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Boundary conditions of a curvilinear relationship between decision comprehensiveness and performance: The role of functional and national diversity

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  • Mitchell, Rebecca
  • Boyle, Brendan
  • Nicholas, Stephen
  • Maitland, Elizabeth
  • Zhao, Shuming

Abstract

This research examines top management team (TMT) functional and national diversity as moderators of a curvilinear relationship between decision comprehensiveness and organizational performance. Drawing on resource allocation theory, we argue that, despite the information-related benefits associated with decision comprehensiveness, the misallocation of limited TMT cognitive resources can generate an inverted U-shaped effect on performance. We hypothesize that functional and national diversity moderate this non-linear relationship, such that the impact of decision comprehensiveness in diverse teams will be significantly weaker than in their homogenous counterparts. Results from a sample of subsidiary TMTs of multinational companies (N=107) in China support the study hypotheses. We find evidence that decision comprehensiveness has no significant effect on performance for diverse TMTs. However, as hypothesized, we find support for a positive effect of decision comprehensiveness on organizational performance in relatively homogeneous TMTs up to an inflection point, beyond which the relationship becomes negative.

Suggested Citation

  • Mitchell, Rebecca & Boyle, Brendan & Nicholas, Stephen & Maitland, Elizabeth & Zhao, Shuming, 2016. "Boundary conditions of a curvilinear relationship between decision comprehensiveness and performance: The role of functional and national diversity," Journal of Business Research, Elsevier, vol. 69(8), pages 2801-2811.
    • Handle: RePEc:eee:jbrese:v:69:y:2016:i:8:p:2801-2811
    DOI: 10.1016/j.jbusres.2015.12.049
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