Scandinavian Working Papers in Economics

Papers in Innovation Studies,
Lund University, CIRCLE - Center for Innovation, Research and Competences in the Learning Economy

No 2019/3: Product Innovation and Educational Diversity in Top and Middle Management Teams

Torben Schubert () and Sam Tavassoli ()
Additional contact information
Torben Schubert: CIRCLE, Lund University, Postal: CIRCLE, Lund University, PO Box 117, SE-22100 Lund, Sweden
Sam Tavassoli: RMIT University, Postal: Australia

Abstract: The effects of diversity in management teams on firm innovation have become an important topic in strategic management. With a few exceptions, however, the literature has focused on diversity in Top Management Teams (TMTs), while the role of lower management levels, particularly in Middle Management Teams (MMTs), has usually been neglected. In this paper, we intend to fill this gap by explicitly differentiating between the effects of diversity in TMTs and MMTs. By matching various firm-level and individual-level datasets, we compiled a linked employer-employee panel dataset for Sweden for the period 2004–2012. Focusing on measures of educational diversity, we find that the effects differ considerably between MMTs and TMTs. TMTs diversity determines whether firms engage in innovation activities at all (strategic decision), while MMTs diversity affects the actual outcome of innovation processes (successful product innovations and their degree of market novelty).

Keywords: Product innovation; diversity; middle management; top management; firm performance

JEL-codes: M12; M14; O30

54 pages, February 12, 2019

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