever, will not always perform poorly. Sometimes(by luck, instinct, or skill) they will perform well,which leads us to one more proposition aboutstrategic behavior. When success occurs forhighly pressured executives, they will becomesupremely confident. External ratification ofsuccess, such as from media attention or ele-vated profiles in the community, might reinforcethis effect, but we would expect the executive’sown self-attribution of success to be the drivingforce in boosting self-confidence.


Researchers have long been interested in de-cision biases associated with overconfidence ornaive optimism (e.g., Dutton, 1993; Dutton & Dun-can, 1987; summarized in Bazerman, 2002). Inrecent publications, researchers have exploredthe influence of “executive hubris”—exagger-ated self-confidence—on the size of premiumspaid for corporate acquisitions (Hayward &Hambrick, 1997) and the role of overconfidencein executives’ decisions to hold, rather than ex-ercise, their stock options even after the optionsare well “in the money” (Malmendier & Tate, inpress). A common premise in this work is thatdecision makers who perform well become moreconfident, often to the point of becoming over-confident.

What has not been considered is that decisionmakers who have met with success under con-ditions of high job demands will feel even moreconfident than those who have succeeded undereasier conditions. To the extent that decisionmakers or executives are aware of the level ofjob difficulty they have confronted, we can ex-pect that those who have performed well underthe most arduous conditions will feel extremelyconfident, and this confidence will be reflectedin their next round of decisions (leading tolarge-scale, risky actions, such as big or high-priced acquisitions and large capital expendi-tures). That is, executives who have succeededagainst what they see as extreme adversity ordifficult conditions will develop a sense of in-vincibility.

Proposition 4: There is an interactiveeffect between executive job demandsand performance on subsequent exec-utive self-confidence and risk taking.Specifically, executives who have per-formed well under high job demandswill become more self-confident thanthose executives who have performedwell under low or moderate demands.In turn, they will engage in riskierstrategic behaviors.

Leadership Behaviors

In addition to affecting strategic decisionmaking, job demands can be expected to influ-ence an executive’s leadership behaviors. Herewe examine two such possibilities: (1) the ten-dency for executives to impose demands on

their subordinates in proportion to the demandsthey themselves face and (2) the tendency forexecutives to convey the impression that theyare pressured when they really are not and,conversely, to convey the impression that theyare not pressured when they really are.

It is an axiom of organizational life that hier-archical superiors assign work and set perfor-mance expectations for subordinates (Mintz-berg, 1973). Obviously, the more work thesuperior has, the more work he or she passes onto others. Executives who experience high jobdemands will impose more demands on theirorganizations than will executives who experi-ence lower job demands. To a great extent, theincreased pressures on the organization will bein the form of requirements for more work—moresales, faster production, quicker collections ofreceivables, and so on. But executives’ own in-tense pressures might also be manifested inbullying or threatening those who cannot han-dle the load. A survey of employees in Britishcompanies showed that managers were the per-petrators of 75 percent of all reported instancesof bullying (Hoel & Cooper, 2000). Although someof these managers may have lacked basic su-pervisory skills, the authors surmised that manyof them were responding to intense pressuresimposed from above—a cascade that started atthe top. When subordinates are bullied or other-wise negatively supervised, they develop stress(e.g., Balshem, 1988), symptoms of depression(Repetti, 1993), and negative attitudes towardtheir superior, all of which tend to lead to be-haviors that will exacerbate the pressure felt bytheir superior (Hoel & Cooper, 2000)—in a viciouscircle.

Although Cooper and associates have dis-cussed how forces such as technological pace,global competition, and delayering have in-creased the pressures on employees in recentdecades (e.g., Schabracq & Cooper, 2000; Coo-per, 1998), they have not pointedly consideredthe possibility that top executives are the medi-ators in these causal relationships. In order toadvance theory and prescriptions about stress-ful organizational climates, it may be essentialto comprehend that top executives serve a linch-pin function, conveying the pressures they expe-rience from the task environment onto the rest ofthe organization.


Proposition 5: The greater an execu-tive’s job demands, the greater thepressures placed on others in the or-ganization will be.

Job difficulty also may greatly affect an exec-utive’s management of impressions, in waysthat have not been considered. For decadesnow, researchers have explored the importanceof impression management. For example, re-searchers have recently examined impressionmanagement in job interviews (e.g., Ellis, West,Ryan, & DeShon, 2002; McFarland, Ryan, & Kriska,2003), in employee performance evaluations andassessments (Bolino & Turnley, 2003a; Vasilopou-los, Reilly, & Leaman, 2000), and among malesversus females (Bolino & Turnley, 2003b; Singh,Kumra, & Vinnicombe, 2002). Although the bodyof research on impression management is vast,we do not know of any studies linking job de-mands and impression management.

Moreover, there are very few studies that haveexplored the impression management practicesof executives. Exceptions include research onexecutives’ attempts to deflect blame for poorperformance (Bettman & Weitz, 1983; Bowman,1976), as well as on executives’ attempts to cre-ate the appearance that corrections for poor per-formance are underway (Elsbach & Sutton, 1992).Little attention has been paid to the need forexecutives to enhance the impression that theyare experiencing a level of job demands otherthan what is actually the case.

The challenge for an executive who faces lim-ited job demands is to enjoy the benefits of his orher position without appearing to be shirking.Although constituencies are willing to concedethat executives need personal time, as well astime for recreation and replenishment, they alsoexpect executives to work diligently on the or-ganization’s behalf and to set a model of dili-gence for others in the organization (Pfeffer,1981). Thus, executives who face minimal de-mands must create the impression that they arebusier on the organization’s behalf than theyactually are.

To give the impression of robust activity, un-pressured executives may go on widely an-nounced trips to distant operations, commissionreports and hire consultants to produce “whitepapers,” and encourage press coverage of vari-

ous initiatives to send signals to key stakehold-ers about the intensity of their efforts. Similarly,executives who face minimal job demands mayparticularly try to emphasize how their variousoutside activities are valuable for their firms,reporting energetically on what they havelearned through their outside board seats, phil-anthropic endeavors, and so on—all to enhancethe impression that these activities are worth-while.

Unpressured executives also may go tolengths to be discreet about time spent on lei-sure activities. Whereas an executive who is ina highly demanding situation, where stakehold-ers recognize the extreme challenges he or shefaces, can openly discuss leisure activities (eventime-consuming ones), the executive who is in aposition that is seen as not very challengingmust be more discreet about the use of personaltime. So, Larry Ellison, CEO of Oracle—whoprobably is seen as facing a great deal of jobpressure due to the competitiveness and pace ofhis industry—can publicize his extended, flam-boyant trips as a way to reinforce his risk-takingimage (as well as to demonstrate that he is notoverly pressured by his job). But the CEO of aregulated, stable public utility may need to hideoccasional extended weekend getaways.

Proposition 6: The lower an executive’sjob demands, the greater his or her at-tention will be to enhancing the impres-sion of having high job demands.

Members of an organization seek assurancesthat their leaders are in full possession of theirfaculties (Barnard, 1938; Bass, 1990, especiallyChapters 6, 7, & 12; Keegan, 1987). Accordingly,executives are socialized as to the importance ofconveying calm and thoughtfulness, no matterhow much pressure they may be feeling (Eccles& Nohria, 1992). The greater the pressure, themore intently executives must focus on convey-ing calm. At the extreme, executives who are inthe midst of, or on the verge of, catastrophe mustgo to lengths to appear reassuring and confi-dent. We saw an instance of this during thelead-up to America’s war in Iraq. With everyindication that President George W. Bush wasonly days away from launching all-out war,each day’s newscasts brought more footage ofIraq’s President Saddam Hussein smilingcalmly and gently waving his cigar.


Proposition 7: The greater an execu-tive’s job demands, the greater the ex-ecutive’s attention will be to convey-ing confidence and calm.

What this means is that executive job de-mands cannot reliably be discerned by observ-ing the superficial demeanor or behaviors ofexecutives. Those who appear the most frenziedmay be masking the relative ease of their jobs,while those who seem the most calm and mea-sured may be going to great lengths to hide theintense pressures they are feeling. This poses achallenge for a firm’s stakeholders, who mightbe concerned about executive shirking on theone hand and executive overload on the other.Rather than relying on the executive to visiblyshow how challenged he or she feels, observersmay benefit instead from focusing on some ofthe leading indicators of the consequences wehave proposed (such as extreme and vacillatingstrategic behaviors) or on assessing the deter-minants of executive job demands we enumer-ated earlier (such as environmental scarcity andorganizational complexity).

FUTURE RESEARCH DIRECTIONS

The formal propositions we have presentedare all testable and represent some of the mostpromising future inquiries on the topic of exec-utive job demands. However, the concept of ex-ecutive job demands has the potential to con-tribute substantially to our understanding of awide array of organizational phenomena. In thissection we identify a limited set of additionalresearch opportunities.

Measurement and Methods

Before turning to these substantive researchideas, it is useful to briefly address major meth-odological alternatives for studying executivejob demands. Because job demands must be ex-perienced or perceived, we expect the mostpromising approach to measurement will be viasurvey instrument. Organizational behavior re-searchers who have examined job demandshave taken this tack, commonly using an eight-item index that Van Veldhoven and Meijman(1994) developed and validated (Janssen, 2000,2001). Examples of items include “Do you workunder time pressure?” and “Do you have prob-

lems with the workload?” Although these itemswould need to be adapted for executive-levelrespondents, we anticipate that such a batterycould generate valid and reliable responses. Aswe have posited, executives may mask their de-gree of job demands in their work behaviors, butthey may be candid about them in a private,anonymous questionnaire—as researchers havefound in asking executives about other sensitiveissues (Gupta & Govindarajan, 1984; Westphal,1999).

We also suggest that researchers exploreways to assess executive job demands directly,perhaps by interviews or in-depth observation.It has been more than two decades since schol-ars have undertaken an in-depth clinical anal-yses of how executives spend their time andbehave on the job (Kotter, 1982; Mintzberg, 1973).Not only would such investigations shed lighton how executive priorities might have changedin recent decades, but it might also allow infer-ences about the extent of executive job demandsfor different executives, as well as about thetemporal dynamics of executive job demands (ifa longitudinal study were conducted). A relatedapproach would be to examine documentationof time allocation by executives. For example,researchers might ask executives to keep a logof their activities or to share their calendars,which might provide useful data from which toassess job demands.

Laboratory experiments may also be usefulfor advancing our understanding of executivejob demands. For example, subjects (executiveprogram participants) could be placed in simu-lated high-job-demands and low-job-demandsconditions and then observed for how theyspend their time, how they notice and react tostimuli, how they make decisions, how they in-teract with teammates, and so on. More complexexperiments could also test for how managerialaspiration levels interact with contextualsources of job demands to affect behavior. Inci-dentally, we also expect that these alternativesto survey measurement (e.g., laboratory experi-ments, interviews, in-depth observation) mightbe promising for studying job demands at thenonexecutive level.

Ideas for Building and Extending Theory

The construct of executive job demands couldbe helpful for refining and extending numerous


theoretical perspectives. We highlight just foursuch possibilities here.

First and most notably, the concept of execu-tive job demands might advance agency theory(Fama & Jensen, 1983). Agency theorists com-monly call for mechanisms that will keep exec-utives intently focused on shareholder wealthmaximization, including close monitoring by theboard, prompt dismissal for poor performance,compensation contracts that hold a heavy con-tingent-pay element, and an efficient market forcorporate control that easily allows takeovers ofpoor performers (Alchian & Demsetz, 1972; Holm-strom & Milgrom, 1990). Although these prescrip-tions may be sensible at a distance, when theireffects on executive job demands are factoredin, it becomes easier to understand why someexecutives operating under such regimes en-gage in erratic strategic choices, impressionmanagement, and even illegalities—none ofwhich serve shareholders well. One of the rea-sons agency theorists’ prescriptions often fail todeliver their hoped-for results is that they mayinvolve pumping up the pressure on executivesto levels that are counterproductive. If firms arebetter off when executive job demands are mod-erate, as we argue, then there are significantimplications for executive compensation, boardvigilance, corporate financing, and otheragency levers. Of course, the challenge remainsto figure out what constitutes a moderate ormoderately high level of executive job demands,as well as how to engineer agency conditions tokeep the job in that range. However, our theoret-ical formulation provides a basis for approach-ing these challenges.

Thus, an understanding of job demands mightoffer important prescriptions for developing ex-ecutive compensation plans. Researchers whohave examined the determinants of executivecompensation have so far resorted to piecemealconceptions of job challenge or difficulty, suchas company size (Ciscel & Carroll, 1980), infor-mation-processing demands (Henderson &Fredrickson, 1996), or pressure to perform(Gomez-Mejia, Tosi, & Hinkin, 1987). We believeexecutive job demands could be an importantoverarching construct in such future research.

Second, executive job demands may lead tonew insights for researchers of top managementteams (TMTs). For example, executive job de-mands may be an instrumental factor in affect-ing such TMT dynamics as social cohesion

(Glick, Miller, & Huber, 1993) and political be-havior (Eisenhardt & Bourgeois, 1988; Pettigrew,1992). Researchers could examine the conse-quences of asymmetric job demands withinTMTs, where some members of the team haveextremely high job demands while others havemuch less.

Third, if executive job demands have the im-plications we have proposed, it would be valu-able to consider how executives might attemptto reduce their demands. Perhaps the most com-mon approach is to delegate. For example, aCEO experencing an intense load may appointa COO or otherwise strengthen the TMT by cre-ating new positions or replacing members withmore capable individuals. To alleviate job de-mands, executives might also try to improvetheir own capabilities by seeking opportunitiesfor education and development. Executives ex-periencing extremely high job demands mightavoid initiatives (possibly even those that aredesirable for firm performance) that stretchthem thinner, or they might try to alleviate jobdemands by actively reducing the scale or com-plexity of the firm (say, by selling some units).

Finally, it would also be beneficial to considerthe role that executive job demands play in ex-ecutive stress, health, and career choices, in-cluding voluntary departures. To be effective,this research should be multidisciplinary, pos-sibly drawing on expertise in the topics of exec-utive roles, psychology, and physiology.

Additional Suggestions

We encourage researchers to examine the ef-fects of different sources of executive job de-mands. For example, an executive who feelsgreatly burdened by task challenges (environ-mental scarcity, information overload, etc.) maybehave differently than an executive who feelspressured primarily by performance challenges(owners’ demands, takeover raids, etc.). Simi-larly, an executive who imposes more pressureon himself or herself (through personal aspira-tions) than the context itself warrants may be-have differently than an executive whose jobdemands stem primarily from a difficult taskcontext.

In a related vein, it could be very informativeto explore the congruence between objective in-dicators of executive job demands and execu-tives’ perceptions of job difficulty. What causes


some executives to perceive their jobs as more(or less) difficult than the objective factors wouldsuggest? Even more important, what are the im-plications of misalignment between objectiveand perceived executive job demands?

Last, we encourage researchers to explore thedynamic nature of executive job demands. Inthis vein, we expect our propositions to havedynamic counterparts, in which changes in ex-ecutive job demands will be associated withchanges in the proposed consequences. Addi-tionally, there may be consequences that arisewhen executive job demands abruptly changefrom being extremely low to extremely high, orvice versa.

BROADER IMPLICATIONS AND SUMMARY

As discussed earlier, executive job demandsemanate from task challenges, performancechallenges, and executive aspirations. Althoughthese forces can vary widely from firm to firmand from executive to executive, it is also pos-sible that macro or system-wide factors cancause entire populations of executives to expe-rience simultaneous increases (or decreases) intheir job demands. In our assessment, the recentera in corporate America (particularly the 1990s)is a case of an across-the-board increase in ex-ecutive job demands.

Numerous observers have commented on theincreased dynamism or rate of change in thebusiness environment in the period leading upto and including the 1990s. Researchers haveobserved an increased pace of competitive dy-namics (D’Aveni, 1994), increased technologicaldynamism (Christensen, 1997), shorter productlife cycles (Bonney, Ratchev, & Moualek, 2003),greater geopolitical integration (Trent & Monczka,2002), and an overall increase in the “velocity” ofthe business environment (Eisenhardt, 1989).

At the same time, executives (of public corpo-rations, at least) were put under increased pres-sure to perform. First came the takeover wave ofthe late 1980s, in which profitable companies,such as Gillette and Disney, were targeted byraiders who thought that these companies couldbe even more profitable in their hands (Ward,1997). The message to corporate executives wasclear: “You may no longer satisfice; you mustmaximize. If you don’t, we will.” Additionally,institutional shareholders held larger shares ofmajor companies (Useem, 1996), and these pow-

erful investors exerted more pressure for finan-cial performance—cajoling managers, puttingcompanies on public “watch lists,” and some-times selling shares (Useem, 1996). In turn, exec-utives became more vulnerable to dismissal.This trend first became apparent when thirteenCEOs of Fortune 500 companies were fired in theshort span of April 1992 through August 1993(Ward, 1997). By one account, CEO dismissalrates trebled between 1980 and 1999 (Charan &Colvin, 1999).

Executives in the 1990s were not only underunprecedented risk of dismissal for poor perfor-mance but also were given substantial incen-tives to achieve good performance. Followingdirectly from the prescriptions of agency theo-rists, executives were given large—in somecases, very large—grants of stock or stock op-tions, in order to align their interests with thoseof stockholders. According to an exhaustiveanalysis by Hall and Liebman (1998), equity-based incentives (stock and option grants) ac-counted for 8 percent of the median CEO’s pay in1990 (in major U.S. corporations); by 1998, it hadrisen to 58 percent. It is essential to note thatthese figures are based on ex ante, not ex post,valuations. In order for these equity instrumentsto be valuable to the CEO, the stock priceneeded to climb.

CEOs at Mattel, Bristol-Myers Squibb, and K-Mart, as well as highly visible cases at Enron,Tyco, Worldcom, and Adelphia, were all widelycriticized in the period 2000–2002 for aggressive,even ethically dubious, acts. Some observerswould attribute their actions to hubris (Hayward& Hambrick, 1997) or to greed (Stewart, 2003), butin our estimation, extremely intense job de-mands also may have played a major role. Ex-ecutives in the 1990s faced prodigious task chal-lenges and performance challenges, and theywere given incentives in a way that sent their ownperformance aspirations to supreme heights.

We do not wish to be seen as apologists forthe recent mistakes of executives. America’s cor-porate leaders were fully responsible for theiractions. Nor are we saying that executivesshould necessarily be spared any pressure. Asthe old adage goes, “If you can’t stand the heat,get out of the kitchen.” We are simply proposingthat the heat in the kitchen—executive job de-mands—is an instrumental factor in shaping ex-ecutive behavior, which so far has gone unac-knowledged. Sometimes macro conditions


cause the heat to be turned up for a large num-ber of executives, contributing to what will seeman epidemic of the various consequences of ex-tremely high executive job demands that wehave proposed, including strategic extremismand vacillation, strategic errors, pressuring therest of the organization, managing the impres-sion that everything is fine, and, ultimately, poorperformance.

The concept of executive job demands is po-tentially important for enhancing our under-standing of a wide array of upper echelons andorganizational phenomena. We particularlyview executive job demands as a fruitful arenafor discourse and collaboration between schol-ars who emphasize individual-level issues(those in organizational behavior and psychol-ogy) and researchers whose interests are inoverall organizations (organizational and strat-egy theorists). Our paper lays a foundation forfuture inquiry by identifying and defining theconcepts of executive job demands, specifyingtheir major classes of determinants, and propos-ing some major implications for executive be-havior and organizational outcomes.

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Donald C. Hambrick is the Smeal Chaired Professor of Management, Smeal College ofBusiness, at The Pennsylvania State University. He is also the Samuel BronfmanProfessor Emeritus of Columbia University’s Graduate School of Business. He receivedhis Ph.D. from Penn State and his M.B.A. from Harvard University. His research focusesprimarily on top executives and their effects on strategy and performance.

Sydney Finkelstein is the Steven Roth Professor of Management at the Tuck School ofBusiness, Dartmouth College. He received his Ph.D. in strategic management fromColumbia University. He studies top management teams, mergers and acquisitions,and individual and organizational learning from corporate mistakes.

Ann C. Mooney is an assistant professor at the Wesley J. Howe School of TechnologyManagement at Stevens Institute of Technology. She received her Ph.D. in strategicmanagement and M.B.A. from The University of Georgia. Her research interests in-clude top management teams and strategic decision making.


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EXECUTIVE JOB DEMANDS: NEW INSIGHTS FOR ......As noted above, we define executive job de-mands as the degree to which a given executive experiences his or her job as difficult or chal-lenging