Top Management Team Diversity and Firm Performance: Evidence from Disrupted Insurance Markets
Type
conference paper
Date Issued
2009-10-14
Author(s)
Abstract
Team diversity has opposing effects. It increases the potential for creativity and simultaneously lowers group coherence. We delineate these positive and negative effects in the context of top management teams (TMT) and firm performance. For doing so, we develop a model that relates the distinct effects of TMT diversity to contextual factors. Our analyses of the global insurance industry (1998-2007) test how TMT diversity affects the way firms respond to market disruptions. We argue that high levels of TMT diversity allow firms to react both more consciously and briskly, whereas low levels of TMT diversity make them mimic their peers. Yet, since the extensive decision making of diverse TMTs involves costs and since its benefits fade during stable times, TMT diversity remains a double-edged sword.
Language
English
HSG Classification
contribution to scientific community
Refereed
Yes
Publisher
SMS
Event Title
29th Strategic Management Society (SMS) Annual International Conference
Event Location
Washington DC
Event Date
11.-14.10.2009
Subject(s)
Division(s)
Eprints ID
53032