A comparison of the international diversity on top management teams of multinational firms based...

Abstract

Numerous studies have examined the effects of diversity on team performance under a variety of circumstances, but little attention has been directed to the national composition or the international qualifications of top management teams.

The results of three exploratory studies of the extent of internationalisation among boards of directors and executives from samples of the largest multinational corporations (MNCs) based in the United States, Europe, and Asia are presented. The findings clearly show that European MNCs have a greater proportion of internationally qualified personnel on both their boards of directors and within the executive ranks than do USA-based companies. In both the USA and European samples, executives were more likely to have international qualifications than directors, while data from the Asian sample suggest that directors might be more likely to have international qualifications.

Key words: Strategy, Organisational Learning, Knowledge Productivity, Organisational Diversity, Top Management, International Diversity

Introduction

The last decade has seen increased globalisation of businesses. At the same time the national workforce in many countries has diversified (Adler, 1997). As a result of dealing with people from many different backgrounds both internationally and domestically on a daily basis, companies have to develop policies and processes that can minimise misunderstanding and harness the potential benefits of diversity.

While the internationalisation/globalisation is a worldwide phenomenon, it is interesting to note that companies have taken different routes in their attempt to globalise. Typically the goal behind the internationalisation is to capture new technologies, increase market share, and gain a competitive advantage. Nestle and Caterpillar (CAT), for example, have expanded their global networks by adding international subsidiaries and dealerships. DaimlerChrysler chose the path of a merger to span the globe. Furthermore, by buying a controlling share of Mitsubishi Motors, DaimlerChrysler was hoping to expand into the Asian market. Still another path is the purchase of foreign companies. The Swiss company Ciba Geigy bought the American company Funk Seeds to enter the seed business in the United States. Ciba Geigy then was bought by the Swiss company Novartis.