Research on the Influence of TMT Characteristics to Firm Performance Based on Diversification Strategy
|School||Huazhong University of Science and Technology|
|Keywords||Top management team Heterogeneity Diversification strategy Firm performance|
In recent 20 years, research of top management team (TMT) has been given extensive attention. But the researches on the influence of TMT characteristics to firm performance are not explicit and consistent enough; moreover, many scholars also did not consider strategy variables in their study. So it is necessary to research on top management team characteristics and firm performance of listed companies of China under the background of the financial crisis. In addition, China is a transitional economy; the external opportunity enhances the diversified management enterprise. In the context of the recent economic crisis, enterprise managers concern on the Diversification strategy which is used as dispersing risk. Different diversification strategy requires different top management team; the factors of corporation diversification strategy must be taken into account when explore the influence of top management team.Based on the theories of top management team, diversification strategy and firm performance, 348 China listed manufacturing companies are taken as a stylebook. Tests and analyzes the research hypotheses by SPSS (Version 17.0). The results are as follows:Firstly, in the financial crisis background, effects of means of top management team characteristics and firm performance were relatively weak. Secondly, both top management team tenure heterogeneity and career experience heterogeneity are negative related to firm performance; professional background heterogeneity is positive related to firm performance. Thirdly, related diversification negatively moderates the relation between career experience heterogeneity and firm performance; related diversification positively moderates the relation between professional background heterogeneity and firm performance. Fourthly, unrelated diversification positively moderates the relation between team tenure heterogeneity, career experience heterogeneity and firm performance; unrelated diversification negatively moderates the relation between professional background heterogeneity and firm performance.The results of the study indicate that analyzing the pros and cons of top management team characteristics should take its place of external environment. The influence of dimensions of top management team characteristics to different diversification strategy and degree varied. In addition, an analysis frame is given to systematically assess top management team and team adjustment based on enterprise diversification strategy.