Inclusiveness in the Top Management Team: Facilitation or Obstruction to Enterprise Performance?

Abstract

In recent years, with the deepening of Chinese enterprises’ participation in the global value chain, their top management teams pay more and more attention to improving their own diversification level. The number of executives with foreign nationalities and overseas study experiences in the top management team of listed companies is increasing. This is not only related to the pressure of institutional legitimacy faced by Chinese enterprises entering other countries, but also an important way for enterprises to obtain diversified knowledge and experience of other countries. Inclusiveness in the top management team is a follow-up study based on the diversity and heterogeneity of top management team composition, which provides a deeper explanation for the internal mechanism of strategic decision-making and formulation of diversified teams. However, heterogeneity is still the dimension of considering the characteristics of the top management team, and it does not involve the psychological or cultural categories such as team atmosphere, which is an important defect for the Chinese situation that emphasizes Confucian culture. Therefore, in the context of western scholars trying to expand the research of diversity management by introducing inclusiveness, Chinese scholars are also actively introducing inclusiveness into the field of organizational research. Most of the existing studies use methods such as questionnaire survey, which restricts the research on the samples of the top management team of listed companies. By constructing a variable that can reflect the inclusiveness in the top management team, this paper uses the second-hand data based on the annual reports of listed companies to measure the level of inclusiveness in the top management team, which provides a useful exploration for the research of inclusiveness in the top management team of listed companies, and finds the nonlinear influence（U-shaped relationship）of inclusiveness in the top management team on organizational performance, which means that there is a so-called “inclusiveness trap” in the top management team. Only when the top management team continues to increase the degree of inclusiveness and cross the trap, can it promote enterprise performance to rise. This paper expands the understanding of the relationship between inclusiveness in the top management team and organizational performance, and analyzes the two possible mechanisms of this phenomenon, so as to deepen the practical significance of relevant research. It also suggests that Chinese enterprises in the process of internationalization should strengthen their confidence and make efforts to push forward when their performance inevitably declines due to the improvement of inclusiveness. After crossing the “inclusiveness trap”, a win-win situation of both inclusiveness and enterprise performance is forthcoming.