Acquiring Top Management Team, Core Competence through Absorptive Capacity and Entrepreneurial Orientation

TLDR: In this article, the authors investigate the interrelationships among TMT characteristics, including absorptive capacity, core competence, entrepreneurial orientation and managerial performance, and conclude that firms characterized by higher entrepreneurial orientation, absorptive capacities, and core competence are more likely to gain excellent performance.

Abstract: Ever since   Hambrick   and   Mason   proposed   upper   echelon   theory   in   1984, Top Management  Team (TMT)  issues  have  been  received  tremendous  attentions  from  academician and  practitioners.  Especially  in  the  dynamic,  fast-moving,  and  global  world, the  importance  of TMT  has  become  inevitably  important  nowadays.  TMT  is  the  soul  of  organization  in  that  they make  strategic  decisions  which  effect  firm’s  future.  Furthermore,  splendid  performance  stems from the firm’s learning ability, the attitude toward entrepreneurial activities, and the emphasis of  core  competence,  all  of  these  issues  which  are  affected  by  TMT  characteristics.  Hence,  this study  attempts  to  integrate  relevant  literature  to  develop  a  comprehensive  research  model,  as well  as  to  investigatethe  interrelationships  among  TMT  characteristics,  absorptive  capacity, core competence, entrepreneurial orientation and managerial performance.Through  a  series  of  questionnaire  survey,  the  results  of  this  study  indicate  that  TMT functional  background  diversity  and  educational  background  have  significant  influences  on  a firm’s  absorptive  capacity  and  entrepreneurial  orientation,  which  further  impact  on  its  core competence. Furthermore, firms characterized by higher entrepreneurial orientation, absorptive capacity and core competence are more likely to gain excellent performance. The Result of this study  can  provide  important  references  for  academic  to  conduct  further  validation  and  also valuable for professional to recruit TMT members.