The Great Temporal Divide: The Strategic Implications of Top Management Team Temporal Faultlines

Abstract

Despite the emerging strategy research on the psychological time of upper echelons, we know little about how the individual temporal orientations of senior executives configure at the top management team (TMT) level to affect firm strategies. Because TMT members’ temporal orientations configure in a complex way and trigger significant temporal interactions within the TMT, we integrate faultline and time interaction performance (TIP) theories to address this fundamental question. Specifically, we introduce the notion of TMT temporal faultlines and develop a model explaining how TMT temporal faultlines affect the intra-TMT interactions of temporal planning and, in turn, two facets of firm strategic flexibility (reactive versus proactive). Based on three-wave survey data from 221 TMTs of Iranian high-tech small- and medium-sized enterprises (SMEs), our study found that TMT temporal faultlines had a positive effect on reactive strategic flexibility but a negative effect on proactive strategic flexibility through inhibiting TMT temporal planning. The results expand the nascent upper echelons research on psychological time by advancing the temporal perspective to the TMT level and revealing its strategic ramifications.