Hostname: page-component-586b7cd67f-rdxmf Total loading time: 0 Render date: 2024-11-26T00:09:59.721Z Has data issue: false hasContentIssue false
  • English
  • Français

Let's explore with a divided team! The effects of top management team demographic faultlines on technological exploration

Published online by Cambridge University Press:  20 December 2019

Mengge Li Open the ORCID record for Mengge Li [Opens in a new window]  and
Kun (Carl) Liu
Mengge Li*
Affiliation:
Department of Marketing & Management, College of Business Administration, The University of Texas at El Paso, 500 W. University Avenue, El Paso, TX 79968, USA
Kun (Carl) Liu
Affiliation:
Department of Marketing and Entrepreneurship, College of Business Administration, Kent State University, 475 Terrace Drive, Kent, OH 44242, USA
*
*Corresponding author. Email: [email protected]
Get access Rights & Permissions [Opens in a new window]

Abstract

Research on top management team (TMT) diversity suggests that diverse backgrounds improve technological exploration. However, this diversity may also cause demographic faultlines that break a team into subgroups and undermine team performance, and the status difference between CEO and top managers may change inter-subgroup dynamics. We predicted that TMT faultline had an inverted U-shape relationship with technological exploration. Further, we predicted that the effects of TMT faultline were more prominent when the CEO is in the minority subgroup than when the CEO was in the majority subgroup. Using a longitudinal sample from the US IT services industry, the results found that TMT faultline exhibited an inverted U-shape relationship with technological exploration only when the CEO was in the minority subgroup, and such relationship disappeared when the CEO was in the majority subgroup.

Keywords

top management teamCEOfaultlinesheterogeneityinnovationexploration
Type
Research Article
Information
Journal of Management & Organization , Volume 28 , Issue 6 , November 2022 , pp. 1181 - 1200
Copyright
Copyright © Cambridge University Press and Australian and New Zealand Academy of Management 2019

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Agarwal, R., Ganco, M., & Ziedonis, R. H. (2009). Reputations for toughness in patent enforcement: Implications for knowledge spillovers via inventor mobility. Strategic Management Journal, 30(13), 1349–1374.CrossRefGoogle Scholar
Ahuja, G., & Lampert, C. M. (2001). Entrepreneurship in the large corporation: A longitudinal study of how established firms create breakthrough inventions. Strategic Management Journal, 22(6–7), 521–543.CrossRefGoogle Scholar
Ahuja, G., Lampert, C. M., & Tandon, V. (2008). Moving beyond Schumpeter: Management research on the determinants of technological innovation. Academy of Management Annals, 2, 1–98.CrossRefGoogle Scholar
Aiken, L. S., & West, S. G. (1991). Multiple regression: Testing and interpreting interactions. Thousand Oaks, CA: Sage.Google Scholar
Bantel, K. A., & Jackson, S. E. (1989). Top management and innovations in banking: Does the composition of the top team make a difference? Strategic Management Journal, 10, 107–124.CrossRefGoogle Scholar
Barkema, H. G., & Shvyrkov, O. (2007). Does top management team diversity promote or hamper foreign expansion? Strategic Management Journal, 28(7), 663–680.CrossRefGoogle Scholar
Benner, M. J., & Tushman, M. L. (2002). Process management and technological innovation: A longitudinal study of the photography and paint industries. Administrative Science Quarterly, 47(4), 676–706.CrossRefGoogle Scholar
Benner, M. J., & Tushman, M. L. (2003). Exploitation, exploration, and process management: The productivity dilemma revisited. Academy of Management Review, 28(2), 238–256.CrossRefGoogle Scholar
Bessen, J., & Hunt, R. M. (2007). An empirical look at software patents. Journal of Economics & Management Strategy, 16(1), 157–189.Google Scholar
Bezrukova, K., Jehn, K. A., Zanutto, E. L., & Thatcher, S. M. B. (2009). Do workgroup faultlines help or hurt? A moderated model of faultlines, team identification, and group performance. Organization Science, 20(1), 35–50.CrossRefGoogle Scholar
Bezrukova, K., Thatcher, S. M., & Jehn, K. A. (2007). Group heterogeneity and faultlines: Comparing alignment and dispersion theories of group composition. In Behfar, K. J. & Thompson, L. L. (Eds.), Conflict in organizational groups: New directions in theory and practice (pp. 57–92). Evanston, IL: Northwestern University Press.Google Scholar
Bonesso, S., Comacchio, A., & Pizzi, C. (2011). Technology sourcing decisions in exploratory projects. Technovation, 31(10), 573–585.CrossRefGoogle Scholar
Bower, J. L. (1972). Managing the resource allocation process: A study of corporate planning and investment. Boston, MA: Harvard University Press.Google Scholar
Burk, D. L., & Lemley, M. A. (2002). Is patent law technology-specific? Berkeley Technology Law Journal, 17(4), 1155–1206.Google Scholar
Buyl, T., Boone, C., Hendriks, W., & Matthyssens, P. (2011). Top management team functional diversity and firm performance: The moderating role of CEO characteristics. Journal of Management Studies, 48(1), 151–177.CrossRefGoogle Scholar
Camelo-Ordaz, C., García-Cruz, J., & Sousa-Ginel, E. (2014). The influence of top management team conflict on firm innovativeness. Group Decision and Negotiation, 24(6), 957–980.CrossRefGoogle Scholar
Cannella, A. A., Park, J.-H., & Lee, H.-U. (2008). Top management team functional background diversity and firm performance: Examining the roles of team member colocation and environmental uncertainty. Academy of Management Journal, 51(4), 768–784.Google Scholar
Cardinal, L. B., & Hatfield, D. E. (2000). Internal knowledge generation: The research laboratory and innovative productivity in the pharmaceutical industry. Journal of Engineering and Technology Management, 17(3–4), 247–271.CrossRefGoogle Scholar
Caridi-Zahavi, O., Carmeli, A., & Arazy, O. (2016). The influence of CEOs’ visionary innovation leadership on the performance of high-technology ventures: The mediating roles of connectivity and knowledge integration. Journal of Product Innovation Management, 33(3), 356–376.CrossRefGoogle Scholar
Chen, W.-R., & Miller, K. D. (2007). Situational and institutional determinants of firms’ R&D search intensity. Strategic Management Journal, 28(4), 369–381.CrossRefGoogle Scholar
Chen, Y., Tang, G., Jin, J., Xie, Q., & Li, J. (2014). CEOs’ transformational leadership and product innovation performance: The roles of corporate entrepreneurship and technology orientation. Journal of Product Innovation Management, 31, 2–17.CrossRefGoogle Scholar
Choi, J. N., & Sy, T. (2010). Group-level organizational citizenship behavior: Effects of demographic faultlines and conflict in small work groups. Journal of Organizational Behavior, 31(7), 1032–1054.Google Scholar
Cohen, W. M. (2010). Fifty years of empirical studies of innovative activity and performance. In Hall, B. H. & Rosenberg, N. (Eds.), Handbook of the economics of innovation (Vol. 1, pp. 129–213). Amsterdam, Netherlands: North-Holland.CrossRefGoogle Scholar
Cyert, R. M., & March, J. G. (1963). A behavioral theory of the firm. Englewood Cliffs, NJ: Prentice Hall.Google Scholar
Enkel, E., Heil, S., Hengstler, M., & Wirth, H. (2017). Exploratory and exploitative innovation: To what extent do the dimensions of individual level absorptive capacity contribute? Technovation, 60–61, 29–38.CrossRefGoogle Scholar
Erickson, T. J., & Gratton, L. (2007). Eight ways to build collaborative teams. Harvard Business Review, 11, 1–11.Google Scholar
Felekoglu, B., & Moultrie, J. (2014). Top management involvement in new product development: A review and synthesis. Journal of Product Innovation Management, 31(1), 159–175.CrossRefGoogle Scholar
Fieller, E. C. (1954). Some Problems in Interval Estimation. Journal of the Royal Statistical Society. Series B (Methodological), 16(2): 175–185.CrossRefGoogle Scholar
Finkelstein, S., & Hambrick, D. C. (1990). Top-management-team tenure and organizational outcomes: The moderating role of managerial discretion. Administrative Science Quarterly, 35(3), 484–503.CrossRefGoogle Scholar
Fosfuri, A., Giarratana, M. S., & Luzzi, A. (2008). The penguin has entered the building: The commercialization of open source software products. Organization Science, 19(2), 292–305.CrossRefGoogle Scholar
Gibson, C., & Vermeulen, F. (2003). A healthy divide: Subgroups as a stimulus for team learning behavior. Administrative Science Quarterly, 48(2), 202–239.CrossRefGoogle Scholar
Greve, H. R. (2003). A behavioral theory of R&D expenditures and innovations: Evidence from shipbuilding. Academy of Management Journal, 46(6), 685–702.CrossRefGoogle Scholar
Haans, R. F. J., Pieters, C., & He, Z.-L. (2016). Thinking about U: Theorizing and testing U- and inverted U-shaped relationships in strategy research. Strategic Management Journal, 37(7), 1177–1195.CrossRefGoogle Scholar
Hambrick, D. C. (1994). Top management groups: A conceptual integration and reconsideration of the ‘team’ label. Research in Organizational Behavior, 16, 171–213.Google Scholar
Hambrick, D. C., Cho, T. S., & Chen, M.-J. (1996). The influence of top management team heterogeneity on firms’ competitive moves. Administrative Science Quarterly, 41(4), 659–684.CrossRefGoogle Scholar
Hambrick, D. C., & Mason, P. A. (1984). Upper echelons: The organization as a reflection of its top managers. Academy of Management Review, 9(2), 193–206.CrossRefGoogle Scholar
Harrison, D. A., & Klein, K. J. (2007). What's the difference? Diversity constructs as separation, variety, or disparity in organizations. Academy of Management Review, 32(4), 1199–1228.CrossRefGoogle Scholar
Heavey, C., & Simsek, Z. (2013). Top management compositional effects on corporate entrepreneurship: The moderating role of perceived technological uncertainty. Journal of Product Innovation Management, 30(5), 837–855.CrossRefGoogle Scholar
Hinsz, V. B., Tindale, R. S., & Vollrath, D. A. (1997). The emerging conceptualization of groups as information processors. Psychological Bulletin, 121(1), 43–64.CrossRefGoogle ScholarPubMed
Hutzschenreuter, T., & Horstkotte, J. (2013). Performance effects of top management team demographic faultlines in the process of product diversification. Strategic Management Journal, 34(6), 704–726.CrossRefGoogle Scholar
Jones, C. D., Li, M., & Cannella, A. A. (2015). Responses to a governance mandate: The adoption of governance committees by NYSE firms. Journal of Management, 41(7), 1873–1897.CrossRefGoogle Scholar
Kor, Y. Y. (2006). Direct and interaction effects of top management team and board compositions on R&D investment strategy. Strategic Management Journal, 27(11), 1081–1099.CrossRefGoogle Scholar
Kor, Y. Y., & Mesko, A. (2013). Dynamic managerial capabilities: Configuration and orchestration of top executives’ capabilities and the firm's dominant logic. Strategic Management Journal, 34(2), 233–244.CrossRefGoogle Scholar
Lampe, R. (2010). Strategic citation. Review of Economics and Statistics, 94(1), 320–333.CrossRefGoogle Scholar
Lau, D. C., & Murnighan, J. K. (1998). Demographic diversity and faultlines: The compositional dynamics of organizational groups. Academy of Management Review, 23(2), 325–340.CrossRefGoogle Scholar
Lau, D. C., & Murnighan, J. K. (2005). Interactions within groups and subgroups: The effects of demographic faultlines. Academy of Management Journal, 48(4), 645–659.CrossRefGoogle Scholar
Lee, C.-Y., Wu, H.-L., & Pao, H.-W. (2014). How does R&D intensity influence firm explorativeness? Evidence of R&D active firms in four advanced countries. Technovation, 34(10), 582–593.CrossRefGoogle Scholar
Li, J., & Hambrick, D. C. (2005). Factional groups: A new vantage on demographic faultlines, conflict, and disintegration in work teams. Academy of Management Journal, 48(5), 794–813.CrossRefGoogle Scholar
Lin, H.-C., & Rababah, N. (2014). CEO–TMT exchange, TMT personality composition, and decision quality: The mediating role of TMT psychological empowerment. The Leadership Quarterly, 25(5), 943–957.CrossRefGoogle Scholar
Lind, J. T., & Mehlum, H. (2010). With or without U? The appropriate test for a U-shaped relationship. Oxford Bulletin of Economics and Statistics, 72(1), 109–118.CrossRefGoogle Scholar
Ling, Y., Simsek, Z., Lubatkin, M. H., & Veiga, J. F. (2008). Transformational leadership's role in promoting corporate entrepreneurship: Examining the CEO–TMT interface. Academy of Management Journal, 51(3), 557–576.CrossRefGoogle Scholar
Liu, K., Li, J., Hesterly, W., & Cannella, A. Jr. (2012). Top management team tenure and technological inventions at post-IPO biotechnology firms. Journal of Business Research, 65(9), 1349–1356.CrossRefGoogle Scholar
Luo, B. N., Lui, S., Liu, C.-H., & Zhang, R. (2016). Knowledge exploration and innovation: A review and an inverse S-curve proposition. Journal of Management & Organization, 39, 1–23.Google Scholar
Mokhber, M., Khairuzzaman, W., & Vakilbashi, A. (2017). Leadership and innovation: The moderator role of organization support for innovative behaviors. Journal of Management & Organization, 26, 1–21.Google Scholar
Nadkarni, S., & Chen, J. (2014). Bridging yesterday, today, and tomorrow: CEO temporal focus, environmental dynamism, and rate of new product introduction. Academy of Management Journal, 57(6), 1810–1833.CrossRefGoogle Scholar
Nadkarni, S., Chen, T., & Chen, J. (2016). The clock is ticking! Executive temporal depth, industry velocity, and competitive aggressiveness. Strategic Management Journal, 37(6), 1132–1153.CrossRefGoogle Scholar
Ndofor, H. A., Sirmon, D. G., & He, X. (2015). Utilizing the firm's resources: How TMT heterogeneity and resulting faultlines affect TMT tasks. Strategic Management Journal, 36(11), 1656–1674.CrossRefGoogle Scholar
Papadakis, V. M., & Barwise, P. (2002). How much do CEOs and top managers matter in strategic decision-making? British Journal of Management, 13(1), 83–95.CrossRefGoogle Scholar
Penner-Hahn, J., & Shaver, J. M. (2005). Does international research and development increase patent output? An analysis of Japanese pharmaceutical firms. Strategic Management Journal, 26(2), 121–140.CrossRefGoogle Scholar
Phelps, C. C. (2010). A longitudinal study of the influence of alliance network structure and composition on firm exploratory innovation. Academy of Management Journal, 53(4), 890–913.CrossRefGoogle Scholar
Pitcher, P., & Smith, A. D. (2001). Top management team heterogeneity: Personality, power, and proxies. Organization Science, 12(1), 1–18.CrossRefGoogle Scholar
Popp, D., Juhl, T., & Johnson, D. K. N. (2004). Time in purgatory: Examining the grant lag for U.S. patent applications. Topics in Economic Analysis & Policy, 4(1), 1–43.CrossRefGoogle Scholar
Prahalad, C. K., & Bettis, R. A. (1986). The dominant logic: A new linkage between diversity and performance. Strategic Management Journal, 7(6), 485–501.CrossRefGoogle Scholar
Qian, C., Cao, Q., & Takeuchi, R. (2013). Top management team functional diversity and organizational innovation in China: The moderating effects of environment. Strategic Management Journal, 34(1), 110–120.CrossRefGoogle Scholar
Quigley, T. J., & Hambrick, D. C. (2015). Has the ‘CEO effect’ increased in recent decades? A new explanation for the great rise in America's attention to corporate leaders. Strategic Management Journal, 36(6), 821–830.CrossRefGoogle Scholar
Revilla, A. J., & Fernández, Z. (2012). The relation between firm size and R&D productivity in different technological regimes. Technovation 32(11), 609–623.CrossRefGoogle Scholar
Rosenkopf, L., & Nerkar, A. (2001). Beyond local search: Boundary-spanning, exploration, and impact in the optical disk industry. Strategic Management Journal 22(4), 287–306.CrossRefGoogle Scholar
Rothaermel, F. T., & Thursby, M. (2005). Incubator firm failure or graduation?: The role of university linkages. Research Policy, 34(7), 1076–1090.CrossRefGoogle Scholar
Shi, W., Zhang, Y. A., & Hoskisson, R. E. (2018). Examination of CEO–CFO social interaction through language style matching: Outcomes for the CFO and the organization. Academy of Management Journal, 62(2): 383–414.CrossRefGoogle Scholar
Simsek, Z. (2007). CEO tenure and organizational performance: An intervening model. Strategic Management Journal, 28(6), 653–662.CrossRefGoogle Scholar
Smith, A., Houghton, S. M., Hood, J. N., & Ryman, J. A. (2006). Power relationships among top managers: Does top management team power distribution matter for organizational performance? Journal of Business Research, 59(5), 622–629.CrossRefGoogle Scholar
Stasser, G. (1999). The uncertain role of unshared information in collective choice. In Thompson, L., Levine, J. & Messick, D. (Eds.), Shared cognition in organizations (pp. 49–69). Mahwah, NJ: Lawrence Eribaum.CrossRefGoogle Scholar
Talke, K., Salomo, S., & Kock, A. (2011). Top management team diversity and strategic innovation orientation: The relationship and consequences for innovativeness and performance. Journal of Product Innovation Management, 28(6), 819–832.CrossRefGoogle Scholar
Talke, K., Salomo, S., & Rost, K. (2010). How top management team diversity affects innovativeness and performance via the strategic choice to focus on innovation fields. Research Policy, 39(7), 907–918.CrossRefGoogle Scholar
Thatcher, S. M. B., Jehn, K. A., & Zanutto, E. (2003). Cracks in diversity research: The effects of diversity faultlines on conflict and performance. Group Decision and Negotiation, 12(3), 217–241.CrossRefGoogle Scholar
Tien, C., Chen, C.-N., & Chuang, C.-M. (2013). A study of CEO power, pay structure, and firm performance. Journal of Management & Organization, 19(4), 424–453.CrossRefGoogle Scholar
Turner, J. C. (1985). Social categorization and the self-concept: A social cognitive theory of group behavior. In Lawler, E. J. (Ed.), Advances in group processes: Theory and research (Vol. 2, pp. 77–122). Greenwich, CT: JAI Press.Google Scholar
van Knippenberg, D., Dawson, J. F., West, M. A., & Homan, A. C. (2011). Diversity faultlines, shared objectives, and top management team performance. Human Relations, 64(3), 307–336.CrossRefGoogle Scholar
Vuori, T. O., & Huy, Q. N. (2016). Distributed attention and shared emotions in the innovation process: How Nokia lost the smartphone battle. Administrative Science Quarterly, 61(1), 9–51.CrossRefGoogle Scholar
Wiersema, M. F., & Bantel, K. A. (1992). Top management team demography and corporate strategic change. Academy of Management Journal, 35(1), 91–121.CrossRefGoogle Scholar
Wu, S., Levitas, E., & Priem, R. L. (2005). CEO tenure and company invention under differing levels of technological dynamism. Academy of Management Journal, 48(5), 859–873.CrossRefGoogle Scholar
Xie, X.-Y., Wang, W.-L., & Qi, Z.-J. (2015). The effects of TMT faultline configuration on a firm's short-term performance and innovation activities. Journal of Management & Organization, 21(5), 558–572.CrossRefGoogle Scholar
Yucel, I., McMillan, A., & Richard, O. C. (2014). Does CEO transformational leadership influence top executive normative commitment? Journal of Business Research, 67(6), 1170–1177.CrossRefGoogle Scholar