Academic journal article Management International Review

The Impact of the Top Management Team's International Business Experience on the Firm's Internationalization: Social Networks at Work

Academic journal article Management International Review

The Impact of the Top Management Team's International Business Experience on the Firm's Internationalization: Social Networks at Work

Article excerpt

Abstract

* This study examines the impact of the top management team's (TMT's) international business experience on the US multinational corporation's internationalization extent. It discusses this impact in three ways: by a study of the experience of the team as a unit, by an examination of each chief executive officer's experience separate from that of the rest of the team, and by a weighting of the respective members' experiences by their prominence and influence in the top management team.

* This TMT is viewed as an international business advice network. The TMT's international business experience is drawn from its members' entire business careers, including functional, geographic and mode of entry responsibilities.

Key Results

The results of this study strongly support the hypothesized relationships between the career international business (IB) experience of the top management team and the US multinational corporation's (MNC's) internationalization extent. Whether the top management team (TMT) is considered as a whole or disaggregated into the chief executive officer (CEO) and the rest of the TMT, the positive relationship between TMT career IB experience and firm internationalization extent is supported. The effect of the TMT member's career IB experience on MNC's internationalization extent intensifies when it is weighted by the centrality of the member's position in the TMT's IB advice network. Thus, the results of this study support the idea that the TMT member's prominence or influence in the TMT IB advice network matters in explaining the effect of TMT career IB experience on the MNC's internationalization extent.

Introduction

This study examines the impact of the international business experience of the top management team (TMT) on the US multinational corporation's (MNC's) internationalization extent. We seek to answer a number of questions. First, does the international business (IB) experience of the entire TMT affect the internationalization extent of the MNC? It is important to note that in this study, the TMT's IB experience is drawn from its members' entire business careers, which may include functional, geographic and mode of entry responsibilities. Second, since the chief executive officer (CEO) is a member of the TMT, but is hierarchically superior to the other TMT members, what are the separate effects of his/her career IB experience on the MNC's internationalization extent? At the same time, what are the separate effects of the rest of the TMT members' career IB experience as a group? Third, if the TMT managers are viewed as an IB advice network, does the position of each TMT member in this network matter? More specifically, a member's position in the TMT's IB advice network reflects that member's prominence and influence in the TMT's decisions concerning international business matters. Therefore, does a member's position in this advice network affect the degree to which this member's international business career experience affects the MNC's internationalization extent?

Management researchers have studied and reported findings on many aspects of the individual attributes and the roles of CEOs and their TMTs that influence a firm's strategic outcomes (Finkelstein/Hambrick 1996). Also, international business management researchers have made significant progress towards understanding the internationalization of the firm based on firm-level attributes, on the environmental conditions within which the MNC operates (Buckley/Ghauri 1999, 1993), and on the MNC's international strategy/management processes (Lohrke/ Bruton 1997, Samiee/Athanassiou 1998). Yet to date, only a few published studies have shed some light on the link between an MNC's internationalization and its top managers' international business experiences and their roles in the TMT decision process (Daily/Certo/Dalton 2000, Reuber/Fischer 1997, Sambharya 1996). This study introduces previously unexamined international dimensions of TMT characteristics and makes a substantive contribution towards our understanding of their influence on the MNC's internationalization extent in four different ways. …

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