Board Competence and Top-Management Team External Ties for Performance

While most studies take a dyadic view when examining the environmental difference between the home country of a multinational enterprise (MNE) and a particular foreign country, they ignore that an MNE is managing a network of subsidiaries embedded in diverse environments. Additionally, neither the impacts of global environments on top executives nor the effects of top executives’ capabilities to handle institutional complexity are fully explored. Thus, using a three-essay format, this dissertation tried to fill these gaps by addressing the effects of institutional complexity and top management characteristics on top executive compensation and firm performance. Essay 1 investigated the impact of an MNE’s institutional complexity, or the diversity of national institutions facing an MNE’s network of subsidiaries, on the top management team (TMT) compensation. This essay proposed that greater political and cultural complexity leads to not only greater TMT total compensation but also to a greater portion of TMT compensation linked with long-term performance. The arguments are supported in this essay by using an unbalanced panel dataset including 296 U.S. firms with 1,340 observations. Essay 2 explored TMT social capital and its moderating role on value creation and appropriation by the chief executive officer (CEO). Using a sample with 548 U.S. firms and 2,010 observations, it found that greater TMT social capital does facilitate the effects of CEO intellectual capital and social capital on firm growth. Finally, essay 3 examined the performance implications for the fit between managerial information-processing capabilities and institutional complexity. It proposed that institutional complexity is associated with the needs of information-processing. On the other hand, smaller TMT turnover and larger TMT size reflect larger managerial information-processing capabilities. Consequently, superior performance is achieved by the match among institutional complexity, TMT turnover, and TMT size. All hypotheses in essay 3 are supported in a sample of 301 U.S. firms and 1,404 observations. To conclude, this dissertation advances and extends our knowledge on the roles of institutional environments and top executives on firm performance and top executive compensation.

PurposeThe purpose of this paper is twofold: first, to investigate the effect of top management team (TMT) tenure diversity and firm financial performance (return on equity [ROE], return on assets [ROA]), and, second, to examine the moderating effect of TMT average age between TMT tenure diversity and firm performance.Design/methodology/approachThe paper presented results from a quantitative study of 744 TMTs in Japanese manufacturing firms. The multiple hierarchical regression analysis was used to test the hypotheses.FindingsThe results show that TMT tenure diversity had a negative and significant main effect on ROE but not ROA. Furthermore, the results also indicated that the negative relationship between TMT tenure diversity and firm performance was attenuated by having older TMTs.Originality/valueFirst, this paper expands scope of research on TMT diversity, which has hitherto primarily on non-individualistic variables (such as industry setting) by examining the moderating role of an individualistic variable (TMT average age). Second, this paper extended the attempts to apply the age-related theory by considering the role from the viewpoint of group level, namely, TMT average age.

Research on firm internationalisation has tended to focus on Large Enterprises(LEs), with relatively less focus on Small Medium Enterprises (SMEs), despite the importance of SMEs in generating national employment and economic development. In many countries the government has acknowledged SMEs as a key source of domestic income growth and employment creation, most particularly from export activities. Studies on internationalisation of SMEs, however, have been predominantly focused on developed countries. This study therefore is focused on the internationalisation of SMEs from Indonesia, which represents developing countries. Most studies of exporting SMEs focus on macroeconomic factors such as regulation, infrastructure and programs which assist SME development. On the other hand, management literature has recognised the important roles of senior managers in terms of their management know‐how and international business skills as human capital which can influence the export activity of the firm. At the same time, social capital is also recognised a further resource needed for SME internationalisation. Therefore this research will address this gap in order to examine the role of entrepreneur’s human and social capital in internationalisation of the firm. Further to this, findings on the relationship between firm internationalisation and firm performance are mixed. More specifically, the effect of internationalisation of SMEs on business performance has not been seriously investigated. This study therefore seeks to fill this gap by examining the unique effect of different dimensions of internationalisation on business performance. Overall, this study has three purposes: the first is to measure company resources (Human and Social Capital) influencing Indonesia’s manufacturing exporting SMEs in their internationalisation process; the second is to examine the effect of human and social capital in relation to three dimensions of internationalisation (international performance, number of markets and time to internationalise); and the third is to assess the effect of the aforementioned internationalisation dimensions on firm financial performance. This study used a mixed method combining quantitative and qualitative approaches. The quantitative data was drawn from 241 SMEs’ managers and/or owners who have exporting activities from a total of approximately 3 million SMEs based on the Indonesian government database. The qualitative data was collected through interviews with ten SMEs owner‐managers who were participating in the survey. Using Structural Equation Modelling (SEM) technique, the findings suggest that Management Know‐How have no positive relationship with any dimension of internationalisation, but, interestingly, it has a negative relationship with time for internationalisation; suggesting that it delays the internationalisation of the firms. The findings also show that both International Business Skills and Social Capital skills have a positive relationship with international performance and number of exporting markets, but not with time for internationalisation. With regard to the effect of internationalisation on business performance, the findings show that international performance has no effect on business performance, but the number of export market has a positive relationship with business performance. On the other hand, the time for internalisation has a negative effect on business performance, meaning that the later the SMEs internationalise, the better their performance. Qualitative findings indicate that good networks with competitors, suppliers and government will help a firm to serve the international market successfully. From theoretical perspectives, the findings support the Resource‐Based View theory as international business skills have positive relationships with two dimensions of internationalisation. The findings of this study also support the traditional view of incremental internationalisation advanced by Stage Theory. Consequently, the findings imply that International New Venture Theory, which supports born‐global or leap‐frog approach in internationalising SMEs, is not appropriate for Indonesian context. Finally, this study also supports the Network Perspective which suggests that the relationships built by firms with other businesses, community leaders, and government have significant effect on internationalisation of SMEs. Overall, this study demonstrates the unique effect of different organisational capitals (i.e. human and social) as key resources for facilitating internationalisation.

Prior studies mostly focus on the outcomes of realized strategies in the strategic management literature. Very few of them examine how strategies are developed, what affects the firm's strategic orientation, and how strategic orientation affects firm's innovation performance. As key factor, top managers provide guidelines and directions for firm's pivotal strategy decisions. Despite the fact that most strategic orientations are initiated at the top management team (TMT) level, very little is understood about how the TMT diversity influences the strategic orientations. Based on the literature review, this paper summarizes the research achievement of TMT diversity and Strategic orientation. According to the major research direction and the major flaw in prior study, we propose a research framework among TMT diversity, strategic orientation, and innovation performance. Finally, we discuss implications for theory and practice.

Patent strategy is increasingly recognized as a vital contributor in promoting core competitiveness of an enterprise. A top management team (TMT) has been indicated as one of the key factors driving changes in patent strategy. Based on upper echelons theory, this study examines how TMT characteristics, including, team diversity, emotional intelligence, and safety climate, influence enterprise patent strategic change and, hence, the business outcome. The data from 930 top managers in 228 enterprises showed that the changes in patent strategies are significantly influenced by the characteristics of top managers. These aforementioned internal TMT factors have diverse effects on the speed and scope of the enterprise patent strategic change, which in turn affects firm performance in a positive and negative way, respectively.

PurposeThis paper aims to examine the presence of an executive with customer experience (ECE) in a supplier firm’s top management team (TMT). The role of ECE presence remains understudied in the marketing literature. This study attempts to examine the relationship between ECE presence and firm performance.Design/methodology/approachThis paper draws on the resource-based view of the firm and adopts a panel firm fixed effects estimator to test the proposed hypotheses. The empirical analysis uses a sample of 1,974 firm-year observations with 489 unique supplier firms. Selection-induced endogeneity is mitigated through the Heckman procedure.FindingsECE presence improves firm performance. Additionally, firms benefit less from ECE presence if a board member with customer experience (BCE) is also present, if a chief executive officer commands a higher pay slice (compared to other executives), and if a TMT is more functionally diversified. However, ECE presence is particularly beneficial if the overall economy is in contraction. Comparing the functional positions held by ECEs reveals that ECE in the marketing function (as a chief marketing officer) offers the largest benefit to an average supplier firm. ECE presence is also associated with other firm outcomes (e.g. bankruptcy odds, innovation and customer orientation).Research limitations/implicationsThis study makes four contributions to the literature. First, this research contributes to existing studies that investigate marketing expertise in the upper corporate pyramid. Second, the study contributes to the burgeoning body of work across business disciplines that attempt to understand the impact of CxOs on firm performance. Third, the study contributes to the vast literature on customer orientation indirectly. Finally, this paper contributes to the broader literature studying the influence of board and TMT characteristics.Practical implicationsThe findings are of particular importance to business-to-business firms. This paper shows that suppliers can benefit significantly from managers with customer experience. Four contingency factors moderate the relationship between ECE presence and firm performance. Among the various functional positions held by an ECE, the findings suggest that hiring an ECE for the marketing functional area is the most beneficial. ECE stands out as a better option for a company than BCE to improve firm performance. ECE presence is also associated with bankruptcy odds, innovation and customer orientation.Originality/valueThis paper provides the first empirical evidence regarding how ECE affects firm performance and also extends prior research on the value of human capital in TMT.

The aim of this study is to explore innovation in creative services industry, with a focus on the multidimensional nature of creative innovation and on its key determinants. Policy makers, managers as well as academics, have devoted an increasing attention to the creative industries. However, the focus has been on cultural organizations, while, with few exceptions, the creative services and the complex innovation processes therein have been neglected. In order to contribute to this area of research, we conducted an empirical qualitative and inductive analysis, and through the in-depth examination of a single case study, we defined a two-stage conceptual framework and some theoretical propositions to stimulate further research in the field of innovation in creative services. For testing our model, we selected the case of Mad Entertainment, a small and young Italian animation studio, based in Naples and awarded as best European producer in 2014. In the same year, thanks to its first animated feature film, The Art of Happiness, Mad won the European Film Award. In our two-stage model, we explain creative innovation as the interplay of four different and related dimensions: expressive, strategic, experiential and organizational innovation. Each dimension of the model involves different actors: the users, the audience, the competitors, and the creative team. Then, in the second stage, we highlight the effects of four critical determinants - organizational creativity, resource heterogeneity, combination of internal and external resources, and localization choices - on the strategies and performances of the innovation processes in creative services. Finally, along with theoretical implications and recognizing the limits of our research, we draw some suggestions for managers and policy makers.

While usually argued to be improving firm performance, the effect of top management team (TMT) functional diversity on firm performance is mixed. Bridging the TMT diversity, team adaptation, and threat-rigidity literature, we present a contingency model in which the relationships between intrapersonal functional diversity (at both CEO and TMT levels) and adaptive firm performance depend on the CEO–TMT power gap and severity of threat. To test our hypotheses, 270 firms, which have been severely affected due to the COVID-19 pandemic, were selected from China's A-share listed companies. Multiple regression analyses have shown that a moderation of CEO intrapersonal functional diversity's effect on adaptive firm performance by the CEO–TMT power gap is moderated by the severity of threat. However, no significant main or interaction effect of TMT intrapersonal functional diversity was found. The findings of this study have implications for the recovery or improvement of firm performance in threat situations.

PurposeThis study aims to bridge the gap between firms' internationalization speed research and the emerging study of the interface of a top management team (TMT) and a middle management team (MMT). Accordingly, this study examines the effect of TMT output function and the moderating effect of similarity between TMT and MMT in functional background and international experience on internationalization speed.Design/methodology/approachA two-way fixed-effects approach is used to analyze a dataset of 1,040 observations.FindingsThe results suggest that an output-oriented TMT tends to promote rapid internationalization and that MMT members who are similar with TMT members in functional backgrounds and international experience may be more inclined to support and facilitate internationalization speed advocated by TMT.Originality/valueThis study highlights the importance of demographic similarity between TMT and MMT in speeding up a firm's international expansion, thus advancing the notion that demographic similarity may align the perspectives and perceptions among multi-echelons, leading to consensus on strategy development.

This case describes the top management team’s transfer of power and change in the Wuhan Company of Zhong Yin Real Estate Group (ZY-REG). The company experienced acquisition of Haitian and ZY-REG, introduction of the Wanke management team, the general manager’s loss of control over the company, aggravating conflicts among executives, and abuse of power by a clique of managers. The new general manager Yang Ling took actions to reform and transferred power and responsibilities of each executive in the management team, withdrew power from his opponents, and standardized the decision-making process. The management team’s rebuilding was finally completed in June 2008, and the Wuhan Company was then back on track soon after.

In this article, we examine the concept of humility among chief executive officers (CEOs) and the process through which it is connected to integration in the top management team (TMT) and middle managers’ responses. We develop and validate a comprehensive measure of humility using multiple samples and then test a multilevel model of how CEOs’ humility links to the processes of top and middle managers. Our methodology involves survey data gathered twice from 328 TMT members and 645 middle managers in 63 private companies in China. We find CEO humility to be positively associated with empowering leadership behaviors, which in turn correlates with TMT integration. TMT integration then positively relates to middle managers’ perception of having an empowering organizational climate, which is then associated with their work engagement, affective commitment, and job performance. Findings confirm our hypotheses based on social information processing theory: humble CEOs connect to top and middle managers through collective perceptions of empowerment at both levels. Qualitative data from interviews with 51 CEOs provide additional insight into the meaning of humility among CEOs and differences between those with high and low humility.

As observed from the reviewed literature, the execution of research and development (R and D) projects in Nigeria is challenged by many social, political and economic factors interacting in complex and dynamic ways. This interaction is reflected in the history of science and technology in Nigeria, its culture, legal systems, institutional frameworks and social capital. The economic and social development of Nigeria is critically dependent upon the ability to establish a competitive, productive and efficient industrial sector built on a strong technology base. This implies that her natural resources must be developed and utilised as inputs to industrial production and as direct products to improve the life of the population. Public research organisations (PROs) are considered to be critical to the survival of industries and to the achievement of self-reliance through the use of locally available raw materials. This thesis explores the application of strategic project management (SPM) practices in the execution of R and D projects in PROs in Nigeria. The research employed a mixed method of quantitative and qualitative research in order to capture the experiences of project management practitioners with SPM practices in PROs in Nigeria. Although areas of variations in practice were identified, the major findings highlighted that there was a gap in the practical implementation of SPM. The findings also revealed key determinants associated with the implementation of SPM and the factors that affected its application in PROs in Nigeria. The research findings were further synthesised into a framework, capturing ten key dimensions that must be taken into account in the execution of research and development projects. The determinants include having a project-based organisational structure, top management involvement in the project execution, strategic project leadership style, the appointment of a project team, the project team's competence, project alignment with organisational strategy, project prioritisation and selection, maximising R and D strategy, the project management process, and the SPM process. The framework validation was a follow-up discussion, which was conducted with project management practitioners in the selected research organisations in Nigeria. Reflecting on their experiences in the management of R and D projects, the participants acknowledged that the proposed SPM framework and its ten key variables were fundamental to the effective execution of R and D projects in PROs in Nigeria. It was concluded that the use of such a framework would highlight areas that needed to be addressed in order to achieve effective execution of R and D projects in these organisations.

With increasing dependence on information technology and information system, enterprises are confronting with a more and more complicated information security environment. Thus, information security has become an intractable problem for many enterprises. Generally speaking, there are two methods to improve enterprises’ information security level, that is, technology and management means. Technology means mainly settle software and hardware security of computers and networks, while management means mainly regulate and restrain the entire enterprise system including software, hardware, and employees. At present, a lot of enterprises mostly employ the technology means to solve information security problems. However, the lack or imperfection of information security institutions leads to bad enterprise information security situation. Therefore, technology and management means to solve information security are complementary to each other. As such, it is urgent and necessary to establish and improve information security institutions for many enterprises. In fact, enterprise information security is a complicated activity which needs different sectors to get involved in. More specifically, the information security departments play the very critical role in the implementation of information security institutions, and all employees should comply with the information security policy. Therefore, only the top management teams have the ability to coordinate the relationship between different departments, determine the introduction of information technology, and deploy the information systems. In response, top management support has an important impact on the construct of information security institutions and the effectiveness of information security management. So far, few studies have investigated the mechanism that how top management support affects information security legitimation, and legitimation information security management. Therefore, it has great theoretical and practical significance to the exploration of whether the legitimation supported by top management can improve the effectiveness of information security management. The objective of the current study is to explore whether legitimation prompted by top management team can improve the effectiveness of enterprise information security management. By doing so, the data was collected from the enterprises which have passed the certification of information security management system, and analyzed by using PLS-SEM. The results indicate that information security awareness can improve top management support（including top management belief and top management participation）and the effectiveness of information security management respectively. In addition, top management belief can improve implementation（the first stage of legitimation）and internalization（the second stage of legitimation）. Moreover, implementation can improve the effectiveness of information security management. This paper analyzes the way to enhance effectiveness of information security management, which has a reality-oriented meaning for prompting information security management of enterprises from the standpoint of institution.

Will the top managers’ attention to financial goals such as profit targets, operating expenses or debt payback schedule affect the firm’s innovation investment? The purpose of this study was to examine the relationship between the attention that the top management team (TMT) allocate on financial goals and R&D investment in Chinese firms. The roles of ownership type and company size as moderating effects in the relationship were also analyzed. This study used a panel dataset of 484 firms listed on the Shanghai Stock Exchange from 2010 to 2014. The results show that TMT’s attention to monetary objectives was negatively related to the R&D investment. In the state-owned and large-scale enterprises, the negative relationship between the TMT’s financial orientation and R&D investment is weak compared to that in private companies and smaller enterprises, respectively. Several conclusions have been drawn. First, the attention paid by TMT to financial goals significantly affects the innovation investment of the company. Specifically, when executives press the importance of monetary targets, they reduce innovation investment, given that the effects of firm-specific characteristics are controlled. Second, corporate ownership significantly moderates the relationship. Given the same degree of attention bias toward financial targets, compared with those in private companies, executives in state-owned companies tend to be more willing to invest in corporate innovation activities. Third, as the size of the company increases, the company’s comprehensive strength and ability to resist risks would increase, which in turn raises the willingness to undertake high-cost and long-term-to-realize-benefit innovation activities, thus alleviating the effect of TMT’s pressure on financial performance.

Top management team faultlines and firm performance: Examining the CEO-TMT interface