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THE INFLUENCE OF TOP MANAGEMENT TEAM COMPOSITION ON INDONESIAN MINING COMPANIES

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Top management team composition is a big issue in international business and management research,
limited academic literature investigate about this is in Indonesia, especially on mining company.
Most studies have been conduct in US and Europe. So the result for these studies reflecting diversity and cultural of the underlying US and Europe populationn

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THE INFLUENCE OF TOP MANAGEMENT TEAM COMPOSITION ON INDONESIAN MINING COMPANIES

  1. 1. 1st  WORKSHOP  ON  TOP  MANAGEMENT  TEAMS  &  BUSINESS  STRATEGY  RESEARCH:  RESPONSES  AND  ADAPTABILITY  IN  TURBULENT  TIMES  (Valencia,  March  22nd  and  23rd,  2010)  
  2. 2. ¡  Introduction  ¡  Research  Objective  ¡  Literature  Review  ¡  Research  Method  ¡  Conceptual  Model  ¡  Result  ¡  Conclusion  ¡  Limitations  
  3. 3. ¡  Top   management   team   composition   is   a   big   issue   in   international   business   and   management  research,    ¡  limited  academic  literature  investigate  about   this   is   in   Indonesia,   especially   on   mining   company.  ¡  Most   studies   have   been   conduct   in   US   and   Europe.   So   the   result   for   these   studies   reflecting   diversity   and   cultural   of   the   underlying  US  and  Europe  population.  
  4. 4. ¡  The   Indonesia   economy   system   is   based   on   agricultural   production   and   extraction   of   natural   resources,   especially   oil,   natural   gas,   coal,  timber,  and  fish.    ¡  Indonesia  business  system  today  is  very  much   a  reflection  of  the  legacy  of  former  president   Soeharto  (1966  –  1998)  
  5. 5. ¡  D o e s   t h e   c o m p o s i t i o n   o f   t h e   To p   Management   Team   affect   the   Indonesia   mining  companies  performance?  
  6. 6. AGE  At  demographic  level,  the  diversity  of  the  team  refers  to  variables  such  as  age  which   are  the  dominant  measure  of  difference  in  the  team.   Pegels  and  Yang  (2000:697),  Vroom  and  Pahl,  1971)   State  that  older  managers  tend  to  avoid  risk  while  the  young   one  tend  to  pursue  more  risky  and  innovative  growth  strategies  
  7. 7. Foreigner  • Lublin   (2005),   corporate   boards   of   MNCs   are  going  global,     • particularly  in  Europe  90%  contrast  in  US   only  35  %  •  Veen   and   Marsman   (2008)   nationality   diversity   is   an   important   requirement   for   quality   of   strategic   decision.   More   foreigner   in   TMTs   in   companies   has   a   better   performance   than   just   a   few   foreigner  
  8. 8. Gender  Glunk,  Heijltjes  and   Olie  (2001)  found  that   gender   distribution   to   be   highly  comparable   among   the   three  countries;   there   are   few   women  executives   in   the   30   companies   in  UK,  Denmark  and  The  Netherlands  
  9. 9. Educational  Level   Dahlin  et  al  (2005),   education  diversity  in   Herrmann  and  Datta,  TMT  affects  the  range   2005;  Hambrick  and  and  depth  of  the  use  of   Mason,  1984,   positive  information,   subsection  should  be  a   and  may  negatively   complementary  affect  the  combination   of  information.    
  10. 10. DEDUCTIVE  METHOD  18  MINING  COMPANIES  LISTED  BEI    174  EXECUTIVES  
  11. 11. AGE     FOREIGNER   -­‐0.76   0.120   ROA  GENDER   EDUCATION  LEVEL   0.042   -­‐0.234  
  12. 12. ¡  From   the  ANOVA   table,   the   significant   value   =   0.298>α,   it   can   be   concluded   that   the   independent   variables   simultaneously   does   not   affect   the   dependent   variables,   so  in  other  words  the  top  management  team  composition   does  not  affect  the  company  performance.  
  13. 13. AGE  –  ROA  0.300>α  FOREIGNER  –  ROA  0.435>α  GENDER  –  ROA  0.728>α  EDUCATIONAL  LEVEL  –  ROA  0.077>α  
  14. 14. ¡  The   conclusion   was   that   the   independent   variables   simultaneously   does   not   affect   the   dependent   variables,   so   top   management   team   composition   does  not  affect  the  company  performance.  Also  all   variables   including   age,   foreigner,   gender   and   the   level   of   education   of   the   top   management   team   have   no   influence   on   the   performance   of   Indonesia   mining  companies  
  15. 15. ¡  LIMITED  SAMPLE,  18  COMPANIES  ¡  LIMITED   VARIABLE   FOR   MEASURE   THE   COMPANY  PERFORMANCE  ¡  ONLY  ONE  YEAR  ANNUAL  REPORT  
  16. 16. THANK  YOU  FOR  YOUR  ATTENTION     Comment  and  Suggestion    

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