The dissertation is composed of two related essays on top management team (TMT) demographic composition and organizational outcomes. I focus on demographic faultlines and demographic diversity, two key concepts in team composition literature. Demographic faultlines refer to hypothetical lines dividing a group into several subgroups based on one or more demographic attributes such as gender, age and educational background (Lau & Murnighan, 1998) and demographic diversity refers to the extent to which team members differ from each other in terms of demographic attributes (Milliken & Martins, 1996; Williams & O’Reilly, 1998). The first essay focuses on the effects of demographic faultlines between the acquirer TMT and the target firm TMT in the context of mergers and acquisitions (M&A)....[ Read more ]

The dissertation is composed of two related essays on top management team (TMT) demographic composition and organizational outcomes. I focus on demographic faultlines and demographic diversity, two key concepts in team composition literature. Demographic faultlines refer to hypothetical lines dividing a group into several subgroups based on one or more demographic attributes such as gender, age and educational background (Lau & Murnighan, 1998) and demographic diversity refers to the extent to which team members differ from each other in terms of demographic attributes (Milliken & Martins, 1996; Williams & O’Reilly, 1998). The first essay focuses on the effects of demographic faultlines between the acquirer TMT and the target firm TMT in the context of mergers and acquisitions (M&A). This essay asks the research question, “Would demographic faultlines between acquirer and target firm TMTs influence corporate takeover outcomes?” Data of takeover deals of large US firms generally supports the arguments that demographic faultlines between the paired TMTs reduce both the likelihood of M&A deal completion and the market response to the acquirer around the M&A announcement date. In addition, while job-related faultlines (e.g., subgroups along educational level and educational background) have more impacts on deal, completion, bio-demographic faultlines ( e.g., subgroups along gender and age) have more impacts on the stock market response. Also, team and firm status differences would mitigate such faultline effects.

The second essay focuses on the influence of cultural environments on the relationship between job-related diversity (e.g., differences in educational background and functional background) in a TMT and organizational innovation. This essay asks the research question, "Would paradoxical culture affect the relationship between TMT job-related diversity and organizational innovation?" Here, paradoxical culture refers to individual lay beliefs or thinking that contradictory elements (yin-yang) could exist simultaneously, change into each other and constitute a whole. Two pieces of data, a longitudinal data set of Chinese publicly listed firms and a survey data from a coastal province in China, generally support the arguments that paradoxical culture at both the regional (sub-national) level and the team level strengthens the positive relationship between TMT job-related diversity and organizational innovation such as patent applications and patent grants.