What Changes after Women Enter Top Management Teams? A Gender-Based Model of Strategic Renewal

The question of what changes when women enter upper-echelons teams has long frustrated upper echelons and gender researchers. We build on the dynamic strategic renewal literature, combine it with upper echelons theory insights, and integrate knowledge about female executives' career strategies to theorize how and when female appointments into top management teams (TMTs) cause firms to change their approach to knowledge-related strategic renewal. In doing so, we reconcile the tension among extant mediating processes invoked to explain how female TMT representation might affect strategic decisions: change orientation and risk-taking propensity. Estimating a dynamic ordinary least squares model on panel data from 163 multinationals, we find that following female (but not male) TMT appointments, TMT cognitions shift, becoming more change oriented and less risk seeking. Subsequently, these TMT cognitive shifts cause a decrease in mergers and acquisitions and an increase in research and development. Our model of female TMT appointments as catalysts that cause shifts in TMT cognitions, which, in turn, redirect knowledge-related strategic renewal from a buying to a building approach, is a novel effort at advancing research on women at upper echelons to examine time-dependent, within-firm mechanisms linking women in upper echelons and firm outcomes.