Top management team functional diversity and organizational innovation in China: The moderating effects of environment

Abstract

While conflicts (cognitive and affective) have been considered as important process variables to better understand the mixed findings on the relationship between top management team functional diversity and organizational innovation, such an input-process-outcome model is still incomplete without considering the environmental factors. This study was formulated to assess the importance of both competitive and institutional environments in moderating such upper echelon effects within a transition economy. The chief executive officers and chief technology officers of 122 Chinese firms were surveyed and both competitive uncertainty and institutional support were found to shape top management team decision making processes and their outcomes. 113Hypothesis 1b: Institutional support moderates the relationship between TMT functional diversity and cognitive conflict. Functional diversity is associated with more cognitive conflict when institutional support is weaker. 5 To address concerns about single source bias we also collected responses from the CTOs about competitive uncertainty and institutional support. The CTOs' ratings correlated strongly with the CEOs'. Supplementary analyses using aggregated CEO and CTO ratings yielded virtually unchanged results.

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