Abstract
Top management team (TMT) heterogeneity research has not yet clearly revealed whether surface-level diversity (i.e., national culture, gender, age) contributes to or detracts from a firm’s financial performance and has not focused on how strategic change frequency (number international diversification or refocusing activities) serves as an intervening mechanism. Based on a sample of 1,993 firms between 2003 and 2015, we examine the mediating role of strategic change frequency in the relationship between surface-level diversity and long-term firm performance. Grounded in the upper echelons perspective, we find that TMT surface-level diversity increases rather than decreases strategic change frequency. Furthermore, our results are consistent with our hypothesized positive relationship between strategic change frequency and long-term firm performance. More important, we also find support for a longitudinal-based mediation model in which strategic change frequency in terms of diversification/refocusing actions (Time 2) transmits the positive effect of TMT surface-level diversity (Time 1) to long-term financial performance (Time 3) without accounting for any moderated conditions suggesting that mediation models warrant more utilization in the upper echelons research and internationalization research domains. Implications for the upper echelons theory in a more global world as if relates to the often unexplored surface-level diversity are offered.
Original language | English |
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Pages (from-to) | 304-318 |
Number of pages | 15 |
Journal | Journal of Leadership and Organizational Studies |
Volume | 26 |
Issue number | 3 |
Early online date | 17 May 2019 |
DOIs | |
Publication status | Published - 31 Aug 2019 |
Bibliographical note
FundingThe author(s) received no financial support for the research, authorship, and/or publication of this article.
Keywords
- age diversity
- gender diversity
- generational differences international diversification
- mediated models
- national culture diversity
- strategic change
- top management team heterogeneity
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Jie Wu
- Business School, Africa-Asia Centre for Sustainability (AACS)
- Business School, Business Management - Chair in Strategy and Entrepreneurship
Person: Academic