The Effects Of Top Management Team Faultlines On Firm Performance

Exploring how to adapt to the rapidly changing market environment and build lasting competitive advantage is the core issue of strategic management theory.In 1984,Hambrick and Mason first put forward Upper Echelons Theory,that top management team is the core group of enterprise strategic decisions.They survey and analyze the complex environmental information based on their own diverse attributes,and then redeploy the resource allocation and strategic choice in company.Subsequently,scholars wildly studied and discussed the influence of TMT background characteristics on the enterprise management behavior and performance output,including age,gender,ethnicity,tenure and other aspects,which makes the issues related to TMT research have become one of the liveliest and most influencing research fields in strategic theory.With the development of theoretical research and quantitative research of TMT,scholars have gradually discovered research on TMT diverse characteristics appeared inconsistent conclusions.For a more in-depth analysis the influence of TMT diverse characteristics on enterprise management practices,Lau and Murnighan(1998)introduced the concept of group faultlines on the basis of integrating and absorbing other disciplines,emphasizing the alignments of multiple attributes within one group have a significant impact on team behavior and organizational outcomes.However,previous studies generally paid attention to the mediating role of microeconomic factors in the correlative relationship between TMT faultlines and firm performance,such as team conflict,information processing,emotional integration and inter-group prejudice,while ignoring the impact of firm or organizational level factors,especially TMT environment cognition and dynamic capabilities.Therefore,taking dynamic environment for research background,exploring the correlation mechanism between TMT faultlines,TMT environment cognition,dynamic capabilities and firm performance not only can effectively integrate dispersed research on top management team,environment cognition and enterprise capability,but also help firms better manage TMT faultlines,so that cognitive resources of team members to be more fully utilized.In order to clarify the influence and mechanism of TMT faultlines,the present study builds a multivariate-multiple-mediation model of TMT faultlines,TMT environment cognition,dynamic capabilities and firm performance,and conducts empirical research analysis of 228 high-tech enterprises on ShangHai and ShenZheng stock market.The empirical results show that different types of TMT faultlines differ in mechanism.In addition,in a dynamic environment background,TMT faultlines affect firm performance through the mediating role of TMT environment cognition and dynamic capabilities.Correlation analysis and discussion in this study will help us to further clarify and understand the influence of TMT faultlines on firm performance in dynamic environment,and possess important guiding significance to enhance TMT collaboration,strengthen enterprise strategic synergy and effectively integrate enterprise's core resources.