How top management team diversity affects innovativeness and performance via the strategic choice to focus on innovation fields
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.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Lettl, Christopher & Rost, Katja & von Wartburg, Iwan, 2009. "Why are some independent inventors 'heroes' and others 'hobbyists'? The moderating role of technological diversity and specialization," Research Policy, Elsevier, vol. 38(2), pages 243-254, March.
- Kee H. Chung & Stephen W. Pruitt, 1994. "A Simple Approximation of Tobin's q," Financial Management, Financial Management Association, vol. 23(3), Fall.
- Barry L. Bayus & Gary Erickson & Robert Jacobson, 2003. "The Financial Rewards of New Product Introductions in the Personal Computer Industry," Management Science, INFORMS, vol. 49(2), pages 197-210, February.
- Henderson, Rebecca. & Cockburn, Iain., 1994. "Measuring competence? : exploring firm effects in pharmaceutical research," Working papers 3712-94., Massachusetts Institute of Technology (MIT), Sloan School of Management.
- Rebecca Henderson & Iain Cockburn, .
"Scale, Scope and Spillovers: The Determinants of Research Productivity in Drug Discovery,"
ec25/94, Department of Economics, University of Lancaster.
- Rebecca Henderson & Iain Cockburn, 1996. "Scale, Scope, and Spillovers: The Determinants of Research Productivity in Drug Discovery," RAND Journal of Economics, The RAND Corporation, vol. 27(1), pages 32-59, Spring.
- Claude Francoeur & Réal Labelle & Bernard Sinclair-Desgagné, 2008. "Gender Diversity in Corporate Governance and Top Management," Journal of Business Ethics, Springer, vol. 81(1), pages 83-95, August.
- Carlos De Abreu Dos Reis & Miguel Sastre Castillo & Salvador Roig Dobón, 2007. "Diversity and business performance: 50 years of research," Service Business, Springer, vol. 1(4), pages 257-274, December.
- William C. Brainard & James Tobin, 1968. "Pitfalls in Financial Model-Building," Cowles Foundation Discussion Papers 244, Cowles Foundation for Research in Economics, Yale University.
- Katja Rost & Margit Osterloh, 2008. "You Pay a Fee for Strong Beliefs: Homogeneity as a Driver of Corporate Governance Failure," CREMA Working Paper Series 2008-28, Center for Research in Economics, Management and the Arts (CREMA).
- L. J. Bourgeois, III & Kathleen M. Eisenhardt, 1988. "Strategic Decision Processes in High Velocity Environments: Four Cases in the Microcomputer Industry," Management Science, INFORMS, vol. 34(7), pages 816-835, July.
- Hoegl, Martin & Proserpio, Luigi, 2004. "Team member proximity and teamwork in innovative projects," Research Policy, Elsevier, vol. 33(8), pages 1153-1165, October.
- Abetti, Pier A., 2002. "From science to technology to products and profits: Superconductivity at General Electric and Intermagnetics General (1960-1990)," Journal of Business Venturing, Elsevier, vol. 17(1), pages 83-98, January.
- S. Trevis Certo & Richard H. Lester & Catherine M. Dalton & Dan R. Dalton, 2006. "Top Management Teams, Strategy and Financial Performance: A Meta-Analytic Examination," Journal of Management Studies, Wiley Blackwell, vol. 43(4), pages 813-839, 06.
- Kevin Campbell & Antonio Mínguez-Vera, 2008. "Gender Diversity in the Boardroom and Firm Financial Performance," Journal of Business Ethics, Springer, vol. 83(3), pages 435-451, December.
When requesting a correction, please mention this item's handle: RePEc:eee:respol:v:39:y:2010:i:7:p:907-918. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If references are entirely missing, you can add them using this form.