Top Team Diversity,Internationalization and the Mediating Effect of International Alliances*

This study examines the mediating effect of international alliances for the relationship between TMT (top management team) job‐related diversity (educational, functional background, outside industry experience and international exposure) and firm internationalization. We argue that firms with greater TMT diversity will use more international alliances, resulting in higher firm internationalization. Based on a sample of 226 US firms during the period 1988–1994, we find that international alliances partially mediate the relationship between TMT international exposure diversity and firm internationalization. However, we do not find international alliances to mediate the relationships between other forms of TMT diversity and firm internationalization. We discuss implications and directions for future research.     

The Contingent Effect of TMT International Experience on Firms’ Internationalization Speed

Drawing on upper echelons theory, we argue that there will be an inverted U‐curve‐shaped relationship between the top management team's (TMT's) level of international experience and a firm's internationalization speed. Accounting for the role of executive job demands highlighted in upper echelons theory, we further suggest that competitive pressure, product diversification and geographic scope moderate the relationship between TMT international experience and internationalization speed by increasing the demands of TMT managers’ jobs. Using data on the international expansion of 91 retailers between 2003 and 2012, we find empirical support for the inverted U‐curve‐shaped effect of TMT international experience and the moderating role of competitive pressure. We find no moderating effect of product diversification or geographic scope.     

Twice as Smart? The Importance of Managers’ Formative‐Years’ International Experience for their International Orientation and Foreign Acquisition Decisions

This study examined how top management team's (TMT) international orientation influences perceptions of environmental uncertainty and how these perceptions impact international strategic decisions, in particular regarding ownership stakes taken in foreign acquisitions. We highlighted the need for the concept of TMT international orientation to encompass executives’ formative‐years’ international experiences along with their international career experiences and nationalities. Empirical tests based on a sample of 2122 international acquisitions completed by 561 UK firms over the period 1999–2008 showed that TMT international orientation positively moderated the negative impact of cultural differences and host country risk on acquisition ownership stakes. The results underscored the importance of considering decision‐makers’ attributes due to their experiences at a young age, beyond their demographic characteristics or professional experience, in the context of international strategic choices. We also discussed some implications of one of the possible consequences of executives’ formative international experience, namely biculturalism, for international business.     

私营企业的企业家背景、多元化战略与企业业绩

本文运用"高阶理论"考察了私营企业的企业家背景、多元化战略选择以及企业业绩之间的关系.研究发现,与低学历的、年长的、创业前没有"企业负责人"经历的企业家相比,高学历的、年轻的以及创业之前曾担任过"企业负责人"的企业家更倾向于选择多元化战略.研究也发现,高学历、低年龄、"企业负责人"经历与高的销售额、资产额、资产增长率和净资产增长率正相关;多元化战略能够带来更大的资产规模、更高的资产增长率和净资产增长率,但对利润率没有显著的影响.同时,企业家的背景与多元化战略的交互作用同样影响着企业的业绩.创业前有过"企业负责人"经历的企业家采用多元化战略可以带来更好的业绩,而没有这种经历的企业家则会收到负面的效果.有意思的是,高学历和低学历的企业家采用多元化战略都提高了企业的销售额、资产额和净资产增长率,而中等学历的企业家采取多元化战略则带来了相反的效果.本文最后对该现象的可能原因进行了探讨.     

Top Management Team Internationalization and Firm-level Internationalization: The Moderating Effects of Home-region Institutional Diversity and Firm Global Focus

The factors that determine firms' levels of internationalization remain a focal area of international business research. Within this research stream, studies building on the upper echelons theory have investigated the influence of the demographic characteristics of the top management team (TMT) on firms' international expansion. However, the literature to date has overlooked the TMT's overall degree of internationalization as a key driver of firm-level internationalization. In our paper, we argue that by having self-selected into careers abroad, foreign TMT members by definition have a higher cognitive tolerance of foreignness than domestic TMT members do. We theorize that foreign TMT members' higher cognitive tolerance for foreignness enhances the overall TMT's level of international attention and international trust, thereby facilitating strategic decisions that favor firm-level internationalization. Additionally, we propose two key contingencies that attenuate this relationship: the institutional diversity of the firm's home region and the firm's global focus. Analysis of Fortune Global 500 firms supports the hypothesized relationship between TMT internationalization and firm-level internationalization, as well as the two moderation effects.     

Economic Liberalization and the Antecedents of Top Management Teams: Evidence From Turkish ‘Big’ Business

There has been an increased interest in the last two decades in top management teams (TMTs) of business firms. Much of the research, however, has been US‐based and concerned primarily with TMT effects on organizational outcomes. The present study aims to expand this literature by examining the antecedents of top team composition in the context of macro‐level economic change in a late‐industrializing country. The post‐1980 trade and market reforms in Turkey provided the empirical setting. Drawing upon the literatures on TMT and chief executive characteristics together with punctuated equilibrium models of change and institutional theory, the article develops the argument that which firm‐level factors affect which attributes of TMT formations varies across the early and late stages of economic liberalization. Results of the empirical investigation of 71 of the largest industrial firms in Turkey broadly supported the hypotheses derived from this premise. In the early stages of economic liberalization the average age and average organizational tenure of TMTs were related to the export orientation of firms, whereas in later stages, firm performance became a major predictor of these team attributes. Educational background characteristics of teams appeared to be under stronger institutional pressures, altering in different ways in the face of macro‐level change.     

International Diversification,Business Group Affiliation and Firm Performance: Empirical Evidence from India*

We investigate the impact of business group affiliation on the relationship between international diversification and firm performance for emerging economy firms. We develop the theoretical arguments based on an integration of the literature on international diversification with the institutional theory perspective. We argue for a U‐shaped relationship between international diversification and firm performance, and suggest that a firm's affiliation to a business group moderates the relationship between international diversification and firm performance. Based on a sample of Indian firms, we find that firm performance is positively related to the degree of internationalization, while business group affiliation reduces the positive effect of internationalization on firm performance.     

Technological Diversification and Organizational Divisionalization: The Moderating Role of Complementary Assets

This study uses data on 582 electronics and information technology firms in Taiwan for the period 1997–2005 to investigate the hypothesis that technological diversification increases the extent of organizational divisionalization under firm growth. This study applies competence‐based theory to argue that firms spread the technological competence base to achieve firm growth. However, in the face of firm growth, managers of multi‐technology firms often utilize a multi‐division structure to manage their various technologies based on their operating characteristics or needs. Furthermore, the findings of this study indicate that complementary assets moderate the negative relationship between technological diversification and organizational divisionalization. For firms with specialized complementary assets, multi‐technology firms may be observed to consolidate related‐technology activities into fewer divisions, facilitating the utilization of these complementary assets in conjunction with other divisions.     

Top Management Team Members’ Decision Influence and Cooperative Behaviour: An Empirical Study in the Information Technology Industry

Organizational leadership is generally distributed between the chief executive officer (CEO) and the top management team (TMT) members. Building on this observation, we present an empirical investigation of the cues for CEOs to delegate decision‐making influence to particular TMT members. In the literature, explanations both based on expertise and driven by similarity are described. In this study, we reconcile both explanations by examining the moderating role of the TMT's level of ‘cooperative behaviour’ (collaboration and information exchange). We analyse when and in what circumstances TMT members’ expertise and similarity to the CEO regarding his/her functional background and/or locus‐of‐control predict their decision‐making influence. We postulate that TMT cooperative behaviour will advance the effect of expertise on TMT members’ decision influence but impede the effect of similarity to the CEO. Our hypotheses are tested on a data set of 135 TMT members from 32 Dutch and Belgian information technology firms. Overall, we find that our proposed research model is confirmed for technology‐oriented decisions. Furthermore, we draw exploratory conclusions about the effect of TMT cooperative behaviour on the systematic distribution of decision influence in TMTs.     

The Impact of Stakeholder Management on Corporate International Diversification

This article explores the relationship between stakeholder management and international diversification. We differentiate between strengths and concerns in stakeholder management to demonstrate the differential effects of the two aspects of stakeholder management. Previous research on stakeholder theory often focuses on the importance of stakeholder relations, trying to build a business case of relational capital that results from strong stakeholder management. Such a relational approach, however, overlooks the process of managing stakeholders, a process that allows firms with strengths in stakeholder management to develop an important capability of managing tensions. In this study, we argue that this capability, an inherent part of stakeholder management, can be critical when firms face increased complexity during the process of international diversification. We therefore propose that strengths in stakeholder management are positively related to international diversification, while concerns in stakeholder management are negatively related to international diversification. Using panel data for 169 US multinational firms over a 10‐year period, we find support that strengths in stakeholder management facilitate international diversification. We discuss the contributions of our findings to stakeholder theory and international business research.     

International Experience in International Business Research: A Conceptualization and Exploration of Key Themes

International experience, the experience that firms accrue from operating internationally, is a key concept in explaining firm internationalization. This paper reviews the conceptualization of international experience in the international business literature. It highlights how prior research has identified three dimensions of the international experience construct (length, scope and diversity), thereby demonstrating that international experience should be treated as a multidimensional construct. In addition, intensity is presented as a fourth and novel dimension of international experience. The importance of this multidimensional conceptualization is highlighted in an explanation of why the international diversification and international experience constructs are not synonymous. In light of the importance of international experience in explaining firm internationalization, the authors explore how the source of the firm's international experience will determine the limits to its application in foreign markets. In particular, the authors distinguish between location‐bound international experience and non‐location‐bound international experience as sources of firm‐specific advantages (FSAs). The FSAs that the firm develops from its experience with equity and non‐equity entry modes are presented as examples of specific FSAs developed within the firm's bundle of FSAs concerning internationalization. The paper concludes with some implications of the conceptualization of international experience for several issues of international business research as well as providing managerial implications.     

Top management team characteristics and digital innovation: Exploring digital knowledge and TMT interfaces

On their journey toward digital transformation, industrial firms need to embrace digital innovation. The top management team (TMT) is expected to set the course for digital innovation, which is a challenging endeavour given the novel and cross-functional nature of digital innovation. We draw on role theory to make sense of emerging role requirements for the TMT and combine this view with upper echelon theory to hypothesize on the specific TMT characteristics that are needed for digital innovation. We first theorize that firms could benefit from TMT digital knowledge. Second, we argue that the effective utilization of TMT digital knowledge can be fostered at internal TMT interfaces, such as between the chief executive officer (CEO), respectively a chief digital officer (CDO), and other top managers. Finally, we consider the TMT hierarchical structure as a contextual factor in the stimulation of TMT integration processes by integrative CEOs and CDOs. We employ panel data regressions to a longitudinal dataset of US industrial firms and find a positive relation between TMT digital knowledge and digital innovation, on average. We additionally find evidence for the integrative roles of CEOs and CDOs. However, our findings also indicate that the CDO's integrating role can be hampered by a strong hierarchical structure in the TMT.     

Understanding Drivers of Risk‐Adjusted Performance for Service Firms with International Operations*

This article investigates whether international operations of service firms increase performance while reducing risk. The article draws on a longitudinal dataset of 584 internationally operating service firms from the United States. Analysis indicates that international diversification is negatively related to risk‐adjusted performance. However, it is established that international diversification interacts with internationalization and positively influences risk‐adjusted performance. This finding offers significant promise for firms, as it indicates that international operations (if managed well), through exposure to varied foreign markets coupled with adequate global scope, can lead to firms’ increased risk‐adjusted performance. The results provide a mechanism for decision‐makers to better understand international operations of service firms and present a strategy for achieving success in international markets by effectively managing two important levers: internationalization and international market diversification.     

Essential Micro‐foundations for Contemporary Business Operations: Top Management Tangible Competencies,Relationship‐based Business Networks and Environmental Sustainability

Although various studies have emphasized linkages between firm competencies, networks and sustainability at organizational level, the links between top management tangible competencies (TMTCs) (e.g. contemporary relevant quantitative‐focused education such as big data analytics and data‐driven applications linked with the internet of things, relevant experience and analytical business applications), relationship‐based business networks (RBNs) and environmental sustainability have not been well established at micro‐level, and there is a literature gap in terms of investigating these relationships. This study examines these links based on the unique data collected from 175 top management representatives (chief executive officers and managing directors) working in food import and export firms headquartered in the UK and New Zealand. Our results from structural equation modelling indicate that TMTCs are the key determinants for building RBNs, mediating the correlation between TMTCs and environmental sustainability. Directly, the competencies also play a vital role towards environmental practices. The findings further depict that relationship‐oriented firms perform better compared to those which focus less on such networks. Consequently, our findings provide a deeper understanding of the micro‐foundations of environmental sustainability based on TMTCs rooted in the resource‐based view and RBNs entrenched in social network theory. We discuss the theoretical and practical implications of our findings, and we provide suggestions for future research.     

高管团队特征与企业多元化战略关系的Meta分析

采用元分析和分层线性模型的定量分析方法,研究了国内外学者关于高管团队特征与企业多元化战略的相关关系。研究结果表明,高管团队的不同特征与企业多元化战略有不同的相关关系,诸如高管团队规模与企业多元化战略有显著正相关关系,团队平均年龄、教育背景异质性等人口统计学特征与企业多元化战略之间存在显著负相关关系,其他特征的相关关系不显著。同时国家、行业特征等是解释现有研究结果差异的重要原因。最后,提出了高管团队领域未来可能的研究课题。     

Corporate Political Activity and Firm Performance: The Moderating Effects of International and Product Diversification

Prior research has found that corporate political activity (CPA) can both positively and negatively impact firm performance. Combining agency theory with the resource-based view, we examine the relationship between domestic lobbying (a key form of CPA) and firm performance by explicating the moderating effects of international and product diversification. We argue that expansion into international and product markets increases a firm's resources and reduces agency costs in domestic lobbying. Our results, based on a sample of 737 firms, show that lobbying is positively associated with performance for firms that are diversified in both international markets and along product-lines; whereas lobbying is counter-productive for purely domestic and undiversified firms. Our results contribute to the literature on the firm performance implications of corporate political activity by highlighting the roles of international and product diversification.     

Determinants of Relationship Quality in Importer–Exporter Relationships

Despite significant evidence pointing to the key role of relationship quality in solidifying commercial relationships, limited attention has been paid to its determinants in an international context. In an attempt to fill this research gap, our study examines the impact of asset specificity, role performance and cultural sensitivity on the quality of the relationships between importers and their foreign suppliers. It is based on a mailed survey involving 292 importing firms. Relationship quality is presented as a higher‐order concept that results in lower conflict and greater trust, commitment and satisfaction. The results indicate that asset specificity, role performance and cultural sensitivity play a significant positive role in building sound relationship quality. Several managerial implications are extracted from the study, as well as suggestions for future research.     

信息不对称与服务企业多元化程度及其绩效关系研究

以57家中国服务企业为样本,通过均值比较和回归分析研究了信息不对称同服务型企业多元化程度,以及多元化程度与服务型企业绩效之间的关系。研究发现,在服务企业中,经验服务业的多元化程度高于搜索服务业的多元化程度;服务企业的经营绩效与多元化程度呈正相关关系。     

Ownership Identity and Concentration: A Study of their Joint Impact on Corporate Diversification

This paper examines the impact of ownership on product and international diversification. While ownership concentration has received considerable attention from agency theorists we argue that a more nuanced analysis is necessary. We consider how the identity of owners moderates the impact of ownership concentration on diversification strategies. We develop a framework that explains how the combination of different motivations, resources and capabilities associated with different types of owners results in significantly variable relationships between ownership concentration and both product and international diversification. From a theoretical perspective this suggests a social contextualization and extension of the agency theoretic approach that characterizes the field. Based on a study of 222 European firms between 1994 and 2007 we show that family ownership concentration has a positive impact on product and a negative impact on international diversification while the impact of institutional and state ownership concentration is negative on product diversification and positive on international diversification compared with family ownership. This is the first study to provide a comprehensive framework explaining how ownership concentration and identity interact and affect both international and product diversification.     

The micro-foundations of industrial diversification through foreign acquisitions: The multifaceted role of CEO experience

This paper examines the micro-foundations of cross-border industrial diversification strategies. We study the impact of observable CEO experience attributes on the propensity to acquire foreign target firms in unrelated (versus related) industries. Our findings, based on a sample of UK-based firms that engaged in cross-border acquisitions between 2010 and 2016, support an inverted U-shaped relationship between life experience of the CEO and the likelihood of engaging in unrelated foreign acquisitions. Further, we find that CEOs' broad-based work experience, across countries or industries, is associated with a higher propensity to engage in unrelated foreign acquisitions. Finally, CEOs’ education experience in MBA-type qualifications is associated with a preference for related foreign acquisitions. We discuss the theoretical implications of these findings and outline directions for future research in the context of micro-foundations in international business, strategic leadership, and upper echelons theory.