Centers of Gravity: The Effect of Shared Leadership and Stability in Top Management Teams on Firm Growth and Industry Evolution

We study the processes of firm growth in the evolution of the Japanese cotton spinning industry in the late 19th-early 20th century, the first episode of successful industrialization outside of Western Europe and the United Sates. By integrating strategy and historical approaches and utilizing rich quantitative firm-level data and detailed business histories, we examine the effect of top management teams’ (TMT) shared and stable leadership in the emergence of “centers of gravity” for output and talent in the industry. Shared and stable TMT leadership enabled long term expansion, innovative product choices, and the accumulation of talent and physical assets. Additionally, a focus on value creation, in conjunction with talent recruitment and promotion enabled TMTs to weather discord related disruptions.