Abstract
This study examines whether top management team (TMT) internationalization is positively related to firm innovativeness. Besides focusing on the accumulation of top managers' international knowledge and capabilities, we explore the influence of moderators reflecting temporal concerns at three levels: CEO age, TMT tenure, and firm age. Combining upper echelons theory with innovation literature and using a sample of large stock‐listed German firms, we demonstrate that TMT internationalization can increase firm innovativeness. This relationship is context‐dependent on the age of the CEO. Overall, this paper sheds light on the antecedents of firm innovativeness and the consequences of increasingly international TMTs.
Highlights
The management of firms with international exposure confronts top management teams (TMTs)1 with growing complexity and requires an understanding of both domestic and global demands (Luo, 2005)
Combining upper echelons theory with innovation literature, we argue that TMTs with international exposure are associated with a raised level of innovativeness at their corresponding firms
Our argumentation regarding the impact of TMT internationalization on firm innovativeness is developed by relying on three key arguments. (a) First, we suggest that international top managers have a broader perspective on a firm's business context due to the knowledge and experiences they collected in different geographical and cultural contexts, which expands the boundaries of imagination and thereby fuels innovativeness. (b) Second, we posit that international top managers are more risk-seeking and more open to change and novelties. (c) And third, we argue that the global network international top managers maintain grants access to novel ideas and creative collaborations that are useful for innovativeness
Summary
The management of firms with international exposure confronts top management teams (TMTs) with growing complexity and requires an understanding of both domestic and global demands (Luo, 2005). In this regard, internationally seasoned top managers are considered to be qualified to cope with the posed challenges (Nielsen & Nielsen, 2011). According to Lumpkin and Dess (1996), firm innovativeness can be defined as “a firm's tendency to engage in and support new ideas, novelty, experimentation, and creative processes that may result in new products, services, or technological processes” (p.142) This engagement and support is initially dependent on the TMT, which sets the strategic direction of the firm (Talke, Salomo, & Rost, 2010) and may eventually become visible in the form of resources devoted to innovation initiatives (e.g., research and development [R&D]). Due to the acting competitive forces and changing conditions engendered by the internationalization of firms and TMTs, a solid understanding of the drivers of innovativeness and ways to enhance it are of strategic importance for firms
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