THE RELATIONSHIP BETWEEN LEADERSHIP TEAM DIVERSITY CHARACTERISTICS AND STRATEGIC CHANGE: A META-ANALYTIC REVIEW

 Without proper attention to strategy, organizations risk allowing opportunities to pass by and may be vulnerable to threats in their environment. Members of executive leadership make adjustments to strategy with the intention of preserving or improving future performance. The resulting outcome is strategic change. Because of the critical role the members of leadership have in leading strategic change, this relationship has been frequently studied. Furthermore, the diversity of leadership team makeup has broadened, increasing the significance of a better understanding of the relationship between diversity and strategic change.

To contribute to research on diversity and strategic change, this meta-analytic review aims to determine the extent to which leadership diversity impacts strategic change. In addition to the hypotheses I pose to explore this relationship, I will build on existing research by posing three research questions: (1) To what extent does industry have a moderating effect on the relationship between leadership team gender diversity and strategic change? (2) Which predictor is relatively more important for strategic change: firm age or leadership team gender diversity? (3) Which predictor is relatively more important for strategic change: board member tenure or board size? Based on previous research, the diversity characteristics used in this study are tenure, age, gender, functional background, and educational background. The final dataset used in this study includes 178 independent correlations derived from 25 articles.

First, the findings of this study suggest that leadership team diversity characteristics have minor impacts on strategic change. For example, leadership team member tenure had a small yet positive effect size (r = .0775, n = 30,831), as did age (r = .0066, n = 22,454) and gender (r = .0098, n = 21,906). In contrast, functional background had a small yet negative result (r = .0127, n = 30,503). Considering board member gender, this study found a minimal negative effect (r = .0020, n = 42,879).

Additionally, it appears that gender diversity in leadership teams is a more important predictor of strategic change when compared to firm age. Thirdly, while both variables contribute to strategic change, board size is more influential when compared to board member tenure. These results raise important questions: If leadership team diversity characteristics do not exert a significant influence on strategic change, what factors do? In the discussion section, I provide recommendations for future research on firm performance, standardization of measurement and definition, and other items to strengthen our understanding of strategic change.