Abstract
While knowledge diversity among a firm’s inventors fosters potential for innovation, it also implies the attendant need for its coordination by a firm’s Top Management Team (TMT). To address this issue, the purpose of this study is to investigate how three TMT structural attributes, namely its administrative intensity, hierarchical structure, and functional structure, shape such a coordination ability and how this moderates the relationship between a firm’s knowledge diversity and innovation. Based on a unique microlevel and longitudinal dataset that includes 118 pharmaceutical firms, 2,720 top managers, and their 33,293 inventors and that covers the 2000–2014 period, we argue and show that the positive relation between knowledge diversity and innovation weakens with administrative intensity yet strengthens with a functional structure. This provides evidence in favor of a dual role for a TMT when coordinating knowledge diversity—one that entails a “hands-off” approach in the first phase of opportunity identification and a more “hands-on” approach in the second phase of opportunity execution. Implications for different bodies of literature and managers are discussed.
Published Version
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