diversity or conversely hamper this information exchange and integration

Diversity or conversely hamper this information

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diversity, or conversely hamper this information exchange and integration, blocking these benefits. Though the results for these moderated-mediation hypotheses are rather weak, for the variables ‘CEO marketing specialist’ and ‘CEO founder’, the pattern of findings is fairly in line with these expectations. For ‘CEO generalist’ and ‘CEO tenure overlap’, we were not able to detect a mediation effect of ‘TMT functional diversity’ and T. Buyl et al. 170 © 2010 The Authors Journal of Management Studies © 2010 Blackwell Publishing Ltd and Society for the Advancement of Management Studies
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‘information exchange and integration’. Consequently, the moderated-mediation hypotheses could not be confirmed for these CEO characteristics. The partial to weak support for the mediation effects of the ‘TMT functional diversity’ and ‘information exchange and integration’ interaction might be explained in various ways. Firstly, it is well known that mediation tests often suffer from low statistical power, which could be problematic especially in small samples (Preacher and Hayes, 2008). Further on, strong mediation is difficult to detect, probably because mediator variables, such as ‘information exchange and integration’, are affected by many other factors (other than, for example, CEO characteristics), and are therefore only loosely coupled (Van der Vegt and Bunderson, 2005). In addition, Preacher and Hayes (2008, p. 886) claim that ‘in most studies, it is unlikely that the effect of an independent variable on an outcome is transmitted by only one means’. This implies that mediating processes are complex processes, entailing several mediators that operate simultaneously. It is not surprising therefore that in the upper echelons literature in general, support for mediated expla- nations has been relatively modest, too (Simons et al., 1999). Contribution to the Literature and Managerial Implications Our study contributes to the upper echelon and strategic leadership research in multiple ways. First, despite Hambrick’s (1994, 1995) claim stressing that CEO behaviour and style of operating greatly affect TMT processes, until today the CEO–TMT interface has largely remained unexplored (Ling et al., 2008). To the best of our knowledge, this is the first study that explores how the CEO, through his/her background characteristics, affects TMT internal processes and in this way helps to realize the benefits of TMT functional diversity. Our study empirically underscores the significance of the CEO– TMT interface and the important role of CEOs in overcoming TMT fragmentation (Hambrick, 1995). It also extends previous studies building on the CEO–TMT interface, such as Ling et al.’s (2008) research on the impact of CEO transformational leadership on TMT processes, by including CEO demographic characteristics and by investigating the interactions between CEO and TMT demographics. We found that CEOs specialized in marketing and with high shared experience with the other executives of the team are more effective in unleashing the performance benefits of functional diversity. In contrast,
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