Rasma Pīpiķe, Elīna Gaile-Sarkane

Proceedings of the 28th World Multi-Conference on Systemics, Cybernetics and Informatics: WMSCI 2024, pp. 163-169 (2024); https://doi.org/10.54808/WMSCI2024.01.163

Rasma Pīpiķe
Faculty of Engineering Economics and Management, Riga Technical University, Riga, Latvia

Elīna Gaile-Sarkane
Faculty of Engineering Economics and Management, Riga Technical University, Riga, Latvia

Cite this paper as:
Pīpiķe, R., Gaile-Sarkane, E. (2024). Strategic Decisions in Firms Driven by Collective Work Experience from the Upper Echelons Theory Perspective. In N. Callaos, E. Gaile-Sarkane, N. Lace, B. Sánchez, M. Savoie (Eds.), Proceedings of the 28th World Multi-Conference on Systemics, Cybernetics and Informatics: WMSCI 2024, pp. 163-169. International Institute of Informatics and Cybernetics. https://doi.org/10.54808/WMSCI2024.01.163

This study examines more in-depth aspects of forming collective work experiences in top management teams (TMTs) and its impact on firm performance from an Upper Echelons Theory (UET) perspective, emphasizing diversity management strategies.
Using a mixed-methods approach, including ten in-depth interviews with business professionals in Latvia representing all spectrums of fields and a survey of 765 Latvian companies, the study highlights the significant impact of diverse work experience on decision-making processes, innovation, and financial outcomes.
The results show that most Latvian business professionals consider collective work experience essential for innovation and financial growth. Critical aspects of the TMT collective work experience, such as diverse professional backgrounds, continuous learning, effective teamwork, and human resource management professional involvement in the TMT, have been identified as improvements for strategic decision-making and organizational success.
The study highlights the need for tailored strategies in TMT composition to use diversity effectively. In addition, the authors aim to develop a mathematical model to optimize TMT effectiveness by fully exploiting the potential of diverse collective work experiences and providing insights into improving management structures and performance in different economic contexts. Therefore, this article is one step further in finding measurable criteria to search measurable criteria to establish the mathematical model for improved use of diversity management.