CEO Characteristics and Technological Innovativeness: A Canadian Perspective

Article excerpt

Abstract

The technology adoption rate of Canadian manufacturers has been a subject of concern as it impacts on Canada's productivity and international competitiveness. This article builds on previous studies of upper echelons theory and examines the linkage between CEO characteristics and technological innovativeness in the Canadian context. Results show the linkage to be highly significant and lend support to the upper echelons theory. Implications for education, managerial practices, and public policies are discussed.

In the 1990s the ability of Canadian companies to innovate has been an issue of national concern. While it is recognized that it is the early adoption and effective use of technology, rather than investments in R&D alone, that enhances competitiveness (Daly, 1985), the evidence suggests that North American companies' technology adoption rates often lag behind those of European and Japanese companies (Hottenstein & Dean, 1992) and that managerial and psychological barriers slow the rate. It has been observed that if Canadian companies are to survive in a global environment, continuous innovation is critical (McMillan, 1987). The problem of technological lag is particularly significant in the manufacturing sector, as imports from economies with lower labour costs continue to threaten Canadian production. This paper will examine the relationship between Canadian CEO characteristics and technological innovativeness in the manufacturing sector. This linkage is studied in the context of computerized manufacturing technology adoption.

Canadian studies that examine the effect of CEO attributes on corporate innovativeness tend to focus on small-sized firms (Julian, 1991: Julian & Hebert, 1986; Lefebvre & Lefebvre, 1992; Miller & Toulouse, 1986a), possibly due to the strong influence of CEOs on the strategy and performance of small businesses (Miller & Toulouse, 1986a). Research has demonstrated the relevance of CEO mind-sets and personal demographics to corporate innovativeness among small-sized firms (Julian, 1991; Lefebvre & Lefebvre, 1992; Miller & Toulouse, 1986a; 1986b). Since the current literature suggests that CEO influence on technology adoption is also significant in large companies (Lefebvre & Lefebvre, 1992) and that North American CEOs tend to be less innovative than their Japanese and European counterparts (Hayes & Abernathy, 1980; Kudos, Tachikawa, & Suzuki, 1988), research linking CEO attributes and innovativeness that includes large Canadian firms, which is the subject of the present study, is warranted.

The influence of CEO characteristics on organizational performance is controversial. Subscribers to the upper echelons theory take the view that top management characteristics can be used to predict organizational outcomes (Hambrick & Mason, 1984). Attention has been drawn to the influence of CEO personalities on strategy (Miller & Toulouse, 1986b), organizational culture (Deal & Kennedy, 1982), corporate norms (Tichy & Ulrich, 1984), fostering innovativeness (Hage & Dewar, 1973; Quinn, 1985), and more generally providing effective leadership (Schein, 1985). Others have argued the contrary view, that organizational outcomes are not determined by leadership effects (Hall, 1977), suggesting variously that industry and company factors have a more important effect on corporate performance (Kimberly & Evanisko, 1983; Lieberson & O'Connor, 1972), that CEO actions are subject to environmental constraints (Aldrich, 1979), and that corporate performance owes little to CEO contributions (Galbraith, 1984). The current paper adopts the view that CEO characteristics matter, and the results suggest that they correlate highly with corporate innovativeness.

To date, research that examines the relationship between CEO characteristics and corporate outcomes has followed two main streams. One is to examine CEO demographics such as age, education, work experience, and tenure (Bantel & Jackson, 1989; Globerman, 1974). …