Top Management Team Intrapersonal Functional Diversity and Tax Avoidance

2020 ◽  
Author(s):  
James M. Plecnik ◽  
Shan Wang
Keyword(s):  
High Risk ◽  
Functional Diversity ◽  
Work Experience ◽  
Top Management Team ◽  
Tax Avoidance ◽  
Management Team ◽  
Top Management ◽  
Tax Rates ◽  
Effective Tax Rates ◽  
Prior Literature

Top management team (TMT) members have been shown to influence tax avoidance; however, prior literature has not identified whether the intrapersonal diversity of TMT functional backgrounds leads to higher levels of tax avoidance. To study this relationship, we utilize TMT intrapersonal functional diversity, which captures the average heterogeneity of the TMT members' work experience. The skills associated with intrapersonal functional diversity may allow managers to better understand and communicate with various parties related to firm tax policies, thereby facilitating tax avoidance. Overall, we find that TMTs with higher levels of intrapersonal functional diversity achieve lower cash effective tax rates and that these TMTs do not rely on tax strategies that pose high risk.

The Impact of Top Management Team Characteristics on the Choice of Earnings Management Strategies: Evidence from China

2017 ◽  
Vol 32 (1) ◽  
pp. 143-164 ◽  
Author(s):  
Baolei Qi ◽  
Jerry W. Lin ◽  
Gaoliang Tian ◽  
Hua Christine Xin Lewis
Keyword(s):  
Earnings Management ◽  
Financial Reporting ◽  
Work Experience ◽  
Management Strategies ◽  
Top Management Team ◽  
Management Team ◽  
Data Availability ◽  
Top Management ◽  
Upper Echelons Theory ◽  
The Impact

SYNOPSIS Using a sample of Chinese A-share listed firms from 2000 to 2015, we investigate the association between a firm's use of earnings management strategies and the characteristics of its top management team. Our findings suggest that several demographic characteristics (i.e., age, gender, educational level, and financial work experience) of the entire team, as well as of the CEO/CFO and other team members separately, are significantly associated with both accrual-based and real-activities-based earnings management; these, in turn, may affect the quality of the firm's financial reporting. Our results are consistent with the predictions of the upper echelons theory and have implications for various stakeholders in corporate financial reporting, as well as providing insights to those responsible for selecting and developing upper-level executives. JEL Classifications: M40; M41. Data Availability: The data used in this paper are derived from public sources.

scholarly journals Top Management Team Intrapersonal Functional Diversity and Adaptive Firm Performance: The Moderating Roles of the CEO–TMT Power Gap and Severity of Threat

2021 ◽  
Vol 12 ◽  
Author(s):  
Changlong Ma ◽  
Yuhui Ge ◽  
Jingwei Wang
Keyword(s):  
Firm Performance ◽  
Functional Diversity ◽  
Interaction Effect ◽  
Top Management Team ◽  
Management Team ◽  
Top Management ◽  
Regression Analyses ◽  
Contingency Model ◽  
Team Adaptation ◽  
Threat Rigidity

While usually argued to be improving firm performance, the effect of top management team (TMT) functional diversity on firm performance is mixed. Bridging the TMT diversity, team adaptation, and threat-rigidity literature, we present a contingency model in which the relationships between intrapersonal functional diversity (at both CEO and TMT levels) and adaptive firm performance depend on the CEO–TMT power gap and severity of threat. To test our hypotheses, 270 firms, which have been severely affected due to the COVID-19 pandemic, were selected from China's A-share listed companies. Multiple regression analyses have shown that a moderation of CEO intrapersonal functional diversity's effect on adaptive firm performance by the CEO–TMT power gap is moderated by the severity of threat. However, no significant main or interaction effect of TMT intrapersonal functional diversity was found. The findings of this study have implications for the recovery or improvement of firm performance in threat situations.

scholarly journals The Influence of Top Management Team on Chinese Firms’ FDI Ambidexterity

2018 ◽  
Vol 14 (3) ◽  
pp. 513-542 ◽  
Author(s):  
Yi Li ◽  
Lin Cui
Keyword(s):  
Functional Diversity ◽  
Top Management Team ◽  
External Environment ◽  
Manufacturing Firms ◽  
Management Team ◽  
Top Management ◽  
Chinese Firms ◽  
The Social ◽  
Positive Effect

ABSTRACTStrategic ambidexterity has been under researched in the context of Chinese outward foreign direct investment (FDI). An ambidextrous FDI, balancing between exploratory and exploitive activities, is strategically desirable but managerially challenging. We examine the role of top management team (TMT) functional diversity in influencing Chinese firms’ degree of FDI ambidexterity, and its boundary conditions in relation to the informal and formal institutional environments within which the TMT operates. Based on a panel of Chinese outward-investing manufacturing firms, our empirical analyses show that a marginal positive effect of TMT functional diversity on a firm's FDI ambidexterity is strengthened by the social faultline presence in the firm's TMT, but is weakened by the development of formal institutions in the firm's external environment.

Top management team diversity, individualism–collectivism, and MNE performance

2019 ◽  
Vol 19 (3) ◽  
pp. 273-290
Author(s):  
Adrian Gil ◽  
Lance Eliot Brouthers ◽  
Dawn L Keig
Keyword(s):  
Firm Performance ◽  
Functional Diversity ◽  
Multinational Enterprises ◽  
Top Management Team ◽  
Management Team ◽  
Top Management ◽  
Cultural Perspective ◽  
Functional Heterogeneity ◽  
National Cultures ◽  
The Relationship

Existing theories of diversity typically focus on a limited range of usually American research settings and on a relatively narrow range of types of diversity. Here, we examine a less commonly used measure of diversity, top management team (TMT) functional diversity, for a sample of non-US multinational enterprises (MNEs) from a cross-cultural perspective. We theorize and empirically test the notion that the individualism–collectivism dimension of national culture moderates the relationship between TMT diversity (measured by functional heterogeneity) and firm performance such that greater functional diversity among TMTs in collectivistic national cultures improves firm performance, while greater functional diversity among TMTs in individualistic national cultures weakens MNE performance. Our empirical results based on a sample of MNEs from 25 countries support our hypotheses. The relationship between TMT functional heterogeneity and firm performance is strongly negative in highly individualistic national cultures but positive in collectivistic national cultures. Managerial implications, limitations, and future research directions are discussed.

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