How do top management team characteristics affect digital orientation? Exploring the internal driving forces of firm digitalization

Abstract

The top management team (TMT) plays a key role in the process of the firm digital transformation. However, few studies have focused on the impact of TMT characteristics on the digital orientation of firms. In this paper, we simultaneously explore the impact of the dispersion, aggregation, and background characteristics of TMT on the digital orientation of firms. Based on the upper echelons theory and strategic orientation theory, we propose that the diversity and average education level of TMT positively impact firms' digital orientation. The average age and tenure of TMT have a negative impact on the digital orientation of firms. The overseas and financial backgrounds of TMT members have a positive impact on the digital orientation of firms. Our hypothesis was tested using large-scale longitudinal data and computer-aided text analysis methods from Chinese listed companies. This paper provides useful supplements to early research on digital driving factors and digital orientation in emerging economies, and also provides more universal suggestions for digital practices in firms.