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

Abstract

This 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.

Impact of Corporate Environmental Responsibility on Firm’s Financial Performance: Moderating Role of Organizational Slack and Industry Competition

“…If sample size will be greater than answer may become similar to previous researches. Third, industry competition has positive significant moderating effect on the association between CER and CFP which is similar to previous researches like Hull (2008), who said if competition is high in industry then it will urge companies to attract more customers and investors towards them which is possible if they provide convenience to them by providing safe environment and ultimately it will create long term revenue for the company (Kim & Park, 2021;Lee et al, 2021;Wu et al, 2020). So, hypothesis one has been accepted as corporate environmental responsibility has a significant positive effect on corporate financial performance.…”

“…Still, it will create long-term profit for the company, which is the company's ultimate desire. Now firms are not focusing on the endorsement of their products and services only but are also focusing on environmental protection to create a positive image of their companies in stakeholders' minds (Majeed, 2015;Lee, Liu, & Yu, 2021). Now many strategies are proceeding in Pakistan's firms about economic, social, and environmental enlargement to accomplish sustainable benefit.…”

“…For the attainment of potential gains, CER is considered an asset. Firms who do high investments in green technologies and surrounding administration structures get high turnover as a reward and develop into a competent body in the industry (Hart, 2011;Lee et al, 2021). For supporting the business, it is necessary to manage the resources in such a way that CER make operations efficient, increase share prices, enhance the ecological status, potentially lessen allowable operating cost, enhance subsidies, enhance customers and investors and then ultimately create a competitive advantage (Shah, 2007).…”

Tourism Firms’ Vulnerability to Risk: The Role of Organizational Slack in Performance and Failure

“…Unabsorbed slack, in the form of bundles of unconstrained resources, increases exploration and facilitates resource redeployment and synergies (Argilés-Bosch et al 2018; Tabesh, Vera, and Keller 2019). Uncommitted resources within a firm’s unabsorbed slack can easily be redeployed and used more flexibly, with discretion for new strategies to adapt to external policy changes (Lee, Liu, and Yu 2021). Unabsorbed slack helps firms in turbulent business environments not only to tackle uncertainties, including political risk, but also to achieve goals under institutional pressures (Xu et al 2015).…”

Financial Leverage, Educational-Level Faultline Strength and Strategic Change: Evidence from China

“…Tzabbar and Margolis (2017) believed that the enhancement of educational heterogeneity can bring more diversified information to the team, which is conducive to the formulation of strategic change decisions. Lee et al (2021) believed that the high heterogeneity of education level is not conducive to the fit of TMT's strategic concepts, and will hinder the implementation of strategic changes in enterprises. But the impact of executive decision-making is not only a single feature, but also a variety of features overlap.…”