Value of Top Management Team Diversity in Driving Strategic Change, Strategic Leadership and Its Impact on Performance of Firms: A Critical Review of Empirical Evidence

Abstract

Confronted with complexities in the operating environment, contemporary organizations are forced to seek high quality management strategies that allow them to gain sustained competitiveness and ensure optimal performance. Pursuit of Top Management Team (TMT) diversity is one of the key strategies applied in the modern organizations to optimize performance. This study sought to review previous research assessing the influence of TMT diversity on performance of organizations while considering the effects on strategic change, strategic leadership and external environment. This was achieved by systematically reviewing 28 studies selected from various sources to find out the earlier findings on this topic. The study found that prior research suggests that TMT diversity impacts the performance of organizations. In addition, exploring the other dimensions of strategic change, strategic leadership and external environment indicated that outcomes change over time as TMT members interact over the years, though none of the studies reviewed directly assess this relationship. This article reviewed a selection of studies on TMT diversity and concluded with suggestions and implications of future research in this topic. Finally, the study found no evidence of previous research that linked or established the joint influence of TMT diversity, strategic change, strategic leadership, external environment on organization performance. Therefore, the study recommended in-depth scientific research on the influence of strategic change, strategic leadership and external environment on the relationship between top management team diversity and organizational performance.