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Introduction
As Hambrick and Mason (1984) reported more than two decades ago, top managers play a crucial role in formulating strategies, as well as interpreting and responding to strategic issues. The upper echelon theory recognizes that managers’ demographic traits are indicators of their underlying attitudes, experiences, perspectives and cognitive schemas, which significantly condition their strategic decisions. However, the organizational demography approach (Lawrence, 1997) has yielded inconclusive results, leading researchers to consider including not only demographic variables but also deeper attributes to improve our understanding of the relationships between top management team (TMT) characteristics, strategic decision-making and firm performance (Abatecola and Cristofaro, 2016; Li, 2018).
To address this gap in the literature, recent studies of TMT characteristics have been based on the strategic human capital (SHC) literature as a complementary approach to analysing their strategic competence (McDonald et al., 2008; Khanna et al., 2013; Datta and Iskandar-Datta, 2014). The central arguments of these studies have primarily concerned the contribution of top managers, as core employees, to organizational performance. Generally, most human capital research has proposed the “more is better” approach, suggesting that higher levels of knowledge and abilities and skills are always preferable. Nevertheless, this focus entails some limitations, attributable to the effects of having too much human capital (Kor and Sundaramurthy, 2009; Khanna et al., 2013, p. 558).
To explore this, our study proposes to examine TMT human capital as a combination of human capital attributes from which a range of profiles may be constructed. Although the “profile approach” does not intend to identify a particular form of human capital for optimum performance, it demonstrates a combination of characteristics and proposes a taxonomy of SHC profiles for TMTs. This integrative approach complicates attempts to identify human capital attributes in TMTs.
For this purpose, we consider the importance of the capabilities and roles of functional TMT members in TMT dynamics (Menz, 2012). Hence, unlike most TMT studies, which ask chief executive officers (CEOs) and senior team members about their own attributes, we consider that senior human resources (HR) managers have the greatest expertise in assessing organizational human capital (Cohen, 2015). In this way, we respond to another call from the TMT literature to include other core executives in addition to officers, such as...