Abstract
The research paper examines the moderating impact of Organizational Life Cycle on the relationship between Top Management Team Diversity and Company Performance. The study first elaborates and establishes the theoretical link between organization lifecycle and composition of management elites. Second, a quantitative empirical study is conducted to test the OLC stages moderating impact on the upper echelons diversity and firm performance of the top companies in the Czech Republic. A detailed procedure is developed to accurately classify organizations at different lifecycle stages, drawing extensively on existing literature and scales. Paper findings state that more mature the company becomes, more diversified the senior management is regardless the firm performance. Also, the industry dynamism impact has its own role in the relationship between the organization life cycle and senior management diversity which is expressed by the paper findings as well.
Highlights
There is a surge of interest in exploring Top management teams (TMT) and Diversity these topics are referring to successful global companies have multinational top management (Berman, 1997).Research on multicultural teams, suggests that national diversity has positive effects for team effectiveness and performance
The statistical findings of this study demonstrated that TMT diversity has an important influence on firm performance
These results propose some conceptual and practical implications about the relationship between TMT diversity and company performance
Summary
There is a surge of interest in exploring Top management teams (TMT) and Diversity these topics are referring to successful global companies have multinational top management (Berman, 1997). One of the most important factors which can substantially increase the efficiency of decisionmaking of top management teams (TMT) is the characteristics where we measure efficient composition and diversity of TMT. The literature examines two important factors substantially influencing the composition, Top Management Team Diversity and Company Performance. A recent focus of this debate has been the issue of increasing Top Management Team (TMT) and Board Diversity to improve company performance and reduce groupthink and inertia at the top of large and influential companies in critical situations. The paper links two independent variables (Top Management Team Diversity) and Company Performance and it investigates how these variables interact by applying moderating variable of Organization Life Cycle, which is vital for each organization especially in a world of fast changes and turbulent environment. The results of this study have twofold results- conceptual and practical as it help us to better understand what stays behind diversity in TMTs and how important is the stage of company development in relation to company performance
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