Top management team attributes and corporate entrepreneurship: A meta-analysis
kHUB post date: January 2025
Originally published: 12 November 2024 (PDMA JPIM • Vol. 42, Issue 2 • January 2025)
Read time: 70 minutes
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How do the attributes of a firm's top management team (TMT) influence corporate entrepreneurship across organizational and national contexts? Drawing on upper echelons theory and the managerial discretion perspective, this meta-analytic study examines the dynamic relationship between TMTs' attributes and corporate entrepreneurship, focusing on the moderating role of managerial discretion arising from organizational and national-level factors. To provide insights into the micro-foundations of firm behavior, we explore how key TMT attributes—diversity, size, transformational leadership, tenure, general human capital, and entrepreneurial human capital—affect corporate entrepreneurship. A comprehensive meta-analysis of 57 primary studies reveals that the effect of a TMT's attributes is context-dependent and is significantly influenced by the approach to managerial discretion taken by the country in which the firm operates. By showing that transformational leadership and the TMT's entrepreneurial human capital and size affect corporate entrepreneurship, while attributes like tenure, diversity, and general human capital have limited or no impact, our findings challenge the prevailing view that a standardized approach to the TMT's composition drives corporate entrepreneurship. The study also underscores the role of the national-level managerial discretion and finds that firms in institutional environments that feature low managerial discretion must align their TMT strategies with local institutional contexts to maximize their corporate entrepreneurship. These findings advance upper echelons theory by demonstrating that managerial discretion acts as a boundary condition in shaping how the TMT's attributes influence corporate entrepreneurship based on the national context. This research contributes to the fields of strategic and innovation management and offers practical insights for leaders who seek to harness the full potential of their TMTs.
Practitioner Points:
- Firms should tailor their top management teams' (TMT) composition to fit their organizations' national contexts. A standardized one-size-fits-all approach may not be effective in driving corporate entrepreneurship.
- TMTs that have the right mix of attributes are more likely to drive corporate entrepreneurship. Appointing TMT members with strong entrepreneurial human capital and transformational leadership skills is most likely to foster corporate entrepreneurship, as these attributes encourage innovation, strategic renewal, and corporate venturing.
- Larger and more diverse TMTs can offer a broader range of perspectives, which helps firms identify and exploit new entrepreneurial opportunities. However, attributes like tenure and general human capital may have limited impacts on corporate entrepreneurship.
- In international settings, firms should adapt their TMTs' composition to the level of managerial discretion that is typical in each country to optimize corporate entrepreneurship. In institutional environments where the level of managerial discretion is low, as formal and informal institutional factors constrain decision-making, firms should design carefully their TMTs to ensure effective entrepreneurial outcomes.