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How top management team diversity affects innovativeness and performance via the strategic choice to focus on innovation fields


Salomoh, Sören; Talke, Katrin; Rost, Katja (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.

Abstract

Past innovation research has largely neglected potential effects of corporate governance issues on strategic choices, and thereby on innovation management outcomes. The theory of upper echelon implies that strategic choices result from idiosyncrasies of top management teams (TMT). Building on this theory, we hypothesize that TMT diversity enhances firm performance by facilitating an innovation strategy that increases the firm's new product portfolio innovativeness. Our findings support the relevance of considering a corporate governance view for explaining innovation outcomes. Empirically, we can show that TMT diversity has a strong impact on the strategic choice of firms to focus on innovation fields. Such focus then drives new product portfolio innovativeness and firm performance. As corporate governance arrangements thus seem relevant in the context of innovation management, we can derive implications for both policy makers and innovation researchers.

Keywords: Theory of upper echelon; TMT diversity; Innovation strategy; Corporate governance; New product portfolio innovativeness

Abstract

Past innovation research has largely neglected potential effects of corporate governance issues on strategic choices, and thereby on innovation management outcomes. The theory of upper echelon implies that strategic choices result from idiosyncrasies of top management teams (TMT). Building on this theory, we hypothesize that TMT diversity enhances firm performance by facilitating an innovation strategy that increases the firm's new product portfolio innovativeness. Our findings support the relevance of considering a corporate governance view for explaining innovation outcomes. Empirically, we can show that TMT diversity has a strong impact on the strategic choice of firms to focus on innovation fields. Such focus then drives new product portfolio innovativeness and firm performance. As corporate governance arrangements thus seem relevant in the context of innovation management, we can derive implications for both policy makers and innovation researchers.

Keywords: Theory of upper echelon; TMT diversity; Innovation strategy; Corporate governance; New product portfolio innovativeness

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67 citations in Web of Science®
74 citations in Scopus®
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Additional indexing

Item Type:Journal Article, refereed, original work
Communities & Collections:03 Faculty of Economics > Department of Business Administration
Dewey Decimal Classification:330 Economics
Date:2010
Deposited On:04 Mar 2011 12:32
Last Modified:10 Dec 2017 06:41
Publisher:Elsevier
ISSN:0048-7333
Publisher DOI:https://doi.org/10.1016/j.respol.2010.04.001
Official URL:http://www.sciencedirect.com/science/journal/00487333

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