Top management team nationality diversity and firm performance: A multilevel study

Abstract

This research reexamines the equivocal relationship between top management team (TMT) diversity and firm performance. Combining upper echelons theory with insights from institutional theory, we establish a new, timely dimension of TMT diversity—nationality diversity—and develop an integrated multilevel framework explaining how its performance implications vary across contextual settings. We find that nationality diversity is positively related to performance; and this effect is stronger in (a) longer tenured teams, (b) highly internationalized firms, and (c) munificent environments. More generally, our research demonstrates that the consequences of TMT diversity depend on the (1) specific attributes of diversity being considered and (2) firm and industry conditions under which strategic decisions take place. Copyright © 2012 John Wiley & Sons, Ltd.

Home country institutions and the internationalization of state owned enterprises: A cross-country analysis

“…Informal constraints are culturally-grounded and can thus not be changed through deliberate policies but are passed from one generation to the next and only change gradually in that process (Hofstede, 1991;. They have an enduring impact on executive mindsets (Geletkanycz, 1997) and interpretation and response to strategic issues (Schneider & DeMeyer, 1991;Nielsen & Nielsen, 2013).…”

The Role of Management Control Systems and Top Teams in Implementing Environmental Sustainability Policies

“…Authors following upper echelon tradition have argued that demographic characteristics, such as age, gender, tenure, educational and functional background are indicative of underlying cognitive and affective managerial characteristics that determine the decisions of management teams, which subsequently affect organizational performance [25,26]. Recently upper echelon literature has focused on the heterogeneity of top management teams (TMT), where several authors have shown that heterogeneity provides TMTs with a greater variety of professional perspectives, types of knowledge and decision-making styles [27,28]. This should result in more ideas and more creativity in the development of environmental strategic actions.…”

Synergy of Top Management Team Demographics, Strategy and Structure: Empirical Evidence on Performance of Public Enterprises

“…This may require the construction of structure configurations with other factors in mind to enhance synergy. The effects of TMT demographics on performance range from positive through non-significant to negative (Nielsen & Nielsen, 2013). Organizational performance gives a broad picture of the TMT and actions of managers whose role in the organization is pivotal (Nielsen, 2013).…”

“…The effects of TMT demographics on performance range from positive through non-significant to negative (Nielsen & Nielsen, 2013). Organizational performance gives a broad picture of the TMT and actions of managers whose role in the organization is pivotal (Nielsen, 2013). TMT demographics are believed to influence the decisions that they make in terms of corporate strategy and organizational structure adopted that in turn will produce outcomes, notably organizational performance (Bagire, 2012).…”