The Influence Of Top Management Team Heterogeneity On Radical Innovation

Innovation has become a core element and outstanding performance for organizations to sustain in the ever-changing environment.Radical innovation can achieve disruptive changes in existing processes,products and services,and is a complete reshaping of the innovation paradigm and industrial landscape,ultimately bringing great benefits to organizations.Radical innovation is becoming more and more important,and more and more scholars have paid attention to this topic.The research on the influencing factors of breakthrough innovation mainly focuses on macro market factors and micro organizational climate,however,people are the main body of innovation,although some studies have focused on the role of entrepreneurs in radical innovation,but there is less research on the influence played by the executive team in breakthrough innovation in organizations.The executive team is often responsible for formulating strategies and deciding the direction of the organization,and has an important leadership role in the development of radical innovation.Based on this,this study explores the impact of executive team heterogeneity on radical innovation from the special role played by the executive team,and conducts an empirical analysis using the annual report data and patent-related data of 570 A-share listed high-tech manufacturing companies in China in 2015.The analysis results show that executive team occupational background heterogeneity and overseas background heterogeneity have a significant positive effect on breakthrough innovation.This study also introduces executive team compensation differences as moderating variables,and the findings show that vertical compensation differences positively moderate the relationship between executive team career background heterogeneity and overseas background heterogeneity and breakthrough innovation,and horizontal compensation differences positively moderate the impact of executive team career background heterogeneity and overseas background heterogeneity on breakthrough innovation.This study explores the impact of executive team heterogeneity on breakthrough innovation based on top echelon theory,and explores the important factors that shape breakthrough innovation from the perspective of executive team,which also enriches the theoretical study of radical innovation.The findings of the study provide some inspiration for the construction of executive teams and innovation management in organizations.First,organizations should build an executive team with heterogeneous characteristics of professional and overseas backgrounds and multiple competencies and perspectives to bring into play their vitality and bring breakthrough development and innovation to the organization.Second,the incentive mechanism for the executive team,especially the compensation difference within the team,also needs to be paid attention to,and appropriately increase the compensation of the CEO.We should pay attention to the incentive mechanism of the executive team,especially the salary difference within the team,and appropriately increase the salary difference between the CEO and other members of the executive team,which is conducive to motivating the team members to work and find breakthrough innovation for promotion.Finally,we should also appropriately increase the salary difference between members of the executive team at the same level to avoid the phenomenon of "free-riding" in the team and fully stimulate the management efficiency of each executive member.And then a high level executive team should be created to contribute to the radical innovation development of the organization.