| The world is experiencing profound shifts unseen in a century,and continuous changes have gradually become the norm.The current international political situation is dramatically turbulent,and the risk of economic stagflation and the factors of instability and uncertainty are on the rise.At the same time,China is promoting comprehensive deepening reform to accelerate the construction of a new development pattern,and social and economic development is facing greater uncertainty.Macroeconomic uncertainty aggravates enterprises’ environmental uncertainty,so how to effectively cope with the increase of environmental uncertainty has become an important challenge for enterprises under the new development pattern.As an organic system that coordinates the adaptive relationship between an organization and its external environment,the strategy is required to be dynamically adjusted to adapt to changes in the organization’s internal and external environment.In other words,the alignment of an organization with its environment depends on appropriate strategy.Whether an enterprise can dynamically adjust and change its strategy in response to environmental changes affects profoundly its sustainable development.As the core group of an enterprise’s strategy formulation,the top management team(TMT)undertakes the responsibility of launching and implementing strategic change.Therefore,the role of the TMT in an enterprise’s strategic change has attracted extensive attention.However,existing research has generally focused on TMT composition,and there is a lack of exploration of TMT vertical disparity.Disparity among members is a fundamental element of TMTs,and this disparity represents hierarchical structures.Foreign studies show that hierarchical structures are a double-edged sword,and their negative effects are more prominent.In contrast,some scholars argue that individuals tend to obey their superiors due to the influence of hierarchical perceptions in the Chinese context,and clear hierarchical structures help to promote the division of labor and collaboration,enhance work efficiency,and ultimately benefit organizations.However,there are a few empirical studies in the existing literature that analyze the impact of TMT hierarchical structures in the context of Chinese management,and the applicability of this perspective in the field of strategic change remains to be tested.Furthermore,power and status are the two most important bases of organizational hierarchies according to hierarchy theory.The former usually refers to the asymmetric control over valuable resources within an organization,while the latter usually refers to the extent to which an individual is respected or admired by others in the organization.Status is more subjective because it comes from the awarding of others,and scholars usually use some form of objective indicator(e.g.,pay level)to proxy members’ status.In addition,power and status influence others in different ways.Power is more dominant and can exert influence on others through rewards and punishments,while status is effective mainly through imitation and demonstration among members.Based on the above theoretical and practical backgrounds,this study takes the perspective of hierarchy theory and uses pay level as the proxy variable of members’ status to explore the influence of TMT power and pay disparity on enterprises’ strategic change.Further,there are differences in the paths through which TMT power disparity and pay disparity affect enterprises’ strategic change.Therefore,by integrating hierarchy theory,group faultline theory,tournament theory,equity theory and upper echelons theory,this study analyzes how and under what circumstances TMT power and pay disparity can more affect enterprises’ strategic change,aiming to solve the dilemma of "unwilling to change,unable to change,and afraid to change" encountered by enterprises in the practice of strategic change and make up for the deficiencies and defects in the existing studies.Focusing on the core question,this study explores the influence of TMT power disparity on enterprises’ strategic change and the influence of TMT pay disparity on enterprises’ strategic change respectively.In the sub-study on the influence of TMT power disparity on enterprises’ strategic change,three basic questions are discussed:(1)the influence of TMT power disparity on strategic change;(2)the mediating role of faultline strength in the relationship between TMT power disparity and strategic change;(3)the moderating effect of environmental uncertainty in the relationship between faultline strength and strategic change.In the sub-study on the impact of TMT pay disparity on enterprises’ strategic change,three basic questions are discussed:(1)the impact of TMT pay disparity on strategic change;(2)the mediating role of TMT restructuring in the relationship between TMT pay disparity and strategic change;(3)the role of environmental uncertainty in the relationship among TMT pay disparity,TMT restructuring and strategic change.To address the above research questions,this study uses25221 unbalanced panel data of 3662 Shanghai and Shenzhen A-share listed companies in China from 2011-2021 for empirical testing.In the sub-study on the influence of TMT power disparity on enterprises’ strategic change,the main conclusions are as follows.(1)TMT power disparity has a significant positive impact on enterprises’ strategic change,and the higher the level of TMT power disparity,the greater it can improve the degree of strategic change.(2)Different dimensions of faultline strength play different roles in the relationship between TMT power disparity and strategic change.Specifically,TMT power disparity will significantly increase relationshiprelated faultline strength and inhibit enterprises’ strategic change,while task-related faultline strength plays a mediating role in the relationship between TMT power disparity and strategic change and TMT power disparity will enhance task-related faultline strength,and then promote enterprises’ strategic change.(3)Environmental uncertainty cannot play a moderating role in the relationship between faultline strength and strategic change.In the sub-study on the impact of TMT pay disparity on enterprises’ strategic change,the main conclusions are as follows.(1)TMT pay disparity plays a significant role in promoting enterprises’ strategic change.The higher the level of TMT pay disparity,the greater it can improve the degree of strategic change.(2)TMT restructuring plays a mediating role in the relationship between TMT pay disparity and strategic change.TMT pay disparity can promote enterprises’ strategic change by increasing the level of TMT restructuring.(3)Environmental uncertainty can not only strengthen the positive effect of TMT restructuring on enterprises’ strategic change,but also strengthen the mediating role of TMT restructuring in the relationship between TMT pay disparity and strategic change.The conclusions can further improve and enrich the existing theoretical achievements.Specifically,the innovation and theoretical contributions are mainly reflected in the following points.First,this study confirms the view that clear hierarchical structures are more likely to benefit organizations in the Chinese context,and extends this view to the study of enterprises’ strategic change,remedying the lack of attention to the relationship between TMT hierarchical structures and strategic change in existing studies.Whether hierarchical structures positively or negatively affect team functioning has long been debated in academia and presents two split and opposing research perspectives,functions and dysfunctions.At the same time,hierarchy theory and some cross-cultural studies also suggest that organizations influenced by hierarchical perceptions in the Chinese context are more likely to benefit from these well-defined hierarchical structures.However,there are a few empirical studies that explore the impact of TMT hierarchical structures(especially power disparity)in the Chinese context,and it remains to be tested whether this view is also applicable in the field of strategic change.Therefore,from the perspective of hierarchy theory,this study explores the influence of TMT power and pay disparity on enterprises’ strategic change in the specific context of Chinese management practice,which is heavily influenced by hierarchical perceptions,and the findings extend existing research on the consequences of organizational hierarchies in the Chinese scenario.Second,this study reveals the "double-edged sword" effects of different dimensions of faultline strength in the relationship between TMT power disparity and strategic change,and opens the black box of how TMT power disparity affects enterprises’ strategic change behaviors.Existing research on the relationship between TMT power disparity and strategic change focuses on the direct relationship between the two,which cannot explain why power disparity affects enterprises’ strategic behaviors and is not conducive to understanding the black box of TMT members’ interaction process.Although some scholars have focused on the effects of power on faultline strength and the effects of faultline strength on enterprises’ strategic change,research in these two directions has been conducted independently,lacking research that integrates TMT power disparity,faultline strength and strategic change into one framework,and ignoring the possible mediating effect of faultline strength in the relationship between TMT power disparity and strategic change.In addition,enterprises’ strategic decisions are influenced by external environment,and environmental uncertainty profoundly affects the formulation of strategic and operational decisions.Therefore,this study integrates hierarchy theory,group faultline theory and upper echelons theory to dissect the effects of TMT power disparity,faultline strength and environmental uncertainty on enterprises’ strategic change,and classifies faultline strength into relationship-related faultline strength and task-related faultline strength to reveal the roles played by different dimensions of faultline strength in the relationship between TMT power disparity and strategic change and the potential contextual role of environmental uncertainty,thus opening the black box of the relationship between TMT power disparity and strategic change.Third,this study finds the path of the role of TMT restructuring in the relationship between TMT pay disparity and strategic change and clarifies the moderating role of environmental uncertainty on the path.The findings refine the research logic between TMT compensation structure and enterprises’ strategic change and provide a systematic answer to the question of how and under what circumstances TMT pay disparity is more likely to influence enterprises’ strategic change.Although some scholars have focused on the impact of TMT pay disparity on enterprises’ strategic change,they are limited to the direct relationship between the two and cannot explain the paths through which TMT pay disparity can influence enterprises’ strategic change behaviors,and there is also a logical jump from TMT compensation structure to enterprises’ strategic behaviors.Existing research has found that TMT pay disparity can promote TMT turnover,reduce team stability,and lead to TMT restructuring,which is often an important driver of enterprises’ strategic change.However,existing research lacks studies that integrate TMT pay disparity,TMT restructuring and strategic change into one framework,and also ignores the mediating role of TMT restructuring in the relationship between TMT pay disparity and strategic change.In addition,environmental uncertainty is a key situational factor in enterprises’ strategic change,and the validity of the findings would be significantly limited without the inclusion of environmental uncertainty in the research framework.Therefore,this study combines tournament theory,equity theory,and upper echelons theory and systematically integrates TMT pay disparity,TMT restructuring,environmental uncertainty and strategic change into one framework to analyze the mediating effect of TMT restructuring in the relationship between TMT pay disparity and strategic change and explore the boundary conditions of environmental uncertainty in the above relationship,aiming to reveal the influence path and moderating mechanism of TMT pay disparity affecting enterprises’ strategic change. |
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