Does TMT internationalization promote corporate digital transformation? A study based on the cognitive process mechanism

Abstract

PurposeCorporate digital transformation (DT) and top management team (TMT) internationalization seem to be concomitant phenomena in recent years, the former is a major change and a thorough transformation requiring continuously new technologies and ideas. Excitingly, the latter shows a relatively broad vision, a large risk appetite and interest in new things. Does TMT internationalization promote DT? This question is essential for DT. Given that, this article will aim to discuss and examine whether and how TMT internationalization affects corporate DT.Design/methodology/approachThis article takes China's A-share listed manufacturing companies from 2011 to 2019 as a sample. The quantitative text analysis method is used to measure attention related to digitalization. This paper discusses: (1) The decision-making logic and cognitive process mechanism of “TMT internationalization–attention related to digitalization–corporate DT”. (2) The moderating effect of shared corporate mission of the TMT on the cognitive process of decision-making, that is, the social process of transforming individual cognition into team cognition, and the social process of transforming team cognition into corporate decision-making.FindingsTMT internationalization promotes DT. As an external manifestation of team cognition, attention plays a positive role as an intermediary mechanism. Specifically, executives with overseas experience have higher urgency assessment and manageable assessment, thus affecting their attention to digitalization positively, thereby promoting DT. This article does not demonstrate the moderating effect of shared corporate mission on the cognitive process, but it promotes DT directly, and only plays a role in the precognitive stage.Originality/valueThis article is the first one to study the relationship between TMT internationalization and corporate DT, which has practical guiding significance for DT and the “going out” strategies of the TMT. Also, the combination of upper echelons theory and cognitive theory opens up the black box of the strategic process. Lastly, this research explores the formation process of team cognition, which is always neglected by previous studies of the TMT demographic characteristics.

Digital transformation and export performance: a process mechanism of firm digital capabilities

“…Leadership and fellowship-related characteristic are crucial for expanding leadership literature on technological topics. Because this type of transition is almost always initiated by top management, they have an extremely upbeat and cheerful demeanour (Chen et al ., 2023). To successfully adopt DT, organisational culture and structure are crucial in enabling personnel to quickly adjust to changes in the demand for skills and technology change.…”

“…Literature has highlighted the leader's responsibility to ensure and drive the DT amongst firms (Porf ırio et al, 2021). Leaders may help their organisations flourish in the digital age by sticking to the following three practices: (1) tracking the trends of emerging technologies; (2) deciding the direction of the DT and investment plan; and (3) guiding the team to change fast and precisely (AlNuaimi et al, 2022;Chen et al, 2023). Considering SMEs, more studies must address DT leadership roles (Franco et al, 2021).…”

Digitalization, Spillover and Environmental, Social, and Governance Performance: Evidence From China

“…The use of text analytics to construct an index of an enterprise’s digitalization is an emerging approach (Ma et al, 2022; Xu et al, 2022). Referring to recent studies (Chen et al, 2023; Shang et al, 2023), the study uses text analysis and word frequency statistics to construct digital indicators for listed companies. The process is analyzed in three steps: The first step is to construct a digital lexicon from five dimensions: “artificial intelligence technology,” “big data technology,” “cloud computing technology,” “blockchain technology,” and “digital technology application.” The second step is to use Python’s “jieba” word splitting tool to analyze the txt text of listed companies’ annual reports on the basis of digital dictionaries and conduct word frequency statistics.…”

Industry and Regional Peer Effects in Corporate Digital Transformation: The Moderating Effects of TMT Characteristics

“…The impact of TMT characteristics on corporate strategic decisions [35], especially the decision-making of digital transformation [36][37][38], has been widely noticed. Hambrick and Mason (1984) have argued that TMT characteristics to a certain extent reflect the cognitive level and values of the TMT, which influence the behavioral decisions of the corporation [39].…”

“…The possible contributions of this study are as follows: Firstly, it helps to break through the perspective of corporate decision-making independence to study the drivers of digital transformation. Most existing research has studied the motivation of digital transformation based on corporate decision-making independence, such as corporate technological capability [10][11][12] and TMT characteristics [36][37][38]. From the perspective of the peer effect, the average decision-making level of peer firms' digital transformation will have interactive effects on the digital transformation decisionmaking of individual corporations, which leads to the convergence of digital transformation decision-making.…”