International locations and top management teams: The influence of team-level contextual conditions

Abstract

An extensive body of research in international business (IB) theoretically and empirically examines factors that determine international location decisions of multinational companies (MNCs). However, not much attention has been paid to the heterogeneity in these decisions across firms. In this paper, we ask: why do some firms make more novel location choices vis-à-vis others? We seek to answer this question by exploring the role of top management team's (TMT) task-related experiences and characteristics in shaping these strategic choices. Combining insights from upper echelons (UE) and faultlines models, we develop a framework to explore how TMT level task-related faultlines impact the novelty of international location decisions of MNCs. Moreover, we also examine how shared experiences and power dynamics across subgroups influence the relationship between faultline strength and novelty of locations. In doing so, we identify contextual conditions under which TMT level characteristics are especially important for novelty of location choices. Implications for UE, faultlines and location choice theories are discussed.