Over the past few decades, a substantial body of work has developed from the study of international issues relating to top management teams, particularly in relation to how firms formulate international strategies, how and where firms tend to grow their international businesses, and the performance outcomes of the choices made by them. This review provides a roadmap for navigating the large and diverse literature on the subject, critically analyses the content of that literature, and looks ahead to further research which is needed on the subject.
The review first sets out the scope of the work covered, then discusses the methodology and framework utilised in analysing the literature. It concludes by discussing the directions future research might take within each of the areas discussed. There are four key elements the authors use to describe and assess top management teams, which include the following: composition, structure, processes, and governance.
Composition refers to the collective characteristics of the members of top management teams. Structure refers to the roles of the individual members and the relationships among those roles. Processes pertain to the normative behaviours and the cognitive, social and political processes that occur within top management teams, as well as to the information flows between the members. Governance refers to how the teams are induced and motivated to behave in certain ways.
The authors then go on to categorise the wide range of topics that are central to the main theories utilised in international business research, particularly the key decisions firms make when transitioning from a national business to a multi-national enterprise and the outcomes that result from those decisions.
The topics covered are: (a) the scope of firms’ internationalisation; (b) the process by which firms achieve internationalisation; (c) where firms choose to internationalise; (d) the modes by which firms choose to enter a country; and (e) the performance outcomes of those choices.
Importantly, the framework set out above has enabled the authors to synthesise the contributions made by the literature on top management in international business and in particular, multi-national enterprises. Their findings indicate that top management teams tend to form into a sub-group of individuals within a firm who act in coalition and dominate the firm’s strategic decision-making.
Generally, the sub-group tends to be led by the firm’s CEO and typically includes a number of the most senior managers i.e., a relatively small group of executives at the strategic apex of the organisation with overall responsibility for it. Although it is acknowledged that the CEO is the leader and usually exerts the most influence and power, decision-making is typically shared and extends beyond the CEO.
However, where the organisation is a multi-national enterprise, it is not uncommon to find a more dispersed power structure whereby important decisions – particularly those concerning host markets – are made at the regional headquarters or national subsidiary level rather than at the corporate headquarters, and by persons who might not be so close to the strategic apex.
This review is a comprehensive collation and analysis of research carried out in the field over several decades and is a useful starting point for academics wishing to pursue further research into the subject. Ultimately, this may lead to innovative methods being developed for the selection of individual decision-makers in businesses and how the teams in which they operate are structured and governed, both in national and multi-national business enterprises.