Top Management Team Tenure Research Articles

Exploring the missing link between top management teams' characteristics and environmental information disclosures of construction corporations

PurposeGiven the heavy pollution feature of the construction industry, construction corporations need to adopt an effective environmental governance strategy. The quality and quantity of environmental information disclosure (EID) implementation, as an essential part of a corporate environmental governance strategy, is impacted by the characteristics of the top management team (TMT). This paper aims to analyze the relationship between the demographic characteristics of the TMT (i.e. gender, age, tenure, educational level, and duality) and corporate EID.Design/methodology/approachUsing data from listed construction corporations generated between 2014 to 2018 in China, this study employs the Tobit regression model to test the research hypotheses. Also, this study applies a novel analytical approach, necessary condition analysis (NCA), to conduct a series of additional tests.FindingsThe results reveal that tenure and educational level are significantly and positively related to EID, while gender, age, and duality in the executive role are not significantly related to EID. When considering the TMT size as a moderator, the TMT age is positively related to the corporate EID, and the size of the TMT acts as a moderator to weaken the positive effect of the TMT age on the EID. The NCA results show that TMT gender, age, tenure, and educational level are necessary when the levels of EID exceed 40%.Originality/valueOur findings suggest that TMT characteristics have a relatively significant effect on corporate EID levels, which extends EID research to the construction industry. Corporate planners can endeavor to shape TMT characteristics to improve EID levels. The results of NCA provide insights into what TMT characteristics construction corporations need to satisfy in their pursuit of transparent EID, as well as the levels at which these characteristics are desired.

The more diverse, the better? Exploring the moderating role of hospitality top management team diversity on CSR-FP link

While top executives make strategic decisions for corporate social responsibility (CSR), the composition of top management team (TMT) in the relationship between CSR and FP has yet to be explored in the hospitality literature. Building on the upper echelons, human capital, and stakeholder theories, this study focuses on the moderating role of four TMT diversity types, gender, age, industry experience, and tenure, in the CSR-FP relationship. This study found that diversity in TMT age and industry experience positively moderate the CSR-FP relationship, while tenure diversity negatively moderates such relationship and gender diversity is not a significant moderator. This study sheds light on the benefit of a more diverse hospitality firm TMT in terms of CSR, which extends the theoretical discussion about the effect of CSR on FP. Hospitality industry practitioners and relevant stakeholders can be illuminated by the advantages of a more diverse TMT that can efficiently utilize CSR to contribute to FP.

How do top management team characteristics affect digital orientation? Exploring the internal driving forces of firm digitalization

The top management team (TMT) plays a key role in the process of the firm digital transformation. However, few studies have focused on the impact of TMT characteristics on the digital orientation of firms. In this paper, we simultaneously explore the impact of the dispersion, aggregation, and background characteristics of TMT on the digital orientation of firms. Based on the upper echelons theory and strategic orientation theory, we propose that the diversity and average education level of TMT positively impact firms' digital orientation. The average age and tenure of TMT have a negative impact on the digital orientation of firms. The overseas and financial backgrounds of TMT members have a positive impact on the digital orientation of firms. Our hypothesis was tested using large-scale longitudinal data and computer-aided text analysis methods from Chinese listed companies. This paper provides useful supplements to early research on digital driving factors and digital orientation in emerging economies, and also provides more universal suggestions for digital practices in firms.

Supplier transaction, TMT characteristics, and the persistence of earnings: do their relationship contribute towards sustainable performance of Chinese listed manufacturing sector firms?

The construction of supplier transaction is one of the strategic choices of many firms. However, the impact of business strategies on the persistence of earnings remains to be further investigated. The innovation of this paper lies in interpreting the impact of supplier transaction on earnings persistence from the perspective of characteristics of the top management team (TMT). We consider Chinese listed manufacturing firms from 2012 to 2019 to examine the relationship between the supplier transaction and the persistence of earnings. Statistical results show that supplier transaction characteristics of the TMT have a significant moderating effect on the relationship between the supplier transaction and the persistence of earnings. This implies that the behavior of TMT can be vital to the firm in maintaining sustainable performance. The higher age level or longer average tenure of TMT can significantly improve the positive effect of the supplier transaction tenure heterogeneity of TMT that will significantly improve the negative effect. This paper expands the literature on supplier relationship, and corporate earnings from a new perspective that improves the empirical evidence of the upper echelons theory, and also provides evidence support for the construction of supplier relationship and TMT.

The Government Subsidies effect on the Company Strategic Change-Theory and Emprical

Government environmental regulation is an important policy to promote industrial development. In view of the fact that the implementation of the enterprise's production strategy is not motivated enough, the government will directly subsidize the enterprise, healthy and stable development of the enterprise. Based on dynamic managerial capabilities theory and top management team theory, this paper takes Chinese A-share listed companies from 2012 to 2020 as research samples to theoretically analyze and empirically test the impact of government subsidies on strategic change. This paper also demonstrates the moderating effect of property right nature, tenure of top management team and career background of top management team on the above mentioned two relationships. The results in the research show as follows. Firstly, government subsidies are significantly positively correlated with the degree of strategic change. Secondly, in state-owned enterprises, government subsidies are positively correlated with strategic change, while in non-state-owned enterprises, they are not significantly correlated. Thirdly, tenure of the executive team weakens the positive correlation between government subsidies and the degree of strategic change. Fourthly, the "productive style" career background of the top management can enhance the positive correlation between government subsidies and strategic change. This paper not only enriches the research results of dynamic management ability and strategic decision-making, but also provides beneficial enlightenment for enterprises to implement strategic reform, which can response to the changing external environment and absorbing external social resources.

The Impact of Top Management Team Characteristics on the Risk Taking of Chinese Private Construction Enterprises

Private construction businesses have grown quickly, greatly boosting China’s economic growth; nonetheless, these businesses suffer tremendous developmental uncertainty, particularly when compared to larger state-owned businesses. The traits of the top management team (TMT) may have a direct impact on how risk-taking and decision-making behaviors are exhibited by businesses, according to earlier studies. The majority of private construction companies in China are family businesses with family members making up the majority of their top executives. As a result, these companies are vulnerable to family centralization, which will definitely boost their risk-taking level. This study used a sample of private listed companies in China’s construction industry from 2009 to 2019 to explore the impact of CEO traits on the risk-taking degree of enterprises. The findings show that a higher percentage of top female managers and a higher average rate of TMT member both lower the level of risk taking in private construction businesses. The level of risk taking, however, is positively impacted by the top management’s higher average education level. The average tenure and overseas experience of TMTs and the degree of risk taking in private construction enterprises are not significantly correlated. Additionally, the degree of risk taking in private construction firms can vary depending on the qualities of the senior management team.

How does top management team diversity influence firm performance? A causal complexity analysis

This research investigates the correlation between the diversity background of top management team (TMT) and firm performance. We target gender diversity and cultural diversity and also explore the interplay between TMT diversity attributes and other TMT conventional compositions and their effects on organization performance. Incorporating four dimensions into this analysis under TMT conventional compositions such as TMT tenure, TMT network, TMT scale, and TMT age, this paper utilizes the OSIRIS database to obtain a dataset of 442 U.S.-listed companies in the information technology field. The research adopts multiple regression analysis to examine the proposed hypotheses and applies fuzzy-set qualitative comparative analysis (fsQCA) to figure out the optimal combinations between top management team diversities and conventional compositions in order to achieve better firm performance.

Family CEO successor and firm performance: The moderating role of sustainable HRM practices and corporate philanthropy

AbstractWe develop and test a multi‐stakeholder perspective of intrafamily CEO succession by exploring how family CEO successors affect post‐succession firm performance under conditions of sustainable human resource management (sustainable HRM) practices toward employees and top managers, as well as corporate philanthropic activities in the broader community. Using a sample of 414 CEO successions in family firms listed on China's stock exchanges during 2008–2016, we find an insurance‐like effect of both sustainable HRM and corporate philanthropy in enhancing firm performance of family CEO successors. Our results also show that firms with family CEO successors will outperform those with nonfamily counterparts under conditions of high employee compensation, low top management team (TMT) compensation, and long TMT tenure. Our findings suggest that sustainable HRM and corporate philanthropy complement rather than substitute in strengthening family leadership during CEO succession.

Parental Leave Policies and Innovation Performance in SMEs

When is the parental leave taken by top management team (TMT) members beneficial or detrimental for the innovation performance of SMEs? Drawing from upper-echelon theory and role theory, we advance a model that proposes that smaller TMTs and TMTs with longer tenures have a better potential for leveraging the benefits and reducing the shortcomings of parental leave-taking by their members. We test this model using unique data on a large sample of Swedish SMEs. We find that TMT members’ parental leave has a weak positive impact on SMEs’ innovation outputs. Conversely, the effect is strongly positive when TMT size is small and/or TMT tenure is high. Theoretical and practical implications of parental leave policies for SME intonation are discussed.

RESEARCH ON THE RELATIONSHIP BETWEEN THE HETEROGENEITY OF THE TOP MANAGEMENT TEAM(TMT) AND THE TOTAL FACTOR PRODUCTIVITY(TFP) OF ENTERPRISES

In recent years, the huge negative impact of COVID-19 has slowed down economic growth in many countries. Therefore, it is very important to study how to improve the total factor productivity to promote the development of enterprises. Top management team is the core position of an enterprise and has a key influence on total factor productivity. In China, the role of top management teams at listed companies is increasingly valued. This study analyzes the relationship between the heterogeneity of TMT and TFP based on the data obtained from Chinese A-share listed companies from 2007 to 2019. In the empirical study, the comprehensive heterogeneity index, age heterogeneity and tenure heterogeneity of top management team were used as proxy variables to construct a regression model, and the LP method was used to calculate TFP. The results are as follows:The comprehensive heterogeneity index of Top management team Has a significant negative impact on total factor productivity; The age heterogeneity of top management team has a significant positive impact on total factor productivity; Top management team tenure heterogeneity has a significant negative impact on total factor productivity.

Top management team heterogeneity, corporate social responsibility and firm risk: an emerging country perspective

PurposeThis study aims to examine the effects of top management team (TMT) heterogeneity and corporate social responsibility (CSR) on the firm risk of Bursa Malaysia listed firms. Also, this study examines the moderating effect of CSR between TMT heterogeneity and firm risk.Design/methodology/approachThis study uses panel regression models to test the hypotheses. The sample of this study is Bursa Malaysia non-financial listed firms from 2013 to 2017 with 3,055 observations.FindingsThis study finds significant effects of TMT age and tenure heterogeneities on total risk. Effects on idiosyncratic risk are evident only within age heterogeneity. Further, this study finds negative effects of CSR on total and idiosyncratic risks. CSR significantly moderates the relationship between total TMT heterogeneity and firm systematic risk.Practical implicationsThis study reduces the literature gap by providing useful insights on the effects of CSR activities and TMT heterogeneity on firm risk. The findings can also provide hints to investors to assist them in assessing firm risk based on TMT heterogeneity and firms’ CSR. This study can also benefit shareholders in their attempts to mitigate the risk of their portfolio by investing in firms that are socially responsible as firms with high CSR suffer lower total and idiosyncratic risks.Originality/valuePrevious studies have emphasised on the influence of TMT characteristics and CSR on firm performance. However, studies that investigate the effects of TMT heterogeneity and CSR on firm risk are limited in the context of Malaysia.

Entrepreneurial orientation and the interaction of top management team background characteristics

AbstractThe current study draws on the upper echelons theory to examine the nature of the relationship between top management team (TMT) tenure and a firm's level of entrepreneurial orientation (EO). We find evidence of an inverted-U relationship between TMT tenure and EO using data from firms across three industries with varied industry dynamics. We further introduce a contingency element by demonstrating that TMT industry background heterogeneity moderates the relationship between TMT tenure and EO, where the inverted U-shaped relationship will be more pronounced when the heterogeneity is low and will flatten when the heterogeneity is high. The findings demonstrate the complexity CEOs and governing bodies face while shaping a diverse TMT that can affect EO.

The role of top management teams in firm responses to performance shortfalls

Past research rooted in the Behavioral Theory of the Firm has extensively examined the impact of performance feedback on organizational change and risk taking, finding robust effects that performance shortfalls enhance the risk taking of firms. We argue that the strength of this effect is likely to be contingent on the attributes of the firm’s top management team. To enhance our understanding of which firms are more likely to be sensitive to performance cues, we draw on the Upper Echelon Theory to theorize that key structural attributes of the top management team—tenure and gender diversity, size, and pay disparity—affect how top executives interpret poor performance and act upon it through engagement in strategic risk taking. Results show that top management teams with greater tenure diversity, smaller size, and smaller pay disparity among members engage in more strategic risk taking following performance shortfalls.

Does TMT composition matter to environmental policy and firm performance? The role of organizational slack

AbstractThis study examines the relationship between the heterogeneity of top management team (TMT) composition and firm performance by focusing on the mediating role of environmental policy: a greenhouse gas (GHG) emission strategy. Organizational slack is viewed as a moderating variable that influences the above mediated relationship. Based on data from Taiwanese public firms with CSR reports, it is found that TMT educational background heterogeneity and tenure heterogeneity negatively influence firm performance, and the GHG emission strategy mediates this relationship. Moreover, this study finds that unabsorbed slack significantly strengthens the influence of TMT educational background heterogeneity on the GHG emission strategy, and unabsorbed slack also moderates the mediation effect of the GHG emission strategy on the relationship between TMT educational background heterogeneity and firm performance. The theoretical and managerial implications of the results are discussed in the discussion section and conclusions of the study.

A temporal perspective on the relationship between top management team internationalization and firms' innovativeness

This study examines whether top management team (TMT) internationalization is positively related to firm innovativeness. Besides focusing on the accumulation of top managers' international knowledge and capabilities, we explore the influence of moderators reflecting temporal concerns at three levels: CEO age, TMT tenure, and firm age. Combining upper echelons theory with innovation literature and using a sample of large stock‐listed German firms, we demonstrate that TMT internationalization can increase firm innovativeness. This relationship is context‐dependent on the age of the CEO. Overall, this paper sheds light on the antecedents of firm innovativeness and the consequences of increasingly international TMTs.

The Characteristics of Top Managment and Firm's Earnings Management: the Evidence Form Thailand

This study investigates the association between Top Management Team (TMT) characteristics and Earnings Management (EM) by examining 1,855 observations of Thai-firm listed in period of 2013–2017. This study employs Modified Jones model (1991) and Roychowdhury (2006) to measure accruals and real activities earnings management, respectively. The findings in this paper reveal TMT characteristics influence on both in AEM and REM and firms with older, long tenure and possessing CPA certification of TMT lead to decrease in AEM level. In contrast, TMT tenure has positive influence to REM level that implies long tenure of TMT tends to manage earnings through operation activities instead of discretionary accruals. However, the percentage of female members and master’s degree education of TMT have no significant association with earnings management.

CEO Power and Top Management Team Tenure Diversity: Implications for Firm Performance

Using agency theory, we explore how the CEO (as principal) and the top management team (TMT) members (as agents) interactively influence the performance of a firm. By adding performance feedback theory into agency relations, we investigate whether the interactive effect of CEO–TMT relations on firm performance differs when past firm performance is either poor or strong. Using a sample of 115 Japanese firms, our results show that the interactive effect of CEO power and TMT tenure diversity on firm performance is positive in a situation of poor past firm performance. However, in a situation of strong past firm performance, the opposite result is found. These findings imply that CEO power might play a significant role in enhancing the effectiveness of TMT diversity on firm performance when past firm performance is poor.

Tenure of top management team, employee relationship, and value of airlines

This research aims to examine (1) how the tenure of the top management team (TMT) affects firm employee (CSR) (e.g., creating promotion opportunities, maintaining relationships with labor unions, programing high-quality retirement plans, protecting employee health and safety, and so on) and (2) how such strategic implementation influences the performance of airlines. We examined 13 airlines publicly traded on the American stock market between 1998 and 2013 and collected relevant data from various sources (e.g., COMPUSTAT, EXECUCOMP, and the Kinder, Lydenberg, and Domini (KLD) database). Panel feasible generalized least square regression was employed to analyze the data. We found an inverted U-shaped relationship between TMT tenure and firm employee-related strategic execution. We also confirmed that firm employee-related strategic implementation positively impacts the value of airlines.

Top Management Team Tenure Diversity and Performance: The Moderating Role of Behavioral Integration

Integrating insights from organizational information processing theory and social categorization theory, we examine how top management team (TMT) tenure diversity affects team performance. We propose a theoretical framework that examines how these two conflicting processes occur simultaneously within diverse TMTs by arguing that TMT tenure variety influences information processing while TMT tenure separation influences the social categorization process. We argue for the presence of nonlinear relationships between tenure variety, tenure separation, and team performance. Furthermore, we propose that these relationships are moderated by the level of TMT behavioral integration. Based on a sample of 357 senior managers from 126 firms in China, we find that both TMT tenure variety and TMT tenure separation have opposing and nonlinear relationships with TMT performance, and the relationship between TMT tenure separation and TMT performance is moderated by the level of TMT behavioral integration. Our results help clarify the conflicting conclusions of previous TMT tenure diversity research. Our findings suggest that the effect of diversity depends on the type of diversity as they affect different processes. Our findings also explain how the opposing effects of both information processing and social categorization can occur simultaneously in the TMT. Furthermore, the effects of both processes are not linear while the level of diversity variety and diversity separation can affect the marginal effects. Finally, TMT behavioral integration processes affect how tenure diversity plays its role in team performance.

The role of top management team diversity in shaping the performance of business model innovation: a threshold effect

ABSTRACTBusiness model innovation is one of the firm’s most important strategic decisions. Top management team (TMT), as the critical decision-makers, has essential influence upon such decisions. However, the role of TMT diversity in shaping the performance of business model innovation is less explored in the literature. Based on a sample dataset of 906 observations of small and medium enterprises from China Startups Stock Market during the period of 2009–2011, we find that TMT diversity exhibits a significant threshold effect on the relationship between business model innovation (in terms of novelty-centred and efficiency-centred business model) and firm performance. More specifically, when TMT functional diversity arrives at a certain level, the positive relationship between novelty-centred business model and firm performance becomes more pronounced. On the other hand, the positive relationship between efficiency-centred business model innovation and firm performance will be more significant when TMT tenure diversity increases to a certain level.