journal article Dec 08, 2012

Performance effects of top management team demographic faultlines in the process of product diversification

Strategic Management Journal Vol. 34 No. 6 pp. 704-726 · Wiley
Abstract
Expanding into new product areas is an important part of the growth strategy of many firms, but there is still more to learn about how it affects firm performance. We believe that as the top management team (
TMT
) is responsible for coordinating product expansion, looking there can yield valuable clues. We argue that diversification entails significant additional information processing and that this strains top managerial resources. We hypothesize that task‐related faultlines within the
TMT
may help it cope with product expansion while bio‐demographic faultlines may hinder it. We find support for these hypotheses on a longitudinal sample of 2,730 expansion steps made by 61 German firms between 1985 and 2007: task related faultline strength increases performance when diversifying, while bio‐demographic faultline strength decreases it

. Copyright © 2012 John Wiley & Sons, Ltd.
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Metrics
167
Citations
172
References
Details
Published
Dec 08, 2012
Vol/Issue
34(6)
Pages
704-726
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Cite This Article
Thomas Hutzschenreuter, Julian Horstkotte (2012). Performance effects of top management team demographic faultlines in the process of product diversification. Strategic Management Journal, 34(6), 704-726. https://doi.org/10.1002/smj.2035
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