The upper echelons theory (Hambrick & Mason, 1984) suggests that top executives’ characteristics and experiences shape their strategic decisions and firm outcomes. While widely adopted, this perspective has faced criticism for its methodological limitations, particularly regarding the congruence of demographic and psychological constructs. Therefore, this study aims to examine whether executives’ demographic characteristics are valid and reliable proxies for their psychological traits. Using a sample of CEOs from German small and medium-sized enterprises in the manufacturing industry, the study will compare two models for predicting CEOs strategic choices: one based on the most frequently used demographic measures in the literature, and another on two central psychological measures, values and personality traits. If demographic proxies reliably predict strategic decisions, they should validate a core assumption of the upper echelons theory; if not, the findings would challenge the literature to reassess its reliance on proxies. By addressing the “black box of organizational demography,” (Lawrence, 1997) this study seeks to clarify the role and limitations of proxies in strategic management research and to enhance the theoretical foundations of the upper echelons theory.
