How does top management team diversity influence organizational resilience? Evidence from Japanese companies during the global financial crisis

Abstract

This study explores the crucial role of diversity in top management teams (TMTs), the strategic decision-making units of companies, as a key factor in organizational resilience. This topic has garnered significant attention in both academic and practical fields in recent years. However, there remains a lack of research on the specific mechanisms and pathways through which TMT diversity influences organizational resilience. This study aims to fill this gap by examining disparities within TMTs as a potential obstacle to the information elaboration generated by diversity. Concurrently, it recognizes that TMT diversity can also contribute to the stability and flexibility that characterize resilient organizations in times of crisis. Using multiple regression and Cox survival analyses of large enterprises in Japan, the findings reveal that the information conveyed through TMT diversity facilitates the utilization of a broader range of problem-solving approaches and cognitive frames. However, these benefits are contingent on the level of disparity within the team and are significantly shaped by team interactions.