TMT Functional Experience, TMT’s Attention And Corporate Innovation Strategy

In a hyper-competitive environment, market demands change fast, the production technology changes with each passing day, the life cycle of products is shorter and shorter, and the competition among corporates become more intense. Innovation, as a way to obtain competitive advantage, to maintain and improve performance, should be allocated more attention, and to be the focus of corporate strategy management research. Top management team (for short, TMT) as corporate decision-maker, its decision-making choice will be reflected in the corporate strategic behavior. Therefore, the paper will transform the question of "how corporate to carry out effective innovation" into the study on "how TMT to carry out effective innovation ".Upper echelons theory links TMT’s characteristics with organizational results together, which thinks TMT will affect the organization’s strategic choice and performance. With different characteristics, TMT’s preference, cognition and judgment of things will show obvious differences, and then bring different effect on corporate action. In order to better understand organization strategic choice and promote the improvement of organization performance, it is necessary to fully understand and analyze the characteristics of TMT. Based on upper echelons theory, most studies directly use TMT’s demographic characteristics (such as age, education level, functional experience, tenure, etc.) as the proxy variables of their cognitive mode to study how TMT’s cognition and preference impact corporate strategic decision. In accordance with upper echelons theory, the research framework should be the mode of "characteristics-cognitive or preferences-behavior", but in fact, most research is the framework of "characteristics-behavior", the analysis of "cognitive and preferences" is relatively few. In1997, on the basis of related research on Simon’s bounded rationality behavior theory and organizational cognition, Ocasio put forward the attention-based view of the firm, which provides a new perspective to explain the connection path of TMT’s characteristics and corporate strategic choice. Attention based view of the firm regards demographic characteristics of TMT as antecedent variables of TMT’s attention, and thinks TMT’s cognition and preference can be more directly reflected on the process of allocating TMT’s attention compared with TMT’s characteristics, therefore, it is more direct to use TMT’s attention to explain how TMT’s cognition influence corporate strategic choice. It’s worth noting that TMT’s strategic decision-making will not only be affected by their own cognitive preferences, but also be influenced by some decision-making situations, therefore, the article also considers how organizational slack, CEO duality moderate the relationship between TMT’s attention and corporate innovation strategy. Drawing upon the upper echelons theory and attention-based view of the firm, the article focuses on the relationship among TMT functional experience, TMT’s attention and corporate innovation strategy. Specifically, based on the date of139high-technique firms in Listed SMEs in China and the method of multiple regressions, research results indicate that TMT with market, design and research and development functional experience is positively related to TMT external attention (including market demand attention, competition attention and technology attention) and the corporate innovation strategy, TMT external attention was positively related to the corporate innovation strategy. Meanwhile, TMT external environment attention mediate the relationship between TMT functional experience and the corporate innovation strategy, organizational slack and CEO duality both positively moderate the relationship between and TMT external attention and corporate innovation strategy.