Effect of a company's management on its financial performance

Abstract

The purpose of this study is to explore the possible relationship between the management styles or practices of top management and organizational performance. It examines Return on Equity (ROE) and Return on Stock (ROS) of the top two-hundred Canadian companies in market capitalization on the Toronto Stock Exchange (TSX) each year in the past six years by using the data from Canadian Business magazine and relates these performance measures to the practices of the companies’ top management. The finding shows that these ‘great’ companies views building the qualified team as the priority strategy, and they all appreciate and compensate for employees’ hard work and performance. Finally, according to the analysis and findings, an organization’s top management will influence a firm’s long-term performance.