Influence of Top Management Team Characteristics on Sustainable Competitive Advantage of Chinese Multinational Corporations in Kenya

Abstract

The main purpose of this study was to determine the influence of external environmental and managerial discretion on the relationship between Top Management Team (TMT) characteristics and Sustainable Competitive Advantage (SCA) of Chinese Multinational Corporations (CMCs) in Kenya. The empirical studies conducted on TMT characteristics influence on SCA have produced mixed results some agreeing and others disagreeing, thus these empirical studies are inconclusive. On the same line, there is no agreement on the moderating influence of external environment on the relationship between TMT characteristics and SCA. The intervening influence of managerial discretion on the relationship between TMT characteristics and SCA is also not conclusive. Thus, there was a need to establish that existence of these association between and among these variables. The present study covered CMCs in Kenya and the broad objective of this study was establish the influence external environmental and managerial discretion on the relationship between TMT characteristics and SCA of CMCs in Kenya. From the broad objective, the study specifically had four objectives, which were to assess the influence of TMT characteristics on SCA; determine the influence of external environment on the connection between TMT and SCA; assess the influence of TMT characteristics and managerial discretion on SCA; and the joint influence of TMT characteristics, external environment, managerial discretion on SCA of CMCs in Kenya. A cross-sectional design was employed where data was gathered from 72 CMCs in Kenya using a semi-structured questionnaire. The respondents in the study were top managers in 72 CMCs operating in Kenya for more than three years. Two questionnaires were sent to each of the 72 CMCs adding up to a total of 144 questionnaires. Both descriptive and inferential statistics was employed to analyze the data and the formulated hypotheses were subjected to tests using Chi squares. The analysis of the findings revealed that TMT characteristics had a statistically significant influence on SCA of CMCs in Kenya. Similarly, on the moderating influence of external environment on the relationship between TMT characteristics on SCA and the intervening influence of managerial discretion on the relationship between TMT characteristics on SCA were found statistically significant. Further, the study revealed that when TMT characteristics, external environment and managerial discretion were combined all together, they statistically influence SCA of CMCs in Kenya. The findings of the study partially supported the agency, contingency, upper echelon and competitive advantage theories, respectively. This study gives to contributions in terms of knowledge to strategic management by influence of external environmental and managerial discretion on the relationship between TMT characteristics and SCA. The respective managers are to adopt the findings of the present study in ensuring that their firms embrace TMT characteristics to interpret the environment properly and formulate appropriate strategies for SCA and ensure that clear dimensions of managerial discretion are integrated in decision making process.