An Empirical Study On How The Characteristics Of Senior Executive Influence The Enterprise Financial Performance

The top management team, as a carrier of high level human capital, is animportant driving force for the continuous development of enterprises. Seniorexecutive is an advanced form of human capital of enterprise, as well as the captain ofthe ship which can be considered as an enterprise. Strategic flexibility refers to therange and ability of the effective use of resources. On the base of Upper EchelonsTheory and related theory of Financial performance, the strategic flexibility will beintroduced into the model to investigate the relationship of top management team’scharacteristic and financial performance.Strategic flexibility is added into the model, discussing the regulating effect of iton financial performance of enterprise, establishing an analysis model on how thecharacteristics of top management team influence the corporate financial performance.This paper takes China’s manufacturing enterprises of listing corporation as theresearch sample, collecting financial data and management data information from173manufacturing enterprises of listing corporation. Two indicators, the age and size ofthe organization, will be selected to measure organizational factors. In the constructionof top management team characteristics,6indicators will been chosen, such as age,education, tenure, tenure heterogeneity, professional work heterogeneity, experienceheterogeneity. The performance index system includes earnings per share, return ontotal assets, and rate of return on net assets. We also test the hypothetical model ofsenior executives and enterprises’ financial performance. First of all, executives’demographic characteristics mainly refer to the age, tenure, education background andoccupation background. The lager degree of variation on the aspects of average age,average degree, professional occupation background heterogeneity heterogeneity, themore help to improve the corporate financial performance. Secondly, the relationshipbetween enterprise scale and enterprise performance is insignificant, while firm ageand firm performance are negatively correlated. Finally, strategic flexibility willregulate the influence of top management team characteristics on firm financialperformance.Through the verification of the importance of top management team on enterprisefinancial performance, this paper analyses the problems of China’s enterprises in theaspects of corporate performance and top management team construction, in order that domestic enterprises will pay much more attention to the team construction.Furthermore, this essay puts forward the corresponding proposal, and gives advice onimproving international competitiveness power for domestic enterprises.