A Study On The Relationship Between TMT Functional Heterogeneity And Strategic Change

The upper echelons theory provides theoretical foundation for researchers who study the relationship between top management team characteristics and strategic change.Top management team functional background,as an important top management team characteristic,has received great attention for scholars.However,outcomes of the study on the relationship between top management team functional background heterogeneity and strategic change is rather complicated,or even entirely inconsistent.Scholars holding the view of information processing perspective believe top management team functional background heterogeneity could provide top management team a variety of information processing perspectives and knowledge structure,thereby contributing to making effective decisions and promoting strategic change,while scholars holding the view of group conflict believe top management team functional background heterogeneity could lead to inconsistent proposals and strategic consensus,create group conflict,thereby restraining strategic change.This paper believes the inconsistency of research conclusions is due to,on the one hand,the lack of deep research on the mediating effect between top management team functional background heterogeneity and strategic,on the other hand,the neglect of important moderating factors.Therefore,this paper combines information processing perspective and group conflict perspective to explore the mediating mechanism of top management team functional background heterogeneity affecting strategic change,and explore the moderating effect of CEO duality.Based on the data of the seven sub-sectors of China's equipment manufacturing industry,this paper studies the relationship between top management team functional background heterogeneity,managerial cognition,group conflict,CEO duality and strategic change.The findings are:(1)top management team functional background heterogeneity has a significantly positive impact on strategic change;(2)the top management team functional background heterogeneity has a significantly positive impact on managerial cognition complexity and managerial cognition focus;(3)the top management team functional background heterogeneity has a significantly positive impact on group conflict;(4)managerial cognition complexity has a significantly positive impact on strategic change,and managerial cognition focus has a significantly negative impact on strategic change;(5)group conflict has a significantly positive impact on strategic change;(6)managerial cognition and group conflict mediate the relationship between top management team functional background heterogeneity and strategic change;(7)CEO duality has a positive moderating effect on the relationship between managerial cognition complexity and strategic change,but has no significant moderating effect on the relationship between managerial cognition focus and strategic change;(8)CEO duality has a negative moderating effect on the relationship between group conflict and strategic change.On the one hand,this paper enriches the upper echelons theory,investigates the mediating mechanism of how top management team functional background heterogeneity affects strategic change,and finds the positive effect of top management team functional background heterogeneity is greater than its negative effect.On the other hand,this paper explores how to exert the positive influence of managerial cognition and suppress the negative impact of group conflict from the perspective of managerial discretion and organizational coordination by using CEO duality as moderator,providing important theoretical and practical guidance for promoting effective strategic change.