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From Attention to Action: The Influence of Cognitive and Ideological Diversity in Top Management Teams on Business Model Innovation

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  • Somendra Narayan
  • Jatinder S. Sidhu
  • Henk W. Volberda

Abstract

As top management teams (TMTs) become progressively more diverse, an important question arises: how does greater TMT diversity affect a company’s ability to innovate its business model? To examine this, we draw on the upper‐echelons literature and on research on business models as activity systems to theorize that cognitive and ideological diversity in TMTs will affect teams’ attention to business model innovation (BMI) and companies’ BMI intensity. Analysis of longitudinal data from firms in the US printing and publishing industry provides support for the theory that, over time, TMT cognitive and ideological diversity have a positive influence on BMI. Whereas cognitive diversity expands TMT’s BMI attention‐scope, both cognitive and ideological diversity increase BMI intensity. However, too much ideological diversity has a negative effect. We furthermore find that TMT longevity moderates the effects of TMT diversity positively, suggesting that the benefit of diversity grows as team members work together longer as a team. We discuss the study’s contributions to the literature on diversity, BMI, and the upper echelons.

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  • Somendra Narayan & Jatinder S. Sidhu & Henk W. Volberda, 2021. "From Attention to Action: The Influence of Cognitive and Ideological Diversity in Top Management Teams on Business Model Innovation," Journal of Management Studies, Wiley Blackwell, vol. 58(8), pages 2082-2110, December.
    • Handle: RePEc:bla:jomstd:v:58:y:2021:i:8:p:2082-2110
    DOI: 10.1111/joms.12668
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    2. Dhir, Amandeep & Khan, Sher Jahan & Islam, Nazrul & Ractham, Peter & Meenakshi, N., 2023. "Drivers of sustainable business model innovations. An upper echelon theory perspective," Technological Forecasting and Social Change, Elsevier, vol. 191(C).
    3. Lu, Qicheng & Meng, Xiangju & Su, Jiaoyue & Au Kai Ming, Alan & Wu, Yongjie & Wang, Chengqi, 2023. "TMT functional background heterogeneity and SMEs’ performance: The role of dynamic capabilities and business environment," Journal of Business Research, Elsevier, vol. 160(C).
    4. Yuan Ni & Jia Wang & Cui Li, 2022. "The Power of Sustainability in the “Black Swan” Event: Entrepreneurial Cognition of Top Management Team and Dual Business Model Innovation," Sustainability, MDPI, vol. 14(6), pages 1-22, March.
    5. Lee, Jangwook & Chung, Jiyoon, 2022. "Women in top management teams and their impact on innovation," Technological Forecasting and Social Change, Elsevier, vol. 183(C).
    6. Zhongshu Lin & Xueyao Li & Yeng Wai Lau & Wei Theng Lau & Sabarina Mohammed Shah, 2024. "Business Models of Chinese Firms Impacted by the Crisis Based on Case Studies," Academic Journal of Interdisciplinary Studies, Richtmann Publishing Ltd, vol. 13, March.
    7. Li, Ganglei & Shao, Yunfei, 2023. "How do top management team characteristics affect digital orientation? Exploring the internal driving forces of firm digitalization," Technology in Society, Elsevier, vol. 74(C).

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