Top management team diversity and firm performance: the effects of team orientation and process "a study of Australian SME"

Previous research on the relationship between top management team (TMT) diversity and firm performance has reported inconsistent findings. Following scholars' suggestions and in an attempt to provide a better understanding of the role of TMT diversity, this study examines a relatively new aspect of managerial cognition known as "metacognition". It integrates insights from entrepreneurship literature with the upper echelons perspective to introduce the concept of TMT metacognitive diversity to the existing discussion on the TMT diversity-firm performance relationship. To further reveal how and under what conditions TMT metacognitive diversity functions effectively, this study integrates entrepreneurial orientation and TMT behavioral integration as a mediator and moderator respectively. Eleven hypotheses were developed and tested using the structural equation modeling (SEM). To supplement the survey data, seven semi-structured interviews (two TMTs) were conducted. Based on both the quantitative and qualitative findings, several theoretical and managerial implications were developed. This research makes a contribution to both upper echelons and entrepreneurship literature. It enriches upper echelons research by going beyond the traditional focus on TMT demographics and directly measuring managerial cognition. It advances the entrepreneurship literature by explaining entrepreneurial initiatives from the upper echelons perspective. Suggestions are made for future research.