The Impact of Top Management Team Diversity on Corporate Decision Making and Performance

Abstract

This paper examines the impact of diversity in top management teams on corporate decision-making and performance, analysing the role of diversity on information processing capacity, decision-making efficiency, financial performance and innovation capacity. It is found that diverse management teams can enhance the quality of decision-making and innovation by providing diverse perspectives and experiences. However, team diversity may also raise issues such as communication barriers and culture clashes, which may have a negative impact on the decision-making process and teamwork. Through case studies, this paper explores the successful experiences of Google and IBM in diversity management and proposes strategies to address the challenges, such as building an inclusive culture, optimising communication mechanisms and adjusting assessment systems. Meanwhile, this paper also discusses the relationship between diversity and CSR, pointing out that diversity helps companies fulfil their social responsibility and enhance their social image. Finally, this paper proposes future research directions, including the impact of diversity on long-term decision-making, diversity research in different cultural contexts and the relationship between diversity and CSR. Overall, although diversity management faces challenges, the potential for innovation and performance enhancement it brings makes it a key factor in corporate strategy.