The influence of top management team functional diversity on strategic orientations: The moderating role of environmental turbulence and inter-functional coordination

Despite the fact that most strategic orientations are initiated at the top management team (TMT) level, very little is understood about how the composition of the constituents' functional diversity influences the effectiveness of strategic orientations. We develop a contingency model that examines this relationship under varying levels of environmental turbulence and inter-functional coordination. Our central thesis is that under conditions of high environmental turbulence, functionally diverse TMTs will be less able to achieve greater strategic orientation due to their functional differences. Conversely, when equipped with inter-functional coordination, we posit that TMT functional diversity will lead to greater strategic orientations under conditions of high environmental turbulence. Using data obtained from TMT executives in the manufacturing industry, we tested our model and found support for a negative TMT functional diversity x environmental turbulence interaction and a positive TMT functional diversity x environmental turbulence x inter-functional coordination interaction on technological and entrepreneurial orientation. We discuss implications for marketing theory and practice.