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Abstract

Research on strategic decision making has considered advice-seeking behaviour as an important top management team attribute that influences organizational outcomes. Yet, our understanding about how top management teams utilize advice to modify current strategies and pursue exploratory innovation is still unclear. To uncover the importance of advice seeking, we delineate between external and internal advice seeking and investigate their impact on exploratory innovation. We also argue that top management team heterogeneity moderates the impact of advice seeking on exploratory innovation. Findings indicated that both external and internal advice seeking are important determinants of a firm's exploratory innovation. In addition, we observed that top management team heterogeneity facilitates firms to act upon internal advice by combining different perspectives and developing new products and services. Interestingly, heterogeneous top management teams appeared to be less effective to leverage external advice and pursue exploratory innovation. Copyright (c) 2010 The Authors. Journal of Management Studies (c) 2010 Blackwell Publishing Ltd and Society for the Advancement of Management Studies.

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... This study seeks to identify two critical underlying microfoundations of DMC rooted in managerial social capital that enable managers to sense and seize BM opportunities and to reconfigure the firm's BM. Drawing on the advice seeking literature, which has shown that managers refer to internal and external sources of advice for strategic decision-making (Alexiev et al., 2010;Brooks et al., 2015;Heyden et al., 2013;van Doorn et al., 2017), this study conceptualizes internal and external advice seeking capabilities as critical components of managerial social capital underpinning DMC for BMI. Prior studies have highlighted the importance for the firm to orchestrate an operational environment with high coordination flexibility. ...
... It is acknowledged that managerial capabilities are subjective, leading to heterogeneous decisions and leadership styles (Felin et al., 2012). As a result, heterogeneous managerial capabilities contribute significantly to variations in firm innovation and overall performance (Alexiev et al., 2010;Quigley & Hambrick, 2012). The ways in which managers interpret their environment and seize certain business opportunities are influenced by the microfoundations that underlie DMC (Adner & Helfat, 2003;Helfat & Peteraf, 2015). ...
... While internal advice seeking refers to gathering knowledge and information within the firm, external advice seeking focuses on capturing information from formal and informal ties outside of the company. Both sources of advice seeking can be used for strategic decision-making (Alexiev et al., 2010;Brooks et al., 2015;Heyden et al., 2013;van Doorn et al., 2017). ...
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Research Summary Although business model innovation (BMI) is said to be underpinned by managerial capabilities, there is a lack of studies that delve into the mechanisms through which these capabilities support BMI. In this study, we highlight internal and external advice seeking as underlying microfoundations of dynamic managerial capabilities for BMI and examine the mediating role of coordination flexibility capabilities (CFCs). With a survey dataset of 254 senior managers, our research reveals that external advice seeking capabilities positively influence BMI. Interestingly, the impact of internal advice seeking on BMI is fully mediated by CFC. Furthermore, our results indicate that the extent to which internal advice seeking impacts CFC is strengthened in firms with high levels of digitalization. Managerial Summary While business model innovation (BMI) is often linked to the skills of managers, there is a lack of research exploring which particular skills actually drive BMI. In our study, we focus on how seeking advice internally and externally are crucial skills for managers in contributing to BMI, with coordination flexibility capabilities (CFC) playing a mediating role. Using data from a survey of 254 senior managers, we found that seeking external advice has a positive impact on BMI. Surprisingly, the influence of seeking internal advice on BMI is only significant when firms have high CFC at the organizational level. Additionally, we discovered that the relationship between internal advice seeking and CFC is stronger in highly digitalized firms.
... Among the variety of stimuli that may affect managers' decision-making processes, the extant literature has attributed a notable importance to the role of external and internal advice (Aschauer et al., 2023;Bonaccio and Dalal, 2006;Alexiev et al., 2010). When making strategic decisions, managers typically consult both internal and external advisors. ...
... It has been demonstrated that both types of adviceseeking behavior have some beneficial effects on organizational decision-making processes (McDonald et al., 2008). More specifically, they have been connected to improved organizational performance and exploratory innovation (Alexiev et al., 2010). ...
... By increasing confidence among those involved, internal advice can promote creativity and collaboration within the upper management team (Alexiev et al., 2010). In line with this, it was discovered that internal advice-seeking increases decision-maker's confidence and assurance, especially in high-uncertainty scenarios (McDonald et al., 2008), and validates the preexisting ideas of decision-makers (McDonald and Westphal, 2003). ...
Article
Purpose The purpose of this study is to investigate managers’ decision-making processes when evaluating suggestions provided by human collaborators or artificial intelligence (AI) systems. We employed the framework of Social Comparison Theory (SCT) in the business context to examine the influence of varying social comparison orientation levels on managers’ willingness to accept advice in their organization. Design/methodology/approach A survey was conducted on a sample of 192 US managers, in which we carried out an experiment manipulating the source type (human vs AI) and assessing the potential moderating role of social comparison orientation. Results were analyzed using a moderation model by Hayes (2013). Findings Despite the growing consideration gained by AI systems, results showed a discernible preference for human-generated advice over those originating from Artificial Intelligence (AI) sources. Moreover, the moderation analysis indicated how low levels of social comparison orientation may lead managers to be more willing to accept advice from AI. Research limitations/implications This study contributes to the current understanding of the interplay between social comparison orientation and managerial decision-making. Based on the results of this preliminary study that used a scenario-based experiment, future research could try to expand these findings by examining managerial behavior in a natural context using field experiments, or multiple case studies. Originality/value This is among the first studies that examine AI adoption in the organizational context, showing how AI may be used by managers to evade comparison among peers or other experts, thereby illuminating the role of individual factors in affecting managers’ decision-making.
... Executives, most of the time CEOs, often look to other sources of information and advice when taking a strategic decision, whether the goal is to improve the overall performance of the organization, to invest in new markets or products, or to improve the internal processes and systems within the organization (McDonald & Westphal, 2003;McDonald, Khanna, & Westphal, 2008). Advice seeking can be considered a valuable behavior for executives looking to receive strategic input regarding a strategic goal (Arendt, Priem, & Ndofor, 2005;Alexiev, Jansen, & Van den Bosch, 2010;Cumming & Fischer, 2012). The upcoming field of research focusing on CEO advice seeking states that the fact that CEOs and top management teams (TMT) in organizations believe that strategic advice from other individuals or groups in and outside the organization can turn out to have an organization-wide impact (McDonald & Westphal, 2003). ...
... McDonalds and Westphal (2003) realized that CEOs who ask for strategic advice from other executives are more prone to execute a change in the organization's strategy so as to improve a poorly performing organization. On the other hand, Alexiev et al. (2010) state that top management teams that display an advice-seeking behavior from outside sources are more likely to be innovative. In addition, McDonald et al. (2008) discovered that formal advice seeking relationship rather than informal advice-seeking relationships have a stronger relationship with organizational performance. ...
... Scholars in the field have also shown that advice-seeking behavior plays an active role in delivering material results in solving complex organizational problems such as weak organizational performance, reputational problems, or issues regarding exploratory innovation (Alexiev, Jansen, & Van den Bosch, 2010;Collins & Clark, 2003;Mehra, Dickson, Brass, & Robertson, 2006;McDonald & Westphal, 2003). However, there is limited empirical research about the antecedents of strategic advice-seeking behavior, specifically regarding leadership (CEO) and key roles (TMT) in the strategic decision-making process and its outcomes inside an organization. ...
Thesis
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Decision making, and strategic decision making have been a focal and popular area of management literature, and numerous scholars have conducted thorough research to explain the relationships between each antecedent, characteristic, or variable and the outcomes of the strategic decision process. In addition, recent studies have looked at decision making from an upper echelons" perspective and tried to investigate how the top management teams, boards of directors, and CEOs in organizations take such strategic decisions. Scholars have also looked at how these executives seek and utilize essential information that can be acquired either through internal or external resources, which is referred to as advice seeking behavior. The term "advice seeking behavior" has been recently attracting a lot of attention in the literature; however, the amount and depth of these studies have been rather limited and very specific. Therefore, this research aims to provide an integrated and explanatory approach to explain how the upper echelons in organizations, especially CEOs, take strategic decisions and how they seek advice during this process. In addition, the research also aims to combine the literature on strategic decision-making and the upper echelons by integrating leadership style literature to understand how each style affects advice seeking behavior. Finally, the research investigates how these behaviors affect strategic decision outcomes in terms of speed and quality.
... The moderation effect of TMT heterogeneity. TMT heterogeneity captures the diversity in functional, educational, industry, and organizational backgrounds of the TMT members (Alexiev et al., 2010;Heyden et al., 2013). Past research has shown that a heterogenous TMT, characterized by higher cognitive diversity, is more likely to steer the organization towards exploration in NPD (Mehrabi et al., 2021). ...
... (2013),Alexiev et al. (2010), andTalke et al. (2011). ...
Article
Purpose Prior research seldom explores the different structures of marketing presence in the top management team (MPTMT) and their impact on new product performance. In this paper, we distinguish among three structures of MPTMT: (1) a dedicated MPTMT; (2) a joint marketing and sales MPTMT; and (3) a joint marketing and other operations MPTMT. We then examine how these three structures of MPTMT are related to cross-functional integration in NPD and, subsequently, new product performance. Design/methodology/approach Path analysis is used to test the model using data collected from 139 U.S. manufacturing firms. We conducted two rounds of survey data collection (with a one-year gap) to assess the potential effect of common method variance. Findings The results show that, compared with no MPTMT, all MPTMT structures positively affect cross-functional integration in NPD, which, in turn, enhances new product performance. However, joint MPTMT structures have a greater impact than a dedicated MPTMT. Our moderation analysis also reveals that as TMT heterogeneity increases, the effect of dedicated MPTMT diminishes, but the effects of the other two joint structures remain positive and stable. Research limitations/implications The model could include alternative mediating organizational processes and performance outcomes. Practical implications The findings provide managers with insight on how to configure and leverage marketing influence in the upper echelons in both SMEs and large firms. Originality/value The findings of this study highlight the importance of delineating MPTMT structures, understanding how they create value, and specifying their boundary conditions.
... This consideration reaffirms that '…the discovery of a profit opportunity need not be "all in the head" of an enterprising individual but could instead be a socially distributed process that involves joint action possibilities and team entrepreneurship' (Harper, 2008: 613-614). Business teams' heterogeneity may be seen as a distinctive resource, which is particularly suitable for innovation exploration and exploitation, contributing a wider range of cognitive perspectives in decision-making of businesses (Alexiev et al., 2010;Koryak et al., 2018), conducive to fast adaptations and growth (Eisenhardt & Schoonhoven, 1990;Nason & Wiklund, 2018). ...
... Within this context, we assess the impact of ethnically diverse business teams to understand whether they may apply the more effective modes of generating innovation and in particular, if these SMEs engage in explorative innovation (Alexiev et al., 2010;Koryak et al., 2018). We form an expectation that ethnically diverse business teams are not only likely to produce more innovations (D'Ambrosio et al., 2019;Schneider et al., 2019), but also translate those innovations into stronger employment growth. ...
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Plain English Summary Culturally diverse business teams of small and medium-sized enterprises (SMEs) boost employment growth through a richer internal pool of knowledge, amplifying this effect via strategic choices. Exploring the impact of ethnic diversity within business teams on the employment growth of SMEs, we find that ethnically diverse teams tend to outperform more homogenous ones in terms of employment growth. We posit that this advantage arises from a richer pool of knowledge shared within diverse teams, which is facilitated by close cooperation within SME teams that builds internal social capital. Furthermore, diversity within business teams enhances attitudes of openness and tolerance that in turn may facilitate motivation and ability of team members to access knowledge outside the firm. This drives employment growth and also amplifies the effects of digitalisation, exporting, and innovation strategies. Our study suggests that fostering ethnic diversity within SME business teams can enhance both knowledge resources and social capital, affecting business growth. Entrepreneurs should consider embracing cultural diversity within their SME business teams as beneficial, while policymakers may appreciate that within-firms micro-effects of diversity may accumulate to help local community-building and economic development.
... A perception measure ensures that salient differences are measured, which may provide a more suitable proxy because team members act on their perceptions rather than reality (Lawrence, 1997) and may not see all objective differences as salient (Randel, 2002). However, few studies assess TMT diversity in terms of TMT members' perceptions (Alexiev, Jansen, van den Bosch, & Volberda, 2010;Mehrabi, Coviello, & Ranaweera, 2021;Mihalache et al., 2012). ...
... A second respect in which the literature concerning TMT diversity and innovation is deficient lies in distinguishing between informational diversity and value diversity in the TMT. Some studies (Alexiev et al., 2010;Mehrabi et al., 2021;Mihalache et al., 2012) use a direct measure from Campion, Medsker, and Higgs (1993), which asks TMT members about the TMT's characteristics, but these studies focus on informational characteristics and do not address values. In fact, most studies rely on proxies that reflect informational differences like educational background, functional background, or expertise (e.g., Chung et al., 2018;Li & Huang, 2019;Talke et al., 2011) and disregard diversity in values (Narayan et al., 2021). ...
Article
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This study extends the upper echelons literature by shedding light on the role of top management team (TMT) dissimilarity, a specific conceptualization of team diversity. TMTs are typically composed of members from different functional areas who have unique information and values. The perception of the degree to which TMT members view themselves as dissimilar from other team members affects the TMT’s decision-making and, therefore, organizational outcomes. However, research does not address this perspective of TMT diversity. We examine how informational and value dissimilarity among TMT members is associated with incremental and radical innovation capability. We survey top managers from various industries and use partial least squares structural equation modeling analysis to explore the association between TMT dissimilarity and innovation capability empirically. The findings show that informational dissimilarity is positively associated with incremental innovation capability. Value dissimilarity is negatively associated with incremental innovation capability, whereas it is positively associated with radical innovation capability.
... reports the results of the baseline multivariate regressions, incorporating both year-and industry-fixed effects, estimated according to Equation(1). Both columns indicate that the coefficients for ESOPRatio and ESOPDum are statistically significant at the 1% level. ...
... However, adopting these mechanisms would require careful consideration of local environmental policies and regulatory frameworks.In developed markets like the United States and Europe, where ESOPs are more widespread, companies might look to refine their ESOP structures based on the findings of this study. Ensuring broader participation across all employee levelsrather than concentrating ownership among top executives -could help firms avoid the negative moderating effects of high TMT ownership on sustainability performance(Alexiev et al., 2010). Additionally, this study's sectoral analysis suggests that industry-specific approaches to ESOP implementation may be necessary, as the impact of ESOPs on environmental and social sustainability outcomes varies significantly across different industries(Ermakova et al., 2023).In conclusion, this analysis provides a strong foundation for understanding the role of ESOPs in enhancing environmental and social sustainability across various markets. ...
Article
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The challenges of global warming, resource depletion, and environmental protection require immediate action from corporations, governments, and communities globally. Implementing environmental, social, and governance (ESG) measures represents a key strategy for corporations in addressing sustainability concerns. This study investigates how the ESG performance of publicly listed companies in China is influenced by employee stock ownership plans (ESOPs). Utilizing a dataset covering 4,464 publicly listed Chinese corporations from 2009 to 2022, this analysis employs fixed-effects regressions to reveal the beneficial impact of ESOPs on corporate ESG ratings. A firm’s transition from non-ESOP to ESOP status raises ESG ratings by 1.213, representing 22% of the ESG score’s standard deviation. The findings indicate that greater involvement of the top management team in an ESOP weakens the positive impact of the ESOP on corporate ESG performance. The positive impact of ESOPs on ESG performance is insignificant in the agriculture sector but more pronounced in the manufacturing and service sectors, where the transition to ESOP status results in ESG score increases of 1.122 and 1.500, respectively. The issue of endogeneity is addressed by utilizing a lagged ESOP independent variable and applying two-stage least squares regression with the average ESOP serving as the instrumental variable. The findings confirm that causality runs from ESOP to ESG rather than ESG influencing ESOP. AcknowledgmentThis study was supported by the Department of Education of Zhejiang Province – General Program (Y202249981, Y202353438), the Wenzhou Association for Science and Technology – Service and Technology Innovation Program (jczc0254), the Wenzhou-Kean University Student Partnering with Faculty Research Program (WKUSPF202404, WKUSPF202411), the Wenzhou-Kean University International Collaborative Research Program (ICRP2023002, ICRP2023004), and the Wenzhou-Kean University Internal Research Support Program (IRSPG202205, IRSPG202206).
... EI refers to the creation of knowledge that may have existed earlier in a di®erent setting but falls outside the current SBE know-how [Karamanos (2012)]. SBEs must recognize distant opportunities and devote their limited resources to EI [ Van de Vrande et al. (2009)], but often fail to do so and face risks of high uncertainty [Alexiev et al. (2010)]. Managers who explore EI also face punishment and blame for failed e®orts. ...
... From this perspective, seeking incubator assistance allows SBEs to extend across their boundaries of prior knowledge, increasing the possibility that their newly acquired knowledge resembles the existing ones, and thereby achieve successful internalization. By using incubator assistance, SBEs can potentially discover a new opportunity in CIK, strengthen their current absorptive capacity, or quickly respond to the needs of EI [Alexiev et al. (2010)]. Thus, SBEs have more incentives to use external slack through incubator assistance to complement access to CIK and further increase their absorptive capacity. ...
Article
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This study investigates how incubators provide feasible solutions to increase the opportunities for exploratory innovation (EI) of small business enterprises (SBEs). Participation in cross-industry collaborations (CICs) bridged by incubators provides the foundation for the view that SBEs access cross-industry knowledge (CIK) to increase their potential for EI. Hypotheses are tested using CICs of 489 SBEs of Taiwanese university-based incubators. Results show that accessing CIK has a significant and positive influence on the EI of SBEs. Business assistance, technological assistance, and coaching service also strengthen the benefits of CIK for EI. Business assistance and coaching service allow SBEs to increase EI regardless of access to CIK. However, this positive effect cannot be achieved through technological assistance alone but rather in combination with access to CIK.
... Different career backgrounds and life experiences bring alternative strategic perspectives, diverse decision-making criteria, and access to additional information to the team, which are potentially beneficial. Therefore, heterogeneity within TMTs affects cognitive pathways regarding opportunity recognition (Shepherd et al., 2017) and exploratory innovation (Alexiev et al., 2010). ...
... Articulating innovation strategies and specific projects involves interpersonal processes that exhibit different dynamics based on the TMT's gender composition. Many researchers adopt information exchange perspectives, suggesting that TMTs with a higher percentage of women benefit from more discussions, enhanced information exchanges, more controlled decision-making, reduced risk-taking propensity, and advice-seeking (e.g., Alexiev et al., 2010;Triana et al., 2019). However, only a few consider social categorization dynamics within TMTs and their effects on the interpersonal processes facilitating information exchange. ...
Article
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The demographic composition of a firm’s Board of Directors (BoD) and Top Management Team (TMT) has important consequences for organizational processes and outcomes. However, researchers have focused on the independent effects of diversity in these strategic leadership groups (SLGs), foregoing how it affects their interactions. We adopt a strategic leadership system perspective to account for tasks that a firm’s BoD and TMT perform independently, as well as shared tasks performed at their interface. Focusing on the innovation process as a context for strategic decision-making and implementation, we hypothesize inverted u-shaped associations for independent effects of BoD and TMT gender compositions on innovation inputs and TMT gender composition on outcomes. To account for interactions at their interface, we also propose moderating effects between BoD and TMT gender compositions on their relationships with innovation input and outcomes. We find support for our hypotheses within a panel of highly innovative U.S. firms between 2005 and 2018. These findings have important implications for strategic leadership and diversity researchers and may provide guidance on balancing the gender composition of SLGs at firms that pursue innovation.
... Rapid technological changes force small and medium-sized enterprises (SMEs) to innovate in ways that deviate from existing products, processes, and procedures to entice new customers (Chiesa & Frattini, 2011;Love & Roper, 2015). While these radical innovations can offer lasting advantages, they also bring significant risks and uncertainty (Miron-Spektor et al., 2011;Shkolnykova & Kudic, 2022) that are linked to the acquisition of new knowledge and skills that reside outside the organization (Alexander & van Knippenberg, 2014;Alexiev et al., 2010). ...
... In SMEs, directing innovation is the responsibility of the top management team (TMT), whose managerial discretion puts them in charge of firm innovation strategy (Alexiev et al., 2010;West & Anderson, 1996). TMT members engage in learning and knowledge consolidation processes that form the micro-foundations of firm innovation strategy (Senge, 1990). ...
Article
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Plain English Summary How can teams benefit from diversity? Two CEO approaches to power determine whether and when differences in learning behavior make SME top management teams more innovative. Top management teams (TMT) try to harness the power of diversity by combining team members who prioritize learning and constantly try to explore new areas with others who focus on implementing existing insights. This study investigates the effects of learning diversity in TMT on a firm’s innovation strategy in the context of technology ventures. First, we found that a moderate level of diversity in learning behavior is linked to more radical innovations but that too much diversity hurts firm innovativeness. Moreover, we show that the power that CEOs wield plays a central role in these processes: if CEOs are prestigiously powerful (i.e., when they hold many other board appointments), they can guide their teams in ways that allow them to benefit from learning diversity. However, if CEOs are structurally powerful (i.e., they are also chairperson of the own board), their TMT will struggle to harness the power of diversity and end up seeing less radical innovation in their firm. These findings contribute to research by offering a novel theoretical account of diversity in learning behavior. Our study has implications for the design of TMTs, in the context where these teams’ impact on firm innovation strategy is substantial.
... Another limitation of investigation on individual characteristics and firm innovation is uncovering the potential value of the process through which a particular entrepreneurial characteristic facilitates exploratory innovation; focusing only on individual characteristics may not illuminate exploratory innovation endeavors. Alexiev et al. (2010) pointed out that the important actions that make exploratory innovation possible must be elaborated to comprehend how innovation takes place fully. We argue that entrepreneurs with ZYT are likely to initiate certain innovative behaviors, i.e., an individual's involvement in innovative activities (De Jong and Den Hartog, 2010). ...
... Research suggests that top executive characteristics influence firm-level actions, such as strategic decision-making (Papadakis and Barwise, 2002), R&D spending (Barker and Mueller, 2002), and novel product innovation . Additionally, CEOs' attitudes are considered significant factors in firm innovation (Alexiev et al., 2010). Wu and Lin (2005) contended that, to attain a satisfactory understanding of situations and things, entrepreneurs must reflect multiple perspectives, and the cognitive thinking of a CEO should have its envisioned effect, influencing innovative behavior. ...
Article
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Hambrick and Mason (1984) identified that organizational outcomes—strategies and effectiveness—could be regarded as reflections of the values and cognitive bases of top executives in the organization. However, theory in entrepreneurship literature on how CEOs' characteristics transform resources to create value has been minimal. On the basis of Hambrick and Mason's "upper-echelons" perspective, the present study examines the influence of the Zhong-Yong thinking style of Chinese entrepreneurs on firm-level exploratory innovation. Our theorization sheds light on the intermediate processes linking Zhong-Yong thinking style with exploratory innovation. Results of a structured time-lagged (two-waves) survey investigation of 144 manufacturing SMEs in China indicate that the Zhong-Yong thinking style of Chinese CEOs increases their innovation behavior. Furthermore, the innovation behavior of entrepreneurs leads to the allocation of R&D resources, which increases exploratory innovation in Chinese SMEs.
... Thus, advice from external sources is likely to offer several interpretations to the extent that it entails different cognitive schemas processing specific information, allowing for the framing of issues and answers from a broader perspective [57]." Executives who consider external advice in their decision-making processes are more likely to acquire new knowledge on environmental changes and on opportunities according to Alexiev et al. [58]. Menon and Pfeffer [59] mention that external advice is often considered more impartial and therefore may also assist board members to reach consensuses thanks to the provision of independent analyses and evaluations of proposals [58]. ...
... Executives who consider external advice in their decision-making processes are more likely to acquire new knowledge on environmental changes and on opportunities according to Alexiev et al. [58]. Menon and Pfeffer [59] mention that external advice is often considered more impartial and therefore may also assist board members to reach consensuses thanks to the provision of independent analyses and evaluations of proposals [58]. When sustainability initiatives are voluntary, it is important for each project proposed by a director to be supported by an external opinion to convince the other directors. ...
Article
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The financial industry can play a significant role in reaching the sustainability goals. But there is a lack of attention to the part financial advisors can or should play. By advising SMEs on sustainability, financial advisors are in the position to make a large impact. To do that, financial advisors must not only advise on creating financial value but also on social and ecological value. By advising on creating multiple value and applying integrated thinking, financial advisors can provide sustainable financial advice to SMEs. And because of the large and diverse number of financial advisors for SMEs, they can make a difference in helping SMEs to become more sustainable. This article focuses on the role financial advisors can play and the impact they can make for SMEs in their challenge to become more sustainable. By combining theory on the value of advice, multiple value creation, and integrated thinking, specifically related to the challenges of SMEs on sustainability, the result is a definition of sustainable financial advice to stimulate the debate on the specific role of financial advisors in reaching the sustainability goals worldwide. Sustainable financial advice is financial advice with integrated thinking about multiple value creation with the aim to reach the sustainability goals.
... Director networks, which refer to the individual directors of a company's board of directors and the collection of direct and indirect connections established by simultaneously serving on at least one board of directors (Zona et al., 2018;Wang et al., 2019a), can reflect the degree to which an enterprise can obtain knowledge from the external environment. As a matter of fact, previous studies have indicated that companies often use their director networks to obtain knowledge and resources, which in turn promotes innovation (Grandori, 1995;Alexiev et al., 2010;Shi et al., 2019;Cortellazzo et al., 2019). Accordingly, director networks, serving as a link for knowledge transmission from the external to the organisation, are of significant interest to enterprises when investigating the boundary-spanning factors of DI (Raddant and Takahashi, 2021;Wu and Dong, 2021). ...
... The literature suggests that firms engage in alliances every three to five years (Kumar and Zaheer, 2019), hence the threeyear moving window. We included two team-level controlsaverage executive age and executive team size -as both have been found to impact a firm's level of innovation (Alexiev et al., 2010;Davidson III et al., 2007). We also controlled for executive board members' relative stock compensation by dividing executive board members' stock compensation by non-board executives' stock compensation. ...
Article
Much of the current thinking on board composition suggests that the presence of executive directors as internal board members is detrimental to a firm’s innovation. Our intention in this research paper is to grant greater nuance to this relationship. Specifically, we examine whether factors that give an executive director greater knowledge regarding the firm’s innovative capabilities (involvement in R&D and their organizational tenure) act to influence firm-level innovation. Using a dataset of 300 firms from three R&D intensive industries spanning a 6-year period, we find that these two characteristics serve to offset the negative effects of executive directors on innovation. Our findings offer enhanced guidance to scholars and practitioners who are concerned about the presence of insiders on boards of directors.
... Compared to large firms, small firms often have flatter hierarchies, fewer bureaucratic constraints, and closer interactions between TMT members and other organizational members, which give their TMTs high levels of managerial discretion in adopting and implementing entrepreneurial strategies. For instance, top managers in smaller firms can compensate for limited resources with their personal capabilities and direct involvement in both strategic and operational roles (Alexiev et al., 2010;Lubatkin et al., 2006). Reduced board oversight and higher ownership concentration among executives also enhance TMTs' managerial discretion in decision-making about entrepreneurial activities (Robson & Bennett, 2000;Zahra et al., 2000). ...
Article
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How do the attributes of a firm's top management team (TMT) influence corporate entrepreneurship across organizational and national contexts? Drawing on upper echelons theory and the managerial discretion perspective , this meta‐analytic study examines the dynamic relationship between TMTs' attributes and corporate entrepreneurship, focusing on the moderating role of managerial discretion arising from organizational and national‐level factors. To provide insights into the micro‐foundations of firm behavior, we explore how key TMT attributes—diversity, size, transformational leadership, tenure, general human capital, and entrepreneurial human capital—affect corporate entrepreneurship. A comprehensive meta‐analysis of 57 primary studies reveals that the effect of a TMT's attributes is context‐dependent and is significantly influenced by the approach to managerial discretion taken by the country in which the firm operates. By showing that transformational leadership and the TMT's entrepreneurial human capital and size affect corporate entrepreneurship, while attributes like tenure, diversity, and general human capital have limited or no impact, our findings challenge the prevailing view that a standardized approach to the TMT's composition drives corporate entrepreneurship. The study also underscores the role of the national‐level managerial discretion and finds that firms in institutional environments that feature low managerial discretion must align their TMT strategies with local institutional contexts to maximize their corporate entrepreneurship. These findings advance upper echelons theory by demonstrating that managerial discretion acts as a boundary condition in shaping how the TMT's attributes influence corporate entrepreneurship based on the national context. This research contributes to the fields of strategic and innovation management and offers practical insights for leaders who seek to harness the full potential of their TMTs.
... It affects the perceived richness of the need and solution landscapes. The literature confirms the impact of bottom-up learning on innovation performance and practice (Beer et al., 1990;Alexiev et al., 2010). We controlled for bottom-up learning with the item "Firms use frontline employees as a key knowledge source." ...
Article
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Despite the acknowledged importance of learning from universities, the literature offers inconclusive evidence of its value for innovation. Addressing this inconsistency, we aim to explore how learning from universities affects firm innovation from the knowledge transformation perspective. We find that learning from universities plays different roles in the identification of need–solution pairs and the transformation of need–solution pairs into new products. Specifically, we find that learning from universities has an inverted U shaped effect on innovation: it exerts a positive effect on need–solution pair identification and a negative effect on the transformation of identified need–solution pairs into innovation performance. The negative role of learning from universities is weaker when the levels of R&D intensity, product modularization, and demand heterogeneity are higher. Empirical evidence based on data collected via an on-site survey of 360 Chinese high-tech firms supports our hypotheses. We confirm the robustness of our results using a separate set of survey data. This research contributes to the literature on learning from universities and technology transfer by offering insights into the role of academic knowledge in firm innovation. We further contribute to the knowledge transformation literature by exploring boundary conditions on the transformation of academic knowledge into firm innovation.
... Studies on exploratory innovation in the literature are limited. Studies demonstrate that there is an association between this type of innovation and organizational antecedents (Jansen, Van Den Bosch, and Volberda, 2006), environmental moderators (Jansen, Van Den Bosch, and Volberda, 2006), environmental antecedents (Jansen, Van Den Bosch, and Volberda, 2005), alliance network structure (Phelps, 2010), knowledge and collaboration networks (Wang et al., 2014), external and internal advice seeking (Alexiev et al., 2010), firm performance (Li, Zhou, and Si, 2010;Jian-li, 2009), organization's knowledge elements (Guan and Liu, 2016), relational, cognitive, and structural social capital (Li, Zhang, and Zheng, 2016), geographic network diversity (Bahlmann, 2014), workforce aging (Park and Kim, 2015), geographic and network ties (Ozer and Zhang, 2015). Huang, Ding, and Chen (2014) determined that environmental dynamism had a moderation effect on the relationship between entrepreneurial leadership and exploratory innovation. ...
Article
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The study seeks to investigate how corporate stakeholder responsibility acts as a mediator, elucidating the impact of workplace belongingness on both exploratory innovation and exploitative innovation within the retail sector. In 2020, this research enlisted 171 executives from retail businesses registered with the Adana Chamber of Commerce in Adana, Turkey. Employing structural equation modeling, the study analyzed data through the lens of social exchange, stakeholder theory, and organizational change management theories. According to the research findings, it was determined that workplace belongingness had positive effects on corporate stakeholder responsibility, corporate stakeholder responsibility had positive effects on exploratory innovation and exploitative innovation, workplace belongingness had positive effects on exploratory and exploitative innovations. Further analyses revealed that corporate stakeholder responsibility acted as a significant mediator in the relationship between workplace belongingness and both exploratory and exploitative innovation.
... Firstly, as the allocator of slack resources [35], TMTs would draw on the multiple perspectives and keen insights into new opportunities accumulated from heterogeneous career backgrounds [36] that can quickly capitalize on R&D human resource slack and leverage the potential of their professional skills, thus contributing to the enhancement of independent innovation capabilities. ...
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... A diverse executive team can lend a company richer cognitive resources and provide strong motivation for organizational innovation, change, performance, and strategic decision-making [11,12]. Alexiev et al. [13] confirmed that when the senior management has diverse work experience and educational backgrounds, it can significantly increase innovation inputs. Optimizing the structure of the senior management team can also help increase the innovation input of the enterprise. ...
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Against the background of increasingly severe environmental problems, green development has gained widespread attention, and green innovation has thus become crucial for enterprises. This study used 2007–2019 data from listed A-share companies in China to evaluate the effect of senior executives’ overseas experience on corporate green innovation. The results showed that senior executives’ overseas experience could promote green innovation in companies. This positive effect was more significant for private enterprises and high-tech enterprises, especially in eastern China. The CEO pay regulation have a significant negative moderating effect on this positive effect. This study enriches upper echelons theory and provides theoretical support for government agencies to accelerate innovative green development strategies. The results can also provide a decision-making basis for governments to formulate policies to promote enterprises’ green development.
... For example, employees responsible for budget execution provide managers with confidential information, thereby improving communication between managers and employees regarding budgets (Dunk & Nouri, 1998;Merchant, 1985). Managers can enhance their decision-making by utilising accurate information from internal and external sources when using job-relevant information (Alexiev et al., 2010). The application of contingency theory to job-related information aims to investigate how relevant information affects the link between participative budgeting and budgetary slack (Brink et al., 2018). ...
... As the manager and operator of the enterprise, the CEO has the right to allocate enterprise resources and make decisions and is the primary person in charge of the enterprise's operating results. As pointed out by upper echelons theory, the personalities and preferences of CEOs are regarded as important factors affecting corporate strategic decisions (Alexiev et al., 2010;Gu, 2023). The most notable feature in the appointment of CEOs between family and non-family firms is whether the position is filled by a member of the family rather than an outsider, which will directly lead to differences in corporate strategic decision-making (Miller et al., 2014). ...
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It is crucial to investigate the characteristics of digital transformation strategy decision-making in family businesses. In this paper, the Chinese A-share listed family enterprises on the Shanghai and Shenzhen stock markets from 2008 to 2020 are used as a sample to analyze at how the CEO source affects the enterprises’ digital transformation and how the CEO ability and family willingness affect the boundary conditions of the decision-making. According to the findings of the study, family CEOs are more capable of promoting the digital transformation of family businesses. Whether it is general human capital obtained through formal education or firm-specific human capital obtained through work experience, they all positively moderate the relationship between family CEOs and enterprises’ digital transformation decisions. Surprisingly, family control and influence have no moderating effect, which may be due to the superimposition of the willingness to pursue growth, whereas the willingness to pursue transgenerational sustainability is a negative moderator, indicating that family businesses in China are still in the early stages of succession. This study not only uncovers the disparities in the impacts of different types of CEOs on the digital transformation of family businesses, but also provides empirical evidence and managerial implications for fostering the family businesses’ digital transformation.
... In the context of K-12 education reform, social networks have become vital for educators to communicate and seek advice, providing access to new ideas and perspectives that can enhance their work (Alexiev et al. 2010). Networks are believed to foster a positive campus climate and improve student outcomes (Daly et al. 2014). ...
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... Further, it reflects the influence that executive groups have on the various functions of an organization. Characteristics of executive teams have been shown to affect numerous organizational outcomes, including firm performance (Certo, Lester, C. Dalton, and D. Dalton 2006;Norburn and Birley 1988), innovation (Alexiev, Jansen, Van den Bosch, and Volberda 2010), information technology adoption and performance (Chuang, Nakatani, and Zhou 2009;Krake 1995), global strategic posture (Carpenter and Fredrickson 2001), and total quality management adoption (Dubey et al. 2018). This research illustrates the importance of the collective executive group to firm strategy and behavior. ...
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We explore the impact of turnover within top executive teams, with particular emphasis on executives other than the CEO and chief financial officer (CFO), on auditors’ perceptions of financial reporting risk. Consistent with upper echelon theory, we find that non-CEO/non-CFO executive team turnover increases perceptions of financial reporting risk even with continuity of the CEO and CFO. Additionally, we find that the effect of CEO and CFO turnover on perceptions of risk is primarily driven by concurrent turnover with other top executive team members. Further, the effect of other top executive turnover is more pronounced among firms that had higher-ability managers and that face greater constraints in replacing top talent. This effect is partially mitigated when the firm has an effective financial reporting environment and when the CEO who remains in place has greater operational involvement. These findings highlight the importance of other top executive turnover in risk assessments. Data Availability: Data are available from the public sources cited in the text. JEL Classifications: G30; M12; M41; M42.
... Exploratory innovation is a process of searching or discovering new knowledge and introducing new methods or materials of knowledge dimensions into an organization (Guan and Liu, 2016;Karamanos, 2012;March, 1991). Its goal is to provide new designs, create new products, and develop new distribution channels for emerging customers or markets by broadening the existing knowledge base (Alexiev et al., 2010). Undoubtedly, exploratory innovation can assist enterprises, particularly those in traditional industries with relatively low technological levels, to enter new technology fields and further promote technological progress and value growth (Ahuja and Lampert, 2001). ...
... An increased level of advice exchange among team incumbent members facilitates the information sharing process and helps the team successfully overcome obstacles in the creative process (Gabbay & Zuckerman, 1998). With more ideas and increased information sharing among team members, a team can become creative gradually (Alexiev et al., 2010;Han et al., 2014;Wei creativity (Jia et al., 2014). In sum, we argue that although newcomers' networking behavior may have a small initial impact, their ties with incumbents will have a ripple effect on the team incumbents' social network structure, leading to a denser team creative catalyst network over time, in turn, increases team creativity over time. ...
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The influencing factors of corporate greenwashing have consistently captivated scholarly attention. Drawing from Upper Echelons Theory and Strategic Recognition Theory, this study proposes that the green cognition of top management plays a critical role in shaping greenwashing practices. Furthermore, it is argued that this relationship may be moderated by factors such as political connections and the stringency of environmental regulations. To clarify these issues, this study utilizes a panel model with samples of Chinese listed firms that contain fundamental data and variables from 2012 to 2020. The results show that: 1) TMT environmental cognition restrain greenwashing behavior significantly by promoting genuine environmental efforts. 2) The inhibitory effect of TMT environmental cognition on greenwashing behavior is more pronounced in firms without political connections than those with political connections. 3) TMT environmental cognition has a significantly positive impact on environmental disclosure scores for private owned or political connection firms, except for state-owned or no political connection firms. 4) The level of political connection of firms and the intensity of environmental regulations have respectively strengthened or weakened the link between TMT environmental cognition and greenwashing behavior.
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This study investigates CEOs' advice-seeking behavior in small-and medium-sized enterprises (SMEs) and its influence on managing the financial difficulties these firms face. Grounded in the attention-based view of firms, our framework posits that CEOs' advice seeking plays a sequential role in shaping a firm's response to financial distress, by influencing CEOs' awareness of financial difficulties and, subsequently, the restructuring process. We differentiate between advice sought from formal and informal advisors and consider top management team (TMT) functional diversity as a moderator. We test these hypotheses using a proprietary dataset of 407 financially distressed SMEs in France. Our results indicate that advice seeking significantly enhances CEOs' decision to proceed to restructuring and this effect is mediated by the heightened financial awareness of CEOs. Furthermore, our research highlights the moderating role of the functional diversity of TMT members in the relationship between advice seeking and the restructuring decision.
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Interest in the problem of method biases has a long history in the behavioral sciences. Despite this, a comprehensive summary of the potential sources of method biases and how to control for them does not exist. Therefore, the purpose of this article is to examine the extent to which method biases influence behavioral research results, identify potential sources of method biases, discuss the cognitive processes through which method biases influence responses to measures, evaluate the many different procedural and statistical techniques that can be used to control method biases, and provide recommendations for how to select appropriate procedural and statistical remedies for different types of research settings.
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This article contributes to the social networks literature by examining how corporate governance factors influence CEOs' external advice-seeking behaviors. We incorporate insights from social networks research into an agency theory perspective to predict, and demonstrate empirically, that governance factors recommended by agency theory increase CEOs' tendencies to seek out advice contacts who are likely to offer perspectives on strategic issues that differ from their own; these advice-seeking behaviors ultimately enhance firm performance. Accordingly, this article also contributes to the corporate governance literature by describing how and why CEOs' advice networks mediate the effects of governance factors on firm performance.
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The central premise of upper echelons theory is that executives' experiences, values, and personalities greatly influence their interpretations of the situations they face and, in turn, affect their choices. At the invitation of the editor, I recap the AMR article in which the theory was originally presented (Hambrick & Mason, 1984), discuss subsequent refinements of the theory, and lay out several promising avenues for future upper echelons research.
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Extending Hambrick's (1994) concept of behavioral integration, a meta-construct of top management team process, we theorized on the extent to which CEO-, team-, and firm-level determinants shape behavioral integration. Using survey data from 402 firms, we developed a reliable measure of the construct and found strong support for our structural model. Although determinants at each level explained some variance in behavioral integration, considering all three levels in concert explained the most variance.
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We compare two alternative approaches for evaluating the potential of a work group or team: one that focuses on team members' demographic characteristics and one that focuses on the members' social networks. Given that people's network contacts often share their demographic attributes (i.e., the network is homophilous), the two approaches seem equivalent and the first seems preferable because it is easier to implement. In this paper, we demonstrate several important limits to this rationale. First, we argue and show, in an analysis of 1,518 project teams in a contract research and development firm, that even when internal organizational networks are significantly homophilous with respect to demographic variables, the very logic of the causal structure that underlies theories of demographic diversity carries ambiguous performance implications. This ambiguity is due to the fact that demographic diversity has opposing effects on two social network variables—internal density and external range—each of which has a positive effect on a team's performance. We also demonstrate that a focus on demographic criteria is problematic because the demographic makeup of an organization can place inherent limits on a manager's ability to shape the demographic composition of a team. The ambiguous performance implications and the inherent limits placed on a manager's ability to manage a team's demography reduce the likelihood that a manager's interventions will be successful. The performance implications of managing a team's social capital, however, are clear.
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This study examined how top management team diversity variables and debate interacted to influence two measures of company financial performance. Further, it assessed the degree to which decision comprehensiveness mediated those interaction effects. Multi-informant data from the top management teams of 57 manufacturing companies revealed that more job-related types of diversity interacted with debate to influence financial performance, but a less job-related type (age diversity) did not. Decision comprehensiveness partially mediated those effects.
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This study examines how the movement of top managers across organizations (executive migration) over an 18-year period in the semiconductor industry influences strategic change, specifically, entry into new product markets. Results support the argument that executive migration brings managers into the organization with prior exposure to different products and strategies, which in turn is reflected in subsequent product-market entry decisions by the executive's new firm. Results also show that the effects of executive migration are influenced by attributes of the executive and characteristics of the top management team of the focal firm. The effects of executive migration on product-market entry are stronger when the new managers came from the functions of R&D and engineering, when they reported to the chief executive in their former organization, and when they had greater industry experience. Attributes of the focal firm's top management team also appear to moderate the influence of the new executive. Smaller top management teams and teams with shorter tenures demonstrate a stronger relationship between executive migration and strategic change.
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Top-level planning decisions of an organization are examined in the framework of Cyert and March's A Behavioral Theory of the Firm. Six decisions are studied and analyzed in the Cyert-March framework, and some concepts from the behavioral theory of the firm are revised in the light of the results obtained. Major additional criteria suggested as of major importance in the framework of an extended Cyert and March approach are: the impact of multiple organizational levels on decisions; the bilateral bargaining between project proponents and those managers responsible for review of proposals; the influence of technology and general uncertainty in the environment upon criteria for project evaluation; the nature of an active stimulus for search induced by corporate strategy rather than the more passive, crisis-induced stimulus suggested by Cyert and March; the concept of a threshold-level system by which projects quickly are rated or evaluated on multiple attributes; and the Pollyanna-Neitzsche effect, by which ex post uncertainty absorption can be used by firm members to induce a positive-thinking approach to subsequent performance. Although some writers, for example, Ansoff (1965), have noted the empirical evidence presented by Cyert and March dealt primarily with operating decisions, this single field study offers evidence that a broadened Cyert and March approach is useful for understanding decisions that are partly in the broader field of corporate strategy.
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When adaptation requires innovation, or the creation of variety, exploration is crucial. High levels of exploration thus imply variance-seeking rather than mean-seeking learning processes. In a study of 56 new business development projects, given high exploration, organizational learning was more effective when the projects operated with autonomy with respect to goals and supervision. As degree of exploration de creased, better results were associated with less autonomy on both counts. This contingent effect persisted even when I controlled for the emergence of deftness and comprehension.
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Organizations evolve through periods of incremental or evolutionary change punctuated by discontinuous or revolutionary change. The challenge for managers is to adapt the culture and strategy of their organizations to its current environment, but to do so in a way that does not undermine its ability to adjust to radical changes in that environment. They must, in other words, create an ambidextrous organization—one capable of simultaneously pursuing both incremental and discontinuous innovation.
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Empirical research has typically rested on the assumption that board independence from management enhances board effectiveness in administering firms. The present study shows how and when a lack of social independence can increase board involvement and firm performance by raising the frequency of advice and counsel interactions between CEOs and outside directors. Hypotheses were tested with original survey data from 243 CEOs and 564 outside directors on behavioral processes and dynamics in management-board relationships.
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An inductive study of improvisation in new product development activities in two firms uncovered a variety of improvisational forms and the factors that shaped them. Embedded in the observations were two important linkages between organizational improvisation and learning. First, site observations led us to refine prior definitions of improvisation and view it as a distinct type of real-time, short-term learning. Second, observation revealed links between improvisation and long-term organizational learning. Improvisation interfered with some learning processes; it also sometimes played a role in long-term trial-and-error learning, and the firms displayed improvisational competencies. Our findings extend prior research on organizational improvisation and learning and provide a lens for research on entrepreneurship, technological innovation, and the fusion of unplanned change and order.
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We integrate the upper-echelons perspective with the attention-based view of the firm by examining the role of attentional orientation of top management teams (TMTs). In the context of airline deregulation, we find that deregulation caused a shift in managerial attention, but that this shift in attention was the greatest for firms that changed the composition and compensation of their TMTs in ways that favored the deregulated regime. We also find that attention partially mediated the relationship between TMT changes and strategy changes. The results of this study shed light on the transformation of industry attention patterns following an environmental shift, and the role of TMT composition and incentive systems in that process.
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This study investigates the types of championing processes that explain the innovativeness of 136 internal corporate ventures. Current theory suggests that bottom-up champions create the most innovative ventures. In contrast, this paper argues that both bottom-up and top-down champions are suitable for developing innovative ventures. Using a broadly based sample of Fortune 1000 firms, the study supports both bottom-up and top-down processes including a special dual-role principal champion, who acts both as product champion and organizational sponsor. The functions or roles of these top management and dual-role champions are quite different from bottom-up champions and represent relatively unexplored top-down championing processes. Preliminary results show support for an emerging theory that top management champions arise when ventures are expensive and visible and when they represent new strategic directions or resource reconfigurations for the firm. In contrast, dual-role champions emerge from the firm's upper ranks when an innovative idea is highly uncertain but not technology-driven. The paper proposes an integrative view of championing in which any one of three types of championing processes may be the most relevant for a particular venture, depending on what it needs to achieve innovative outcomes.