Impact Of Top Management Team Research Articles

Top management team stability and corporate default risk: The moderating effects of industry competition and strategic deviance

AbstractThis study takes Chinese A‐share listed firms from 2007 to 2020 as samples to examine the impact of top management team (TMT) stability on corporate default risk. The research findings reveal that TMT stability significantly mitigates corporate default risk. Furthermore, industry competition significantly strengthens the inhibitory effect of TMT stability on corporate default risk, while strategic deviance notably weakens this inhibitory effect. Heterogeneity analysis results indicate that the inhibitory effect of TMT stability on default risk is more pronounced for non‐state‐owned enterprises, firms situated in regions with higher levels of social trust, and during periods of elevated economic policy uncertainty.

The Impact of TMT Political Connection on Corporate Performance-with CSR as the Mediation

Background and Aim: The recent release of corporate social responsibility (CSR) reports by companies has once again attracted public attention to the performance of CSR. CSR, as an important aspect that affects a company's financial performance, is highly valued. This research is based on the resource theory and upper-echelons theory to study the impact of Top Management Team (TMT) political connections on CSR strategies and corporate performance. Materials and Methods: Taking A-share listed companies in Shanghai and Shenzhen from 2010 to 2019 as research samples, a multiple linear regression model is used to empirically analyze and test the mechanism of the effects of TMT political connection on CSR and corporate performance. Results: The research results indicate that TMT's political connection has a positive impact on CSR. TMT political connection has a positive impact on corporate performance, and CSR plays a mediating role between TMT political connection and corporate performance. Conclusion: The findings have important implications for a deeper understanding of the motives and economic consequences of CSR, and also help enterprises adjust their corporate governance structure, enhance their strategic awareness of consciously fulfilling CSR, and ultimately promote the sustainable development of enterprises.

Foreign experience and audit report lag

We examine the impact of top management teams (TMTs) foreign experience on audit report lag. We employ a unique sample of Chinese A-share listed firms from 2012 to 2021 and find that the overseas experience (returnee's effect) has a significant positive effect on the audit report lag. We argue that compared with locals, returnees have better education and international experience but often lack local ties and discernment in their native country, which leads to increased audit report lag. We also find that corporate innovation is a potential channel through which overseas experience positively affects audit report lag.

Factors Impacting Digital Accounting Systems Trend: Empirical Evidence from An Emerging Market

This study aims to investigate the factors that influence the digitalization of accounting systems applications in Vietnamese firms. The research focuses on the impact of Top Management Teams (TMTs), innovative corporate culture, Big Data, and Information Technology (IT) Infrastructure on the adoption of accounting systems applications. A comprehensive review of relevant literature reveals that TMTs play a critical role in driving digitalization initiatives, including accounting systems applications. Additionally, an innovative corporate culture can foster the adoption of digital technologies, leading to increased efficiency and accuracy of accounting systems. Moreover, the study identifies Big Data as a crucial resource for accounting systems, while IT Infrastructure is essential for successful implementation. Employing a quantitative survey methodology, the study collects data from 285 Vietnamese companies using purposive sampling techniques. The research findings provide insights into the factors that affect the digitalization of accounting systems applications in Vietnamese firms, which is beneficial for both practical management and theoretical perspectives.

The impact of top management teams' faultlines on organizational transparency―Evidence from CSR initiatives

AbstractCorporate social responsibility (CSR) disclosure is becoming increasingly important in practice, yet knowledge about the antecedents of such CSR initiatives is limited. Drawing on faultline theories, we expect that the compositional attributes of top management teams, such as the level of heterogeneity, influence their decisions about CSR disclosure and reporting. Data and a sample from Chinese publicly traded companies are used to examine our hypotheses. Our results demonstrate that a top management team's faultline strength is negatively related to CSR disclosure decisions and CSR report quality. We contribute to the literature about CSR disclosure by offering specific insights, through a micro‐level analysis, about how to compose and structure top management teams to advance CSR in emerging economies such as China. Practical implications for managers and policymakers are also discussed.

The influence of top management team diversity on Sustainable Development Goals (SDG) reporting: Evidence from Sri Lanka

AbstractMotivated by the limited attention given to the impact of top management teams on Sustainable Development Goals (SDGs), this study sets out to identify the extent to which companies engage in SDG reporting and assess the impact of top management team diversity on SDG reporting based on the upper echelons theory. The data were collected by analyzing the sustainability reports of the listed entities over a three‐year period and conducting semistructured interviews. Findings show that the average disclosures related to SDGs are still at a deficient level and that top management team diversity does not have an impact on SDG reporting in Sri Lankan companies. The qualitative evidence shows that the existing corporate sustainability strategies have been aligned with SDGs, rather than being reformulated or designed to integrate with the SDG targets. Hence, in Sri Lanka, SDG reporting is limited by the superficial attention given to them in corporate strategies. This is a pioneering study that investigates the relationship between top management team diversity and SDG reporting using an explanatory sequential approach.

MANAGERIAL CAPABILITIES, LEARNING ORIENTATION AND PERFORMANCE OF INTERNATIONAL HALAL INDUSTRY USING UPPER ECHELON THEORY

Upper echelon theory (UET) emphsizes the role of management in determining firm strategy that can lead to performance. Many studies have been conducted on UET but very few have addressed UET in international business research, especially in the halal industry. Implementing learning orientation as a culture can serve as a medium in transferring tacit knowledge within the firm. Therefore, this research was conducted to examine the mediating effect of learning orientation between managerial capabilities and international firm performance of small and medium-sized enterprises (SMEs) in the halal industry. This is a quantitative, cross-sectional study with a total of 136 responses analyzed using PLS-SEM. The results show that the impact of top-management team’s (TMT) knowledge of foreign markets on international firm performance depends on learning orientation and partially mediates the relationship between TMT’s international experience and international firm performance. The study is novel in that it tests UET in the halal industry and introduces a new mediator to the UET framework.

Friend or Foe? Institutional Investors and Firm R&D: The Moderating Effect of Female Executives

Innovation financing is crucial to the firm’s technological advancement and sustainable development, yet how does institutional investors affect firm innovation behaviors, and the contingent impact of top management team (TMT) diversity on this relationship, are still on debating. Drawing from literature on institutional investors, firm innovation, and the upper echelons theory, we empirically investigate the impact of institutional shareholding on firm’s R&D, and the moderation effect of female executives by employing a multiple panel dataset covering 2,066 China’s A-share listed companies from 2011 to 2019. Results show that 1) introducing institutional investors significantly improves firm’s R&D, while when the shareholding ratio passes a certain point (17.79%), it turns to inhibit R&D, and 2) the presence of women in the TMT mitigates this relationship. Additional analysis finds that 3) the curvilinear impact of institution ownership is consistent regarding on firm’s innovation performance, and furthermore 4) institutions are more effective in stimulating R&D in state-owned enterprises (SOEs) than that of private-owned enterprises (POEs). This study reveals the double-edged sword impact of institutional investors on firm R&D investment, reconciles controversial arguments on their role in corporate management. It also fills the gap between female executives on institutional shareholders and firm’s R&D, providing meaningful context-based evidence for the upper echelons theory and gender research. Practically, this paper suggests that government from emerging markets should continue encouraging institutions to participate in the capital market as a powerful tool to promote innovation and the reform of SOEs, while keep watch its dark side; and firms need to further embrace diversity in strategic management, and leverage the important value of female leadership in utilizing multiple sources for technological innovation.

Will companies take the initiative in green technology innovation? Empirical evidence from listed manufacturing companies in China

ABSTRACT Green technology innovation (GTI) is an important driver for national green development and a strong fulcrum for the clean production of companies. This paper focuses on the impact of top management team’s (TMT’s) inherent characteristics on GTI from the perspectives of TMT heterogeneity and text tone in management discussion and analysis (MD&A), as well as the moderating role of executive compensation incentives and financial constraints. The results reveal that: a) the TMT heterogeneity has different effects on companies’ GTI; b) the tone in MD&A can significantly promote the companies’ GTI; c) both executive compensation incentives and financial constraints significantly adjust the relationship between the TMT heterogeneity or the tone in MD&A on GTI but in different directions. Moreover, the basic conclusions suitable for non-state-owned companies yet differ in state-owned companies considering the property heterogeneity. Thus, this paper constructs a new integrated framework of TMT heterogeneity, tone in MD&A, executive compensation incentives and financial constraints to stimulate the enthusiasm and initiative of companies to develop GTI, which has an important practical significance on accelerating the sustainable development of green production in developing countries. Finally, this paper offers corresponding policy recommendations.

Women leaders and corporate social performance: do critical mass, CEO managerial ability and corporate governance matter?

PurposeThis study aims to investigate the impact of top management team (TMT)'s gender diversity on corporate social performance (CSP). It sheds light on inconsistent results in literature by testing the moderator effects of chief executive officer (CEO) managerial ability and corporate governance (CG) on such impact.Design/methodology/approachA dynamic panel estimator is applied to an international sample of 8640 firm‐year observations from 2013 to 2017.FindingsThe author finds reliable evidence that the critical mass of at least three women leaders has a positive impact on the firm's CSP. Obtained results suggest, moreover, the deterrence effects of CEO managerial ability and CG tools (board independence, board gender diversity, the presence of a corporate social responsibility committee and family control) on the women leaders' contribution to the firm's CSP level. These results remain consistent with alternative measures for women leaders and CEO managerial ability. However, findings are lost when women achieve the CEO position, the chairperson position or both positions, which imply that men and women leadership styles are closely similar rather than different. Furthermore, women leaders' effect on CSP seems dependent (do not) on the country (industry) which a firm belongs to.Practical implicationsFrom a practical standpoint, the study highlights the importance of fostering the achievement of a critical mass of women leaders and the combination of CEO managerial ability – educational/professional backgrounds – and CG attributes to improve the firm's CSP. The study has important implications for investors and regulators. If investors wish to increase CSP, they should ask for more gender diversified TMTs. Furthermore, this study supports regulators in their efforts to increase senior women's quotas by providing empirical evidence of better social outcomes under leader gender diversity. The study’s evidence is also useful for companies in setting the criteria to identify CEOs who can support their strategic decisions.Originality/valueBy studying the impact female leaders have on CSP under CEO managerial ability and CG as moderators, this study is the first to display complementarities and substitutions between CEO's managerial ability and selected CG attributes in the promotion of CSP by female senior executives. Furthermore, it fills the void on how TMT's gender diversity impact CSP. In fact, while it is conventionally considered that women are more likely to engage in socially responsible activities, sensitive findings of this study shed light on the brighter side of female executives when they achieve the CEO, the chairperson position or both positions.

Does Top Management Team Media Exposure Affect Corporate Social Responsibility?

This study examines the impact of top management team (TMT) media exposure on corporate social responsibility (CSR) and the moderating effect of TMT characteristics based on the upper echelons theory and stakeholder theory. Based on the observations of 5,352 firms between 2010 and 2019, multiple regression analysis is conducted to empirically test whether TMT media exposure can promote CSR. TMT media exposure is further divided into paper media and online media to reveal the impact of different types of TMT media exposure on CSR. Some robustness tests are also conducted to strengthen the regression results. The results found that a high level of TMT media exposure promotes social responsibility. In addition, the TMT power and political connections negatively moderate the relationship between TMT media exposure and CSR. The main contribution of this study is to develop a TMT media exposure model to assess the impact of TMT media exposure on CSR, providing a theoretical contribution to the existing literature and enriching the research in the CSR context from the perspective of the TMT characteristic moderating role.

최고경영진의 특성과 국제화 배경이 기업 국제화와 경영성과 간에 미치는 영향

This paper aims to examine the impact of top management team(TMT)’s demographic characteristics and international background on the internationalization-performance relationship of firms. Based on the upper echelons theory, we consider that TMTs play an important role in the internationalization process of firms in that they have an influential decision-making power on key issues in business. Furthermore, we assume that specific demographic characteristics or international background of TMTs make them select internationalization among business strategies, and it results in different levels of performance attained based on their information processing capacities and international experience. For the empirical analysis, panel data was composed of 89 manufacturers in the automobile industry and electronics industry listed on the KOSPI for seven years from 2013 to 2019, and the statistical result was summarized as follows. (a) The younger the average age, (b) the longer the average tenure, (c) the higher the average education level of TMTs, the more significant positive moderating effect on the relations between firm internationalization-performance. Moreover, (d) the higher ratio of TMTs majoring in internationalization and (e) the higher ratio of TMT’s internationalization have positive moderating effects significantly as well. However, the ratio of TMT's educated or working abroad have no significant moderating effect contrary to expectations. These results imply that characteristics and background of TMTs must be considered when identifying the reason firms with similar levels of internationalization has difference in management performance.

How TMT diversity influences open innovation: an empirical study on biopharmaceutical firms in China

ABSTRACT Despite the significant impact of top management team (TMT) upon innovation, few relevant research efforts could be found in the existing open innovation literature. The role of TMT diversity in shaping the performance of open innovation is scarcely investigated. Analysis of panel data from 150 biopharmaceutical firms in China from 2013 to 2017 reveals that the performance of two forms of open innovation (i.e. inbound and outbound) is contingent on TMT diversity. In addition, a differential moderating effect occurs when TMT diversity emerges from distinct attributes of the members, namely, surface-level (e.g. gender and age) and deep-level (e.g. functional background). The results contribute to studies on upper echelons theory and open innovation strategy.

Signaling value of top management team

PurposeThe purpose of this paper is to integrate the upper echelon theory with signaling theory and examine the impact of top management team (TMT) on the initial public offering (IPO) performance of Chinese firms in the USA.Design/methodology/approachThis study used Security Data Corporation (SDC) that is a central database for foreign IPOs in the USA. The authors identified 142 Chinese firms that issued stocks on the US markets between 2003 and 2014. This study used firm’s final prospectuses to collect data manually.FindingsThis study finds that the TMT characteristics such as functional heterogeneity and international exposure convey the positive signal of firm’s legitimacy to the US investors and increase the IPO performance.Originality/valueThis study extends the upper echelon perspective that has previously overlooked the signaling value of TMT characteristics in the foreign IPO studies. The top management plays an important role to the firm’s successful foreign market listing. Since China joined the WTO in 2001, a large number of Chinese firms have started IPOs in the USA, but there is a dearth of research on these firms. This study aims to contribute to the study of international business and management and describes that the TMT functional heterogeneity and international exposure have a significant role in the success of Chinese foreign IPOs.

Diversity and the Performance of Selected Financial Institutions of Asia

Linking with the business case for diversity, this study examines whether the top management team (TMT) and the board of directors (BODs) diversity has a positive impact on financial institution (FI) performance in select countries of Asia least researched domain. We use data from 119 financial institutions across Asia for the year 2015, initially 1,447 institutions; however, incomplete data was excluded from final analysis. We use three proxies for diversity, that is, nationality diversity, gender diversity, and age diversity of TMT and BODs. To investigate the impact of TMT and BODs diversity, cross-sectional ordinary least-squares estimation is applied, using Return on Average Assets (ROAA%) as a measure of performance. We find that nationality diversity and age diversity is positively and significantly related to FIs performance. Our evidence indicates that executives and board members with diverse exposure and younger age improve FIs profitability. However, there is no significant relationship between gender and FIs performance.

Research on the Impact Mechanism of Top Management Team Characteristics on Earnings Management

As the core human resource of the enterprise, the top management team plays an important role in the development of the enterprise. The choice of behavior of top management will be influenced by its characteristics, which will influence the decision-making of enterprises. As one of the behavioral decisions, earnings management can influence enterprises to make the right strategic choice. Therefore, it is necessary to study the impact of earnings management from the characteristics of top management team. Based on the literature review both at home and abroad, this dissertation studies the impact of top management team on earnings management from the perspective of demographic and psychological characteristics of senior management team in order to enrich the existing problems.

The relationship between management team (TMT) metacognition, entrepreneurial orientations and small and medium enterprises (SMEs) firm performance

This study examines the impact of top management team (TMT) metacognition on entrepreneurial orientation and firm performance. The result revealed that the mediation effect of 'managing risk' in TMT entrepreneurial orientation has a negative impact on SMEs performance. Hence, TMT in SMEs should focus their strategic decisions on innovativeness and proactiveness rather than high risk projects to remain competitive. Furthermore, the findings further supported that effective behavioural integration of TMT could significantly influence the outcome of TMT metacognition and entrepreneurial orientation. 1500 SMEs were surveyed in this study.

The relationship between management team (TMT) metacognition, entrepreneurial orientations and small and medium enterprises (SMEs) firm performance

This study examines the impact of top management team (TMT) metacognition on entrepreneurial orientation and firm performance. The result revealed that the mediation effect of 'managing risk' in TMT entrepreneurial orientation has a negative impact on SMEs performance. Hence, TMT in SMEs should focus their strategic decisions on innovativeness and proactiveness rather than high risk projects to remain competitive. Furthermore, the findings further supported that effective behavioural integration of TMT could significantly influence the outcome of TMT metacognition and entrepreneurial orientation. 1500 SMEs were surveyed in this study.

Understanding top management team conflict, environmental uncertainty and firm innovativeness

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.

Diversity and the Performance of Selected Financial Institutions of Asia

Linking with the business case for diversity, this study examines whether the top management team (TMT) and the board of directors (BODs) diversity has a positive impact on financial institution (FI) performance in select countries of Asia. We use data of 119 financial institutions across Asia for the year 2015. We use three proxies for diversity, that is, nationality diversity, gender diversity, and age diversity of TMT and BODs. To investigate the impact of TMT and BODs diversity, cross-sectional ordinary least-squares estimation is applied, using Return on Average Assets (ROAA%) as a measure of performance. We find that nationality diversity and age diversity is positively and significantly related to FI performance. Our evidence indicates that executives and board members with diverse exposure and younger age improves FI profitability.