This thesis deals with the impact of TMT characteristics on innovation. The aim of this thesis is to integrate theoretical and empirical findings on the relationship between TMT characteristics and innovation and to discuss possible reasons for differing empirical results of prior research.
Upper echelons research also has practical relevance, as it suggests several managerial implications that can be useful in the selection and training of top managers as well as in forecasting actions and counteractions of rivals. For the remainder of this paper, specific demographic characteristics will be identified that should be taken into account when a firm wants to pursue an innovation strategy.
This thesis will start with an explanation of innovation and TMTs, which are central constructs of the research question. Subsequently, the basic model of UET will be described. The main part will focus on the impact of TMT characteristics on innovation, and therefore, TMT traits as well as TMT diversity will be explored.
With respect to TMT traits, the impact of average age and tenure, educational and functional background as well as gender on innovation will be analysed. In terms of TMT diversity, the impact of TMT heterogeneity in age, tenure, education, function and gender on innovation will be examined. Afterwards, moderating factors that affect the relationship between TMT characteristics and innovation will be introduced in order to further explain some of the differing empirical findings.
Therefore, the moderating effects of culture, industry context, strategic context and interfunctional coordination will be investigated. Then, a case study will be conducted to apply the findings of the main part. Finally, a conclusion will be drawn by providing managerial implications, discussing some limitations of this thesis and outlining some topics that require future research.
Table of Contents
- 1 Introduction
- 1.1 Research question
- 1.2 Innovation
- 1.3 Top management team
- 2 Upper echelons theory
- 3 The impact of top management team characteristics on innovation
- 3.1 Top management team traits
- 3.1.1 Average age
- 3.1.2 Average tenure
- 3.1.3 Educational background
- 3.1.4 Functional background
- 3.1.5 Gender
- 3.2 Top management team diversity
- 3.2.1 Age diversity
- 3.2.2 Tenure diversity
- 3.2.3 Educational background diversity
- 3.2.4 Functional background diversity
- 3.2.5 Gender diversity
- 4 Moderating factors affecting the impact of top management team characteristics on innovation
- 4.1 Culture
- 4.2 Industry context
- 4.3 Strategic context
- 4.4 Interfunctional coordination
- 5 Case Study
- 5.1 Innovation at Tesla and Ford
- 5.2 The impact of CEO characteristics on innovation at Tesla and Ford
Objectives and Key Themes
This thesis investigates the impact of top management team (TMT) characteristics on innovation within firms. It aims to integrate existing theoretical and empirical findings on this relationship, explaining discrepancies in previous research results. The study also explores the practical implications for manager selection and training, and offers suggestions for future research.
- The influence of TMT demographic characteristics (age, tenure, education, functional background, gender) on innovation.
- The role of TMT diversity (in age, tenure, education, function, and gender) in fostering innovation.
- The impact of moderating factors (culture, industry context, strategic context, interfunctional coordination) on the TMT-innovation relationship.
- Managerial implications derived from the research findings.
- Limitations of the study and directions for future research.
Chapter Summaries
1 Introduction: This chapter introduces the research question, focusing on the impact of top management team (TMT) characteristics on firm innovation. It contrasts the market-based and resource-based views of strategic management, highlighting the upper echelons theory (UET) which emphasizes the role of the TMT's values and cognitive biases in shaping firm strategy and performance. The chapter establishes innovation as a crucial factor in firm success and competitive advantage, setting the stage for the investigation of TMT's influence on this critical aspect of organizational performance. The chapter outlines the structure of the thesis, promising to explore TMT traits, diversity, moderating factors, and a case study to comprehensively address the central research question.
2 Upper echelons theory: This chapter delves into the theoretical underpinnings of the research, providing a detailed explanation of the upper echelons theory (UET). It emphasizes the central role of the TMT in shaping organizational strategy and performance, highlighting the influence of TMT's characteristics on organizational outcomes. The chapter likely details how the values, experiences, and cognitive biases of top managers are reflected in their strategic choices, influencing various organizational aspects, including innovation. It sets the theoretical framework for understanding how the TMT's human characteristics impact the innovation process within the organization.
3 The impact of top management team characteristics on innovation: This chapter forms the core of the thesis, examining the direct relationship between TMT characteristics (traits and diversity) and innovation. It likely analyzes the influence of individual traits such as average age, tenure, educational background, functional background, and gender on a firm's innovative output. Additionally, it will likely explore the effects of diversity within the TMT across these same dimensions. This chapter aims to establish a clear understanding of how specific TMT compositions contribute to or hinder a firm’s innovative capacity.
4 Moderating factors affecting the impact of top management team characteristics on innovation: This chapter delves into the complex interplay between TMT characteristics and innovation by introducing moderating variables that influence their relationship. It explores how factors like organizational culture, industry context, strategic context, and interfunctional coordination can either amplify or dampen the impact of TMT characteristics on innovation. The chapter seeks to provide a more nuanced understanding of the TMT-innovation link, accounting for contextual elements that affect the effectiveness of specific TMT compositions in driving innovation.
5 Case Study: This chapter applies the theoretical framework and empirical findings from previous chapters to a real-world case study, likely comparing and contrasting the innovation strategies and TMT characteristics of two or more companies. It analyzes how the characteristics of their top management teams influenced their approaches to innovation, offering empirical support for or challenging the findings of the previous chapters. The analysis would contribute towards validating the theoretical propositions and demonstrating the practical relevance of the research.
Keywords
Top management team, innovation, upper echelons theory, TMT characteristics, TMT diversity, organizational culture, industry context, strategic context, interfunctional coordination, firm performance, managerial implications.
Frequently Asked Questions: Impact of Top Management Team Characteristics on Innovation
What is the main research question of this thesis?
This thesis investigates the impact of top management team (TMT) characteristics on innovation within firms. It aims to explain discrepancies in previous research and explore practical implications for manager selection and training.
What theoretical framework is used in this research?
The research primarily utilizes the Upper Echelons Theory (UET), which emphasizes the role of the TMT's values and cognitive biases in shaping firm strategy and performance, including innovation.
What TMT characteristics are examined?
The thesis examines both individual TMT traits (average age, tenure, educational background, functional background, and gender) and TMT diversity across these same dimensions.
How does TMT diversity impact innovation?
The study explores the role of diversity in age, tenure, education, functional background, and gender within the TMT in fostering innovation.
What moderating factors are considered?
The research considers the influence of several moderating factors, including organizational culture, industry context, strategic context, and interfunctional coordination, on the relationship between TMT characteristics and innovation.
What is the significance of the case study?
A case study, likely comparing companies like Tesla and Ford, applies the theoretical framework and empirical findings to real-world examples, demonstrating the practical relevance of the research and offering empirical support for or challenging the findings of the previous chapters.
What are the key findings expected from this research?
The study aims to establish a clear understanding of how specific TMT compositions contribute to or hinder a firm’s innovative capacity, considering both direct effects and the influence of moderating factors. It will also offer managerial implications and suggest directions for future research.
What are the key objectives of this study?
The key objectives are to analyze the influence of TMT demographic characteristics on innovation, examine the role of TMT diversity in fostering innovation, investigate the impact of moderating factors on the TMT-innovation relationship, derive managerial implications from the research findings, and identify limitations and directions for future research.
What are the chapter summaries?
The thesis includes chapters on Introduction (establishing the research question and theoretical background), Upper Echelons Theory (detailed explanation of the theoretical framework), the impact of TMT characteristics on innovation (exploring both traits and diversity), moderating factors affecting this relationship, and a case study applying the findings to real-world examples.
What are the keywords associated with this research?
Keywords include: Top management team, innovation, upper echelons theory, TMT characteristics, TMT diversity, organizational culture, industry context, strategic context, interfunctional coordination, firm performance, managerial implications.
- Quote paper
- C. Rath (Author), 2018, Top Management Characteristics and Innovation. Impact and Moderating Factors, Munich, GRIN Verlag, https://www.grin.com/document/1322164