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Past innovation research has largely neglected potential effects of corporate governance issues on strategic choices, and thereby on innovation management outcomes. The theory of upper echelon implies that strategic choices result from idiosyncrasies of top management teams (TMT). Building on this theory, we hypothesize that TMT diversity enhances firm performance by facilitating an innovation strategy that increases the firm's new product portfolio innovativeness. Our findings support the relevance of considering a corporate governance view for explaining innovation outcomes. Empirically, we can show that TMT diversity has a strong impact on the strategic choice of firms to focus on innovation fields. Such focus then drives new product portfolio innovativeness and firm performance. As corporate governance arrangements thus seem relevant in the context of innovation management, we can derive implications for both policy makers and innovation researchers.
Original languageEnglish
JournalResearch Policy
Publication date2010
Volume39
Issue7
Pages907-918
ISSN0048-7333
DOIs
StatePublished
CitationsWeb of Science® Times Cited: 15

Keywords

  • Corporate governance, New product portfolio innovativeness, Theory of upper echelon, Innovation strategy, TMT diversity
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