Empirical Research On The Relationship Between Top Management Team Heterogeneity And Corporate Diversification Degree

Since the rise of the 1960 s, diversification strategy has been in the ascendant. Many enterprises continue to grow due to the implementation of the diversification strategy. But there are also many companies therefore a loss, until faced with a major crisis. Controversy about the pros and cons of diversification strategy has never stopped. At present, China’s listed companies generally implement diversification strategy. However, there are many companies failed to seize market opportunities and make full use of existing resources, which causes arrested development. Development and implementation of the diversification strategy is largely directly related to the level of management operation. Top management team is diversification strategy leader. Differences between team members are bound to affect the mode of operation and efficiency of the team, and thus influence the choice of diversification strategy. How to construct a reasonable top management team to ensure the effective implementation of the diversification strategy, and ultimately achieve diversification strategy synergies issues need to be resolved.This paper studies the effect of its impact on the degree of diversification in terms of top management team heterogeneity, uses the knowledge of Upper Echelons Theory, team conflict theory and attention, uses the way of theoretical and empirical analysis, taken pharmaceutical manufacturing A-share listed companies in both Shanghai and Shenzhen as samples to explore the relationship between the top management team heterogeneity and corporate diversification degree. The main contents are as follows:(1) Top management team heterogeneity, Including the influences of age heterogeneity, term heterogeneity, education degree heterogeneity, professional experience heterogeneity on the corporate diversification degree;(2) Difference of enterprises ownership influences the relationship between the top management team heterogeneity and corporate diversification degree. It will affect the operation of top management team, Thereby affecting corporate strategy decisions. Given the nature of our business, the paper will be divided into state-owned enterprises of China’s enterprises and non-state-owned enterprises(including private, foreign, etc.) to investigate the regulating effect of corporate ownership;(3) Executive attention configuration is one of the important factors that affect the decision-making behavior of executives, executives attention focus will influence the direction of strategy development. The paper will divide executive attention configuration into the external environment and internal organization, Explore the differences of the influence effects of different configuration attention.Empirical research results show that: Firstly, in our cultural background and institutional environment, the top management team age heterogeneity, term heterogeneity, professional experience heterogeneity both have significantly negative effects to the corporate diversification degree. Secondly, corporate ownership plays a moderating effect between the top management team heterogeneity and corporate diversification degree. The influence of top management team age heterogeneity, professional experience heterogeneity on the corporate diversification degree are greater in the non-state-owned enterprises than that in the state-owned enterprises; Thirdly, executive attention configuration plays a moderating effect between the top management team heterogeneity and corporate diversification degree. The influence of top management team term heterogeneity, professional experience heterogeneity on the corporate diversification degree are greater in the enterprises of executive attention focused on the internal environment than that in the enterprises of executive attention focused on the external environment. The paper analyzes the relationship between the top management team heterogeneity and corporate diversification degree under Upper Echelons Theory. In addition, based on a view of team confliction, this paper analysis top management team operation process, to analysis the differences of the influence of top management team heterogeneity on the corporate diversification degree in the different situation, The results of the paper provide meaningful reference and guidance for enterprises of implementing diversification strategy.