The Influence Of TMT Heterogeneity On Corporate Diversification Strategy

China is in the ‘new normal',the speed slows down,the pattern of the industry continues to change,companies are facing greater risks and challenges.In today's economic situation,whether corporate layout strategy in advance is one of the key to get rid of the dilemma and achieve success.In the process of implementing the strategy,the top management team of the enterprise has responsibility to ensure the feasibility of the target,the accuracy of the process and the profitability of the results.There are many domestic and foreign scholars studied the influence of TMT demographic characteristics and heterogeneity based on the upper echelons theory,but the analysis of other dimensions of heterogeneity was rare.This paper examines the theory of TMT heterogeneity and enriches the influencing factors of diversification strategy.From the perspective of the heterogeneity of TMT,this paper can provide some enlightenment for the top management team to reflect on their irrationality in the management activities.At the same time,it also provides a reference for enterprises to build a suitable management team according to the characteristics and heterogeneity of the members,so as to improve the quality of decision-making and avoid risks.This paper adopts the method of combining normative research and empirical research,to find the relation of TMT heterogeneity and diversification strategy,further study the differences in different internal supervision level.First of all,we make a review of research on TMT heterogeneity and diversification strategy,and propose our hypothesis based on relevant theories including agent theory,resource based theory,upper echelons theory and social resources theory.Secondly,we select variables and set the model,take the 258 A shares list companies of Shenzhen and Shanghai Stock Exchange from 2008 to 2013 in China as samples,do empirical analysis including descriptive statistics,correlation analysis,logit regression analysis and multivariate linear regression analysis.Finally we analyze the influence of TMT heterogeneity on the diversification strategy according to the theoretical analysis and empirical results,put forward corresponding suggestions to improve the quality of strategy.The results show that the heterogeneity of TMT has a significant impact on diversification strategy,but different heterogeneity plays different roles in different stages of strategy.Functional background heterogeneity has no significant effect on the diversification strategy choice,but it has significant improvement on diversification performance;social background heterogeneity has a significant role in the diversification strategy choice,but the impact on the diversification performance is negative;if the biggest stock holders of company has absolute power,the negative impact seems to be weakened.The contribution and innovation of this paper lies in: first,we considered the effect of related industry;second,we used social background heterogeneity of TMT as the new dimensions;third,we added the internal supervision level in models to test if heterogeneity causes conflict of interest.