The Research On The Relationship Between The Top Management Team And The Strategic Choice Of China’s Real Estate Industry

Real estate industry is the pillar industry of the national economy, and also has close correlation with many industries. Since China adopted the reform of the housing system in1998, the real estate industry has had rapidly development, but the process of the development has not been easy. It experienced the boom period of the real estate market, but also impacted by the economic crisis. With soaring housing prices, the development of the real estate had been deeply affected by the government regulations. Under the impact of the macroeconomic environment and the characteristics of the real estate industry, the development of real estate industry is full of opportunities and challenges. This paper bases on strategic choice theory and the characteristics of the real estate industry, analyzes the alternative strategies in the strategic decision-making of the real estate industry, and sorts out top management team characteristics of the real estate industry, empirical study on the impact of the top management team on the strategic choice in China’s real estate industry, obtain the following conclusions:First, this thesis classifies the type of strategic choice of China’s real estate industry, depending on whether there is a strategic investment behavior, strategic types of China’s real estate industry is divided into a stable strategy and growth strategy, the growth strategy is specific divided based on the content of the investment, the investment area and investment path. According to the investment content, strategic type of the real estate industry can be divided to market development strategy, product development strategy, the strategy of horizontal integration, vertical integration strategy, diversification strategy, and non-related diversification strategy six strategic choice types. Based on the investment area there are local expansion strategy, regional expansion strategy, cross-regional expansion strategy and international expansion strategy. Based on investment path can be divided into three strategic types of independent investment, co-investment and merger and acquisition.Second, the article selects A shares listing real estate company as the study samples, in accordance with the strategic types of China’s real estate industry, summary and analyze the strategic choice types’evolution of China’s real estate industry. At the same time, summary the type of strategic choice of each session of the top management team (TMT) during the same period, analyze the strategic choice types’evolution of the top management of China’s real estate industry. The study find that the main strategy choice type of China’s real estate industry is growth strategy, the strategic choice in investment content, investment area and investment path constantly changing with the passage of time. In the investment content, during2001-2010, the product development strategy is a major strategic at the early time. With time passed, the proportion of market development strategy and horizontal integration gradually raised, vertical integration, related and non-related diversification strategies basically belong to the auxiliary strategy. In the investment area, the real estate industry trend from the local expansion strategy to cross-regional expansion strategy between2001and2010. In Investment path, the main strategy is independent investment strategy, co-investment and M&A strategy are the auxiliary strategies. The evolution of the strategic choices of each session of the top management team is essentially the same with annual strategic choice.Finally, still choose China’s A-share listed real estate companies as the research objects, finish the demographic characteristics of the members of the top management team of real estate companies, sum up the characteristics of the three session of the top management team of the real estate companies between2001and2010. Empirical analyze the relationship between strategic choices and top management team’s characteristics, which include the age, size, level of education, occupational background and the top management team’s heterogeneity in age, education level and occupational background. The study finds that average size and average age of the top management team are increased, the age gap is narrowed, and differences of the level of education and professional background are gradually expanded. Use multivariate logistic regression model in SPSS found that the size of the top management team, age heterogeneity, the education level heterogeneity, occupational background heterogeneity have significantly affect to the corporate strategic, the impact of the average age of the team members on the strategic choices is not significant. The enterprises with larger size of the top management team prefer the market development strategy than the product development strategy. The top management teams with larger age heterogeneity prefer to choose market development strategy, horizontal integration strategy, product development strategy. Compared to related diversification strategy, the top management teams with greater age heterogeneity are more inclined to choose a non-related diversification strategy. The education level heterogeneity is bigger, the top management teams are more prefer the market development strategy, horizontal integration strategy and product development strategy. Under choosing diversification strategy, top management teams with more education level heterogeneity tend to choose non-related diversification strategy. With the more heterogeneity of occupation background, the more possible the top management teams choose the related or non-related diversification strategy.