Seeking common ground: the impact of TMT heterogeneity on enterprise digital transformation

Abstract This study integrates traditional Chinese “rites and music” culture into the upper echelons framework to examine the differential effects of top management team (TMT) physiological heterogeneity and task heterogeneity on enterprise digital transformation, as well as the boundary role of CEO power. Using panel data from Chinese listed firms spanning 2009 to 2023, we find that: (1) TMT physiological heterogeneity impedes digital transformation, while (2) TMT task heterogeneity facilitates it. (3) CEO power moderates these relationships by mitigating the negative effect of physiological heterogeneity and amplifying the positive effect of task heterogeneity. Notably, this moderating effect exhibits an inverted U-shaped pattern, suggesting that excessive CEO power may diminish its integrative benefits. (4) Heterogeneity analyses reveal that the negative impact of TMT physiological heterogeneity and the positive impact of TMT task heterogeneity are both more pronounced in regions with stronger Confucian cultural influence. (5) Furthermore, these main effects, as well as the moderating role of CEO power, are stronger in state-owned enterprises and peak during the maturity stage of the firm lifecycle. This study offers a culturally nuanced understanding of TMT decision-making and advances the literature on digital leadership and strategic management.