Understanding top management team conflict, environmental uncertainty and firm innovativeness

Abstract

PurposeThe purpose of this study is to understand the impact of top management team (TMT) processes on firm innovativeness. Firm innovativeness is critical for organizational survival. Yet, the authors’ understanding about the key determinants of firm innovativeness is limited, particularly concerning the role of TMT dynamics. Drawing on upper echelon’s theory, the authors develop and test hypotheses concerning the influence of two TMT processes, namely affective conflict and cognitive conflict, on firm innovativeness. They also explore the boundary conditions of TMT dynamics by examining the moderating effect of environmental uncertainty on the relationship between TMT conflict (affective and cognitive conflict) and firm innovativeness.Design/methodology/approachThe authors collected survey-based data from TMT members in 171 information technology organizations based in India. They used multiple regression analyses to test the study hypotheses.FindingsThe empirical findings indicate that TMT affective conflict is negatively associated with firm innovativeness, whereas TMT cognitive conflict has a negative curvilinear relationship with it. Both relationships are stronger in firms operating in environments characterized by a high degree of uncertainty.Originality/valueThis study highlights the role of TMT conflict in the pursuit of firm innovativeness. Significantly, the study shows that both TMT affective conflict and cognitive conflict can affect firm innovativeness. However, their effectiveness is contingent on environmental uncertainty. This contributes to the firm innovation literature by clarifying how specific types of TMT conflict influence firm innovativeness in different environmental conditions.