Top management team diversity and firm performance: exploring a function of age

Tanikawa, Tomohiko; Kim, Soyeon; Jung, Yuhee

doi:10.1108/tpm-06-2016-0027

Cited by 33 publications

(33 citation statements)

References 64 publications

(114 reference statements)

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“…Previous research related to the relationship between TMT age diversity and performance have been globally and locally (in Indonesia) conducted; however, the results have not been consistent (Kilduff et al , 2000; Webber and Donahue, 2001; Ozer, 2010; Nielsen and Nielsen, 2013; Talavera et al , 2017; Tanikawa et al , 2017; Rompis et al , 2018). Some studies have found a positive relationship (Kilduff et al , 2000), while others have identified negative (Ozer, 2010; Talavera et al , 2017; Tanikawa et al , 2017) and non-significant relationships (Webber and Donahue, 2001; Nielsen and Nielsen, 2013; Rompis et al , 2018). Furthermore, various results have shown that diversity in directors is like a double-edged sword, as the theory stated by Williams and O’Reilly (1998), which had positive and negative impacts.…”

Section: Introductionmentioning

confidence: 92%

Top management team (TMT) age diversity and firm performance: the moderating role of the effectiveness of TMT meetings

Sutarti¹,

Syakhroza

Diyanty

et al. 2021

TPM

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Purpose This study aims to investigate the direct effect of directors’ age diversity, and its interaction effect with the effectiveness of TMT meetings on bank performance. Design/methodology/approach Quantitative data were extracted from the bank’s annual reports for the six years 2011–2016. Age diversity was calculated using the coefficient of variation, and the bank’s performance was measured as return on assets and return on equity. The frequency of directors’ meetings was used as a proxy for the effectiveness of TMT meetings. Findings Based on the hierarchical regression analysis, the results do not support the hypothesis that there is a negative influence between age diversity on performance. However, the results support the hypothesis that age diversity has a positive effect on performance because of the high effectiveness of TMT meetings. Research limitations/implications The limitations of the study include the use of only samples of the banks registered with Bank Indonesia. The subsequent research could use cross-country bank samples. In addition, the research uses age-related diversity variables only. Therefore, further research could consider other types of diversity such as education, functional or tenure. Furthermore, this study is limited to the effectiveness of the director (TMT) meetings as the only moderating variable. Further research could improve on this by including other moderating variables. Practical implications The findings of this study indicate that the existence of age diversity in TMT will aid bank governance if it is accompanied by effective meetings among groups of directors of varying ages. This age composition of directors will make meetings more effective as rich information for strategic decisions will be generated from different points of view because of the wide spectrum of age categories, and hence, there will be a positive impact on bank performance. Social implications This study indicates that effective meetings of TMT groups of different ages will minimize the rise of “self-esteem”. Therefore, they will benefit the creation of a better quality relationship among TMT individuals. Accordingly, TMT within a company will have more opportunities to discuss in providing bright ideas for the company on how to innovate and create a new strategy to improve its performance. Originality/value This study, being the first to explore the effectiveness of TMT meetings to bank performance in the contexts of directors’ age diversity, contributes to the literature in this area, and especially to the body of knowledge about companies implementing a two-tier governance system.

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Section: Introductionmentioning

confidence: 92%

Top management team (TMT) age diversity and firm performance: the moderating role of the effectiveness of TMT meetings

Sutarti¹,

Syakhroza

Diyanty

et al. 2021

TPM

View full text Add to dashboard Cite

show abstract

“…Age is commonly explained as the length of time for which an individual has been alive. Manager's age is usually discussed in terms of younger and older dimensions [33]. The age of managers affects their perceptions, beliefs and decision-making styles.…”

Section: Manager's Age and Sustainable Corporate Performancementioning

confidence: 99%

Manager’s Age, Sustainable Entrepreneurial Orientation and Sustainable Performance: A Conceptual Outlook

Ameer

Khan

2020

Sustainability

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Scholars have investigated the direct linkage between manager's age and sustainable corporate performance, however, the mixed results and conflicting findings on the nature of the relationship demand further explanation through the missing constructs. Therefore, the purpose of this paper is to examine the mediating role of sustainable entrepreneurial orientation in the manager's age and sustainable performance. This study develops a conceptual link by using a dynamic capabilities approach and upper echelon perspective, indicating that younger managers can adopt a more holistic approach towards sustainable practices which can enhance the environmental, social and economic performance of firms. This implies that the relationship between manager's age and sustainable performance can be explained through sustainable entrepreneurial orientation (SEO) which can play a key role in setting organizational direction towards sustainable development and achieving sustainable business performance. This study contributes to the literature by examining the role of SEO in the relationship between the manager's age and sustainable performance. This research will help practitioners recognize the importance of minimizing environmental and social problems generating due to organizational production activities. This will lead to profit generation as well as value creation for nature and the local community.

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“…Age has been argued by literature to be negatively associated with risk preference, and positively with organisational inertia and status quo (Hambrick & Mason 1984). As age implies maturity (Tanikawa, Kim & Jung 2017), older directors possess more ability to predict benefits and risks of strategic decisions. However, more recent previous literature find inconclusive evidence on the relationship between age and several aspects of firm performance, for example, acquisition performance (Field & Mkrtchyan 2016) and corporate social responsibility performance (Harjoto, Laksmana & Lee 2015).…”

Section: Tax Planning Its Components and Top Management Team Characteristicsmentioning

confidence: 99%

Components of Tax Planning and Characteristics of Top Management Team

Wahab¹

2020

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Tax planning activities can be detrimental to the welfare of a country's nations. Firms' tax planning strategies can be classified according to the activities' components, i.e. permanent, temporary and statutory tax rates differences. Upper echelons theory explains top management team (TMT) as corporate elite whose decisions can be predicted through its members' cognitive, value and perceptions. This study therefore attempts to examine the extent the characteristics of TMT members, in terms of age, tenure, education and gender, can explain tax planning strategies, consisting permanent, temporary and statutory tax rates differences. The sample is 216 Malaysian listed firms from 2008 to 2015. This study finds that tenure and education explain tax planning and permanent differences negatively. In contrast, tenure affects statutory tax rates differences positively. This study contributes to literature and practice by providing further evidence to support upper echelons theory in explaining the influence of TMT on tax strategies. This study also provides new evidence of tax strategies from a governance perspective. The findings suggest to the tax authority that TMT characteristics are additional factors to be considered in tax audit framework. The study also contributes to public by highlighting that TMT characteristics are useful to predict tax planning strategies.

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Top management team diversity and firm performance: exploring a function of age

Cited by 33 publications

References 64 publications

Top management team (TMT) age diversity and firm performance: the moderating role of the effectiveness of TMT meetings

Top management team (TMT) age diversity and firm performance: the moderating role of the effectiveness of TMT meetings

Manager’s Age, Sustainable Entrepreneurial Orientation and Sustainable Performance: A Conceptual Outlook

Components of Tax Planning and Characteristics of Top Management Team

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