TMT organizational configurations and opportunity realization in established firms: An exploratory analysis

Abstract

This paper studies the relationship between the opportunity realization of established firms and the organization of their top management teams (TMTs). We first consider six key organizational elements of TMTs and show how they combine in TMT organizational configurations. Then, we analyse how these configurations relate to the opportunity realization, also distinguishing between innovation and organizational change opportunities. Using a sample of 237 Italian firms collected through a survey of CEOs, we identify three well defined TMT organizational configurations: CEOcentric TMT, integrated TMT, and incentive-based TMT. The results from econometric models show that firms with an integrated TMT or an incentive-based TMT are generally better able to realize opportunities. Both the integrated TMT and the incentive-based TMT seem to have a positive impact on the realization of innovation opportunities, whereas the CEO-centric TMT positively relates only to organizational change opportunities. Our results contribute to the body of knowledge on how organizational design influences entrepreneurial behaviours/outcomes of established firms.

Exchanging knowledge in the TMT to realize more innovation opportunities: what can family firms do?

“…Seven types of opportunities were provided as follows: new products and services; new production technologies; entry into new markets; changes in the organization; new ways to manage the human resources; new ways to manage the R&D and new ways to manage the accounting and finance. Following previous studies (Foss et al, 2013;Rovelli et al, 2020), we selected four items as related to innovation: new products and services, new technologies, new markets and new ways of managing R&D. The higher are the averages of these four items, the higher is the number of innovation opportunities realized. We validated this classification by means of a Confirmatory Factor Analysis and we used the corresponding factor as a measure of Realized innovation opportunities.…”

“…CEO centric TMT is a dummy variable equal to one in j JOURNAL OF KNOWLEDGE MANAGEMENT j case the CEO adopted a CEO-centric TMT organizational configuration to structure its TMT. Following previous literature (De Rovelli et al, 2020), we derived this configuration from the interplay between six key elements of organizational design (i.e. delegation, incentives, coordination, communication formalization, size), running a two-step cluster analysis applied to these elements.…”

“…Among the different innovation outputs, the realization of innovation opportunities (Foss et al, 2015) has recently been found to be shaped by the influence exerted by the family on the business . As such, the success of family firms depends not only on their identification of innovation opportunities in the environment but also particularly on their realization of such opportunities (Barney et al, 2018;Rovelli et al, 2020). In this regard, family firms seem to be less prone to realize innovation opportunities to prevent the jeopardization of the family wealth, thus causing them to invest less in entrepreneurial endeavors than non-family firms (Goel and Jones, 2016).…”

The effects of firm financialization on human resource management: How financialization affects the design of managerial jobs

“…The dependent variable Delegation measures the extent to which strategic decisions are delegated along the firm's hierarchy. The survey questionnaire was inspired by previous studies (e.g., Dean & Sharfman, 1996; Pugh et al., 1968; Rovelli et al., 2020) and included a list of 17 strategic decisions relating to firms' main functional activities (R&D, production, sales) and supporting processes (IT, HRM, business development) (Table 1). Following Colombo and Delmastro (2004), CEOs were asked to indicate whether these decisions are usually made by: 1, the board of directors; 2, the CEO; 3, the managers reporting to the CEO, with formal authorization by the CEO required; 4, the managers reporting to the CEO, autonomously; and 5, other (middle‐level) managers.…”

A Typology of Emerging Market SMEs’ COVID‐19 Response Strategies: The Role of TMTs and Organizational Design

“…Whilst prior research on UET identifies the influence of industry‐level changes during a crisis, much less is known on micro‐level issues such as how boards and TMTs respond to crises (Merendino and Sarens, 2020 ; Mumford et al ., 2007 ; Verbeke and Yuan, 2020 ). Furthermore, limited UET research to date has studied the influence of TMTs on organizational design (Lewin and Stephens, 1994 ; Rovelli et al ., 2020 ) and how they may affect firms’ responses to extreme black swan events.…”