Top Management Team Tenure Diversity and Performance: The Moderating Role of Behavioral Integration

Abstract

Integrating insights from organizational information processing theory and social categorization theory, we examine how top management team (TMT) tenure diversity affects team performance. We propose a theoretical framework that examines how these two conflicting processes occur simultaneously within diverse TMTs by arguing that TMT tenure variety influences information processing while TMT tenure separation influences the social categorization process. We argue for the presence of nonlinear relationships between tenure variety, tenure separation, and team performance. Furthermore, we propose that these relationships are moderated by the level of TMT behavioral integration. Based on a sample of 357 senior managers from 126 firms in China, we find that both TMT tenure variety and TMT tenure separation have opposing and nonlinear relationships with TMT performance, and the relationship between TMT tenure separation and TMT performance is moderated by the level of TMT behavioral integration. Our results help clarify the conflicting conclusions of previous TMT tenure diversity research. Our findings suggest that the effect of diversity depends on the type of diversity as they affect different processes. Our findings also explain how the opposing effects of both information processing and social categorization can occur simultaneously in the TMT. Furthermore, the effects of both processes are not linear while the level of diversity variety and diversity separation can affect the marginal effects. Finally, TMT behavioral integration processes affect how tenure diversity plays its role in team performance.