Top Management Team and Firm Performance: Evidence from Oman

Prior literature suggests that diverse attributes of leaders are a source of better decision-making that translate into better performance by the company. However, previous literature also indicates that due to different job-related pressures, individuals' ability to make an optimal decision may be hampered, affecting the company's overall performance. In many countries, workforce localization is advocated by pressure groups, and regulators are promoting such strategies to hire more workforce from the indigenous nation. Sultanate of Oman also facilitates the process of Omanization, which encourages companies to engage local staff for work-related affairs. Company leadership takes the strategic and vital decisions for the company, and it has short and long-term effects on the firm performance. In this study, we try to empirically investigate how CEOs from other nationalities impact the performance of the companies in the context of Oman. To conduct this study, we gathered data from non-financial companies registered in Muscat Securities Market (MSM) from 2010 to 2020. The study results indicate that companies with CEOs from other nationalities perform below par. The possible reasons for this relationship are that job security pressure may have hampered the performance of the individuals and their decision-making is affected. We conclude that psychological pressure on individuals may negatively impact their decision-making ability. This study has educational and regulatory implications for the future; better regulations are crucial to getting better results from diverse individuals.