Board versus TMT international experience: a study of their joint effects
Cross Cultural Management: An International Journal
ISSN: 1352-7606
Article publication date: 19 October 2012
Abstract
Purpose
The purpose of this paper is to test the relationship between board and top management team (TMT) members' international experience and CEO multinationality, with their firm's degree of internationalization. Through the lenses of upper echelon theory, on a sample of 108 European and US firms, the author tests the variables “international experience” and “CEO multinationality”, at the board and at the TMT levels.
Design/methodology/approach
A longitudinal research design is used to examine director's individual attributes in 2001 and firm's degree of internationalization in 2003‐2008. The sample comprised directors of the 108 largest European and US service and industrial firms by market capitalization, as listed in the Financial Times (FT) Global index of 2007.
Findings
A positive effect is found on internationalization for international experience of both boards and TMTs; also a positive relationship is found between CEO multinationality of TMTs and internationalization.
Research limitations/implications
It is acknowledged that the use of a diversified set of large US and European public firms could add unnecessary variance due to the different contexts involved in a sample of just 108 firms. Most of the sampled firms are already international so the study does not argue for board and TMT composition as a triggering mechanism for firm internationalization but, instead, as a tool that can enhance an international expansion process. The fact that international experience is a binary variable also limits the validity of the results. Either a direct survey of directors or a continuous variable that measures the amount in years of international experience would have yielded richer data. Data availability constraints limited the scope of this variable. The chosen operationalization just measures the presence and not the depth of executive's international experience. Additionally, it is acknowledge that just eliminating supervisory board members that represent unions/workers does not completely homogenize boards from the different countries in the sample.
Practical implications
Practitioners could use these findings to improve their selection and training processes of both top managers and board members.
Originality/value
The paper extends upper echelons theory to the board of directors. The comparison of boards and TMTs will facilitate the differentiation of corporate elites. It also introduces a new study variable: CEO multinationality and finally, it uses a mixed geographical sample of large European and US firms.
Keywords
Citation
Rivas, J.L. (2012), "Board versus TMT international experience: a study of their joint effects", Cross Cultural Management: An International Journal, Vol. 19 No. 4, pp. 546-562. https://doi.org/10.1108/13527601211270011
Publisher
:Emerald Group Publishing Limited
Copyright © 2012, Emerald Group Publishing Limited