Strategic agility in consumer goods manufacturers: the role of top management team functional background heterogeneity

Purpose The purpose of this paper is to examine how top management teams’ (TMTs) functional background heterogeneity shapes the development of strategic agility in consumer goods manufacturers. The critical linkage between TMT heterogeneity and the two dimensions of agility—market and operational—has been explored to clarify how managerial characteristics influence firms’ capacity to realign resources and sustain competitiveness in volatile environments. Design/methodology/approach A text-based Latent Dirichlet Allocation (LDA) approach is used to identify different forms of agility from the annual reports of 546 consumer goods manufacturers (4,228 firm-year observations). A two-way fixed effects model is then employed to test the hypotheses. Findings Results show that TMT functional background heterogeneity fosters market agility but hinders operational agility. Moreover, both liquidity buffers and market competition attenuate these effects. Originality/value This study advances understanding of the micro-foundations of strategic agility by integrating TMT heterogeneity with organizational agility outcomes. It offers theoretical insights into how managerial characteristics shape agility and provides practical guidance for consumer goods manufacturers in responding effectively to rapidly changing environments.