The relationship between top management team diversity and organizational resilience: Evidence from the automotive industry in Japan

Abstract

Organizational resilience has attracted much attention with regard to a company’s survival and to achieve higher performance in today’s uncertain conditions. However, how organizational resilience is built remains unclear. This study sheds light on the function of the top management team (TMT) from upper echelons theory and argues that its deep-level diversity has a positive impact on organizational resilience. Our empirical study of the Japanese automotive industry found that tenure, international, and wise diversity have a positive impact on building organizational resilience. In contrast, educational background diversity was found to have a negative impact on building organizational resilience, contrary to our hypothesis. Our results revealed that diversity was a double-edged sword and established the need to focus on environmental and industrial contexts in linking diversity and organizational resilience. Further elucidation of the relationship between diversity and organizational resilience can be achieved by simultaneously focusing on other aspects of diversity, in concurrence with existing diversity indices for variety.

Top management team diversity and adaptive firm performance: the moderating roles of overlapping team tenure and severity of threat

“…For example, the data from 11 industries failed to support the hypothesis that environmental uncertainty moderates the relationship between TMT diversity and firm performance (Cannella et al ., 2008). A study using a sample of the automobile manufacturing industry found that, contrary to their theoretical expectation, TMT educational background diversity negatively affect firm resilience (Yamauchi and Sato, 2023). They interpret these results to mean that diversity is a double-edged sword and that environmental and industrial contexts need to be taken into account.…”

“…Since change has become an eternal reality of modern organizations that needs to be addressed squarely (Ma et al ., 2021), organizational crisis has attracted a great deal of academic attention (Duchek et al ., 2020; Friedman et al ., 2016; Majchrzak et al ., 2007; Sajko et al ., 2021; Staw et al ., 1981; Yamauchi and Sato, 2023). According to the time-based conceptual framework, crisis and crisis management literature from an internal perspective can be divided into organizational preparedness, crisis leadership, and organizational learning (Bundy et al ., 2017).…”

“…Scholars argue that this potential advantage is more likely to be realized in highly competitive and uncertainty environments (Cannella et al ., 2008; Qian et al ., 2012). In fact, TMT diversity has recently been linked to crisis management (Duchek et al ., 2020; Mitchell et al ., 2021; Schaedler et al ., 2022; Yamauchi and Sato, 2023). Like the findings in routine situations, the positive impact of TMT diversity on firm performance in novel situations has not been consistently supported by previous studies.…”

Research on Critical Factors Influencing Organizational Resilience of Major Transportation Infrastructure Projects: A Hybrid Fuzzy DEMATEL-ISM-MICMAC Approach

“…The concept of organizational resilience is multifaceted, multidimensional, and multi-connotated. Studies have indicated that a high degree of diversity within an organization can positively influence organizational resilience [30]. Organizational leadership also positively impacts business organizational resilience.…”