TMT entrepreneurial passion diversity and firm innovation performance: the mediating role of knowledge creation

Abstract

Purpose This study extends the literature on top management team (TMT) diversity and innovation by introducing entrepreneurial passion diversity as an important TMT affective component in determining firm innovation performance. This paper draws on the knowledge-based view and proposes that TMT passion diversity, in terms of intensity separation and focus variety, may hinder the process of knowledge creation, and, in turn, reduce firm innovation performance. Design/methodology/approach The authors conduct a questionnaire survey using a simple random sampling technique and collect data from 195 small- and medium-sized enterprises in China. Ordinary least squares regression and a structural equation model are applied to test the hypotheses. Findings This study finds that TMT passion intensity separation has a negative effect on firm innovation performance via knowledge exchange and knowledge combination. TMT passion focus variety has a negative effect on firm innovation performance via knowledge combination. Originality/value This study highlights the affective diversity of entrepreneurial passion in TMTs and clarifies the detrimental role of TMT entrepreneurial passion diversity in innovation and knowledge creation. It contributes new insights to the literature on TMT diversity, knowledge management and entrepreneurial passion.