Technology in Society 64 (2021) 101499

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Technology in Society
journal homepage: http://www.elsevier.com/locate/techsoc

Top management Team’s cognitive diversity and the Firm’s ambidextrous

innovation capability: The mediating role of ambivalent interpretation
Bhawini Kanchanabha, Yuosre F. Badir *
School of Management, Asian Institute of Technology, Pathumthani, 12120, Thailand

A R T I C L E I N F O A B S T R A C T

Keywords: The top management team (TMT) diversity has received considerable attention in literature, especially due to its
Top management team influence on an organization’s innovation strategy. While previous studies have considered diversity in terms of
Cognitive diversity education, experience, skills, functionality, and gender, little is known about the TMT’s cognitive diversity. We
Ambivalent interpretation
contribute to the literature by examining the influence of the TMT’s cognitive diversity on an organization’s
Ambidextrous innovation capability
ambidextrous innovation capability; i.e., its incremental and radical innovation capability. Results from 50 TMTs
involved in the electronics industry support our hypothesized mediating role of ambivalent interpretation; that
the TMT cogitative diversity positively influences ambivalent interpretation, and this, in turn, positively in­
fluences both radical and incremental innovation capability. These findings have important implications for how
a firm’s decision makers (i.e., the TMT) with their diverse cognitive styles support building the firm’s ambi­
dextrous capability through ambivalent interpretation.

1. Introduction the top management team’s (TMT) characteristics [1,11,12]. In partic­

Innovation capability is an organization’s ability to generate and
implement new ideas, processes, products, or services [1], and this is
considered one of the key resources that drives an organization’s
competitiveness [2], success in the market place [1], overall perfor­
mance [3], and future survival [4]. Organizational innovation scholars
[2,5] suggest that rather than focusing only on developing innovation,
organizations seeking to be innovative should adopt a capability
perspective concerning innovation that facilitates innovativeness within
the organization.
Innovation capability can be classified into two types; incremental
innovation capability and radical innovation capability [3,6,7]. There is
a consensus among researchers regarding the need for organizations to
manage their ambidextrous innovation capability; i.e., the appropriate
mix of radical and incremental capability in order to survive in the
long-term [8–10]. They noted that these two capabilities vary in the
kinds of resources they draw upon [7], and admit that maintaining a
balance between the development of future opportunities and running
efficient current operations is a challenge for many organizations [2].
Due to its importance, scholars have focused more on the anteced­
ents, and suggest that creating and enhancing an organization’s inno­
vation capability is a strategic issue, which is likely to be influenced by
ular, TMT diversity has received considerable attention in innovation
strategy literature [13–15], due to two possible reasons. Firstly, di­
versity is among the resources that are within the control of the TMT
which has the flexibility and discretion to encourage or discourage it
[13]. Secondly, workplaces are becoming increasingly diverse [16].
Therefore, it is imperative to understand how diversity within the TMT
can affect innovation capability.
Reviewing the literature on the innovation performance impact of
the TMT diversity reveals two research gaps. Firstly, prior studies have
examined the effects of TMT diversity on broadly defined innovation
outcomes (e.g., patents, new product development, process innovation)
[17]. The influence of TMT diversity on a firm’s innovation capability
has not been examined yet. Scholars [1] postulate that failing to
consider innovation capability as an outcome seems a pattern in the
literature concerning TMT diversity, and they have concluded that the
underlying mechanism behind how the TMT may contribute to the
development of a firm’s innovation capability is still not clear.
Secondly, research into TMT diversity has considered diversity in
terms of education, experience, skills, function, and gender [17,18]. To
date, according to the authors’ knowledge, there has been no study
examining the influence of the TMT’s diversity in terms of cognitive
ability [19,20] – defined as the extent to which the team’s members

* Corresponding author.
E-mail addresses: st118734@ait.asia (B. Kanchanabha), badir@ait.asia (Y.F. Badir).

https://doi.org/10.1016/j.techsoc.2020.101499
Received 16 April 2020; Received in revised form 2 October 2020; Accepted 23 December 2020
Available online 6 January 2021
0160-791X/© 2020 Elsevier Ltd. All rights reserved.
B. Kanchanabha and Y.F. Badir
reflect individual differences in knowledge, including their beliefs,
ideas, viewpoints, opinions, assumptions, preferences and perspectives
[21] – on the firm’s ambidextrous innovation capability. Scholars
contribute that the lack of such studies is due to the difficulty of
measuring the concept of cognitive ability [22].
The lack of research examining how the TMT’s cognitive diversity
may influence ambidextrous innovation capability is surprising, given
its strategic importance to the organization’s performance, and the
significant impact of cognitive diversity on knowledge [22] and
creativity-related tasks [20], such as innovation. Indeed, a systematic
literature review by Nielsen [19] concludes that it is important to focus
on the cognitive diversity of the TMT, instead of relying on diversity in
the demographic characteristics when studying strategic issues (i.e.,
innovation capability), a finding later supported by Wei and Wu [20].
Furthermore, there is a congruent view that organizations need to pur­
sue exploration (radical) and exploitation (incremental) innovation ac­
tivities simultaneously in order to achieve optimal performance [8,
23–26]. Besides, understanding the relationship between the TMT
cognitive diversity and a firm’s ambidextrous innovation capability will
not only help firms to be more innovative and grow, but also help them
to contribute to society’s economic growth. As stated by Ahlstrom [27];
innovative, growing firms bring new technological products and ser­
vices to the market, and generate economic growth and employment,
which in turn, greatly improves people’s quality of life.
Thus, due to its importance and to fill these two research gaps, the
objective of this article is to extend the understanding of how the TMT
cognitive diversity influences an organization’s ambidextrous innova­
tion capability. Due to the complex process underlying the influence of
the TMT’s diversity, several studies examining the direct relationship
between such diversity and a firm’s performance have produced
inconsistent results [22]. Consequently, scholars have suggested that
further exploration into this relationship is required, and recommend
going beyond any direct relationship [15,20].
The literature concerning the TMT’s information-processing
perspective mentions the phenomenon of ambivalent interpretation,
which refers to the decision-makers seeing an issue affecting their or­
ganization as simultaneously positive and negative [28,29]. Ambivalent
interpretation triggers an increased level of sensitivity to associations,
which is an important aspect of creativity [30] preventing over­
simplification [30–32] and encouraging a wider participation in prob­
lem solving [30,33]. Previous studies highlight the important role the
CEO’s ambivalent interpretation plays in shaping an organization’s
strategic direction [29], such as selecting and developing the required
innovation capability. Therefore, building on the
information-processing perspective, we argue that the TMT’s cognitive
diversity influences ambidextrous innovation capability through
ambivalent interpretation; i.e., the TMT’s cognitive diversity influences
the TMT’s ambivalent interpretation, and this in turn, shapes the two
types of innovation capability.
We contribute to the TMT literature in several ways. Firstly, we
contribute to the literature concerning the TMT diversity literature by
explaining the mechanism through which the TMT cognitive diversity
influences innovation capability. We show how the diverse cognitive
styles of the firm’s decision-makers may improve gathering, interpret­
ing, and synthesizing the necessary information, labeling it as both
positive and negative, thus enabling consideration of thoughtful alter­
natives, leading to develop a better innovation capability. Secondly, we
contribute to the literature on ambidextrous innovation management by
suggesting an antecedent; i.e., ambivalent interpretation, which enables
organizations to pursue both radical and incremental contradictory in­
novations simultaneously. Thirdly, we contribute to the information
processing perspective by explaining how ambivalent interpretation
shapes the information processing structure at the TMT level; thus,
complementing previous research at the individual level.
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Technology in Society 64 (2021) 101499
2. Theoretical background and hypotheses’ development
Prior research suggests that the TMT’s cognitive diversity may in­
fluence performance through information related perspectives. For
instance, Wei and Wu [20] argue that elaboration of task-related in­
formation mediates the relationship between a team’s cognitive di­
versity and its performance. Similarly [22], suggest that three
dimensions of information alertness (accumulation, transformation, and
selection) mediate the relationship between the TMT’s cognitive di­
versity and its performance. However, this article argues that how the
TMT interprets the information is equally as important. Therefore,
drawing on the information processing perspective, this study develops
a model with ambivalent interpretation as the mechanism (mediator)
through which the TMT’s cognitive diversity influences the organiza­
tion’s ambidextrous innovation capability. The article’s model is pre­
sented in Fig. 1.
2.1. TMT’s cognitive diversity
Cognitive diversity is defined as the difference in the beliefs, thinking
styles, knowledge, values, assumptions, and preferences held by the
team’s members [22]. For the upper-echelon executives, cognitive di­
versity is their variation in beliefs concerning the cause–effect rela­
tionship, and the variation in preferences concerning the organization’s
various strategic goals [21]. These differences and variations are critical
concerns because of their potential impact on the organization’s per­
formance [34].
Prior research shows that cognitive diversity influences both team
and organizational performance. Cognitive diversity has been shown to
positively affect team performance [35], especially in the early stages of
strategic planning activity [36]. Others [22] suggest that cognitively
diverse teams have more task-related knowledge, and that these teams
can achieve a better performance. Miller et al. [21] argued that higher
levels of cognitive diversity within the team lead to a more positive
organizational outcome. Likewise, team processes, such as the team
interdependence and cohesion, appear to moderate the relationship
between the TMT’s cognitive diversity and its performance, and this
relationship is mediated by elaboration of the task-related information
[20].
Cognitive diversity is appealing in the context of strategic decision-
making, because strategic decisions are complex, vague, non-routine,
and usually surrounded with uncertainty. Diversity may generate mul­
tiple perspectives, engender well thought-out alternatives, and ulti­
mately lead to better decisions [16]. TMTs with a higher cognitive
diversity are shown to have more disagreements when faced with
complex and non-routine problem-solving situations [37], such as in the
case of the strategic decision-making process. This disagreement in­
creases the motivation to debate and challenge the status quo [38],
which in turn, produces a greater variance in decision-making alterna­
tives, since it stimulates creative thinking and divergent thought [15].
Similarly, Olson et al. [16] found that a team’s cognitive diversity has a
strong positive relationship with task conflict, and that task conflict
Fig. 1. The conceptual model of the study.
B. Kanchanabha and Y.F. Badir
mediates the effect of cognitive diversity on the outcome of strategic
decisions; e.g. quality. Task conflict may also stimulate creative thinking
and the divergent thought process, thereby fostering team decisions
which outrange the decisions by independent individuals [39].
Scholars have shown the influence of cognitive diversity on knowl­
edge sharing, and consequently on innovation. Innovation literature
highlights the role of knowledge sharing that drives new ideas and
creativity, which are important sources of innovation [40]. Individuals
exhibiting cognitive differences bring unique perspectives and offer
more knowledge and resources for resolving complex problems [41]. In
a highly diverse cognitive TMT, each member may benefit from the
exchange of knowledge, skills, experiences, opinions, and know-how,
which are likely to enhance innovation performance. Moreover, group
decision-making studies [42] suggest that the TMT’s cognitive diversity
may produce higher-quality innovative decisions through the critical
and investigative interaction process within which the members iden­
tify, extract, and synthesize their different perspectives. Wang, Kim, and
Lee [43] found that the relationship between team diversity and team
creativity is fully mediated by the team’s intrinsic motivation. However,
as suggested by Van der Vegt and Janssen [44]; cognitive diversity ap­
pears to be unrelated to an individual’s innovative behavior.
However, while previous research has examined the influence of
cognitive diversity on performance, decision-making, creativity and
innovation, our understanding of how the TMT’s cognitive diversity may
influence an organization’s innovation capability is limited. To fill the
void, this article draws on the information processing perspective to
investigate the relationship between the cognitive diversity of the TMT
and the ambidextrous innovation capability of the organization. We
argue that the TMT’s cognitive diversity promotes ambivalent inter­
pretation, and this in turn, facilitates development of both radical and
incremental innovation capability.
2.2. The information processing theory
The information processing theory suggests that organizations
benefit from aligning their informational support mechanism with the
information needs of the strategic decision-makers [21,45]. Turner and
Makhija [46] identify three components associated with information
processing: gathering, interpreting, and synthesizing such information.
Prior researchers used the information processing theory in two
different ways. Firstly, they used the theory to explain the information
process of organizations [45,47]. Organizations operating in the high
technology industry sector achieve a competitive advantage when the
leaders use the available information in new and different ways, ahead
of the competitors, with the acceptance of risk and resource commit­
ment [45]. Effective information processing occurs when the informa­
tion is gathered, interpreted and synthesized. The leaders’ strategic
orientation provides the necessary organizational mechanism to foster
information synthesis and its application towards productive competi­
tive ends.
Secondly, the theory is used to explain the information process of
individuals and teams [46,48–50]. When the team’s members process
information, they gather, share, and attend to the information, and then
jointly analyze and integrate it as a team in order to handle any
complexity [51]. Team information processing is known to be vital for
team creativity and innovation [52–55]. According to Huang et al. [50];
team-level knowledge sharing is a critical information-processing
mechanism that facilitates individual creativity by increasing each
team member’s mutual understanding, and gaining useful information
and insights from others. In the same line of thinking, Hoever et al. [53]
explain the information processing theory in groups, and view the team
as the information processor. The team’s information processing builds
on each member’s ability to contribute different informational aspects
and viewpoints to the discussion; thus enabling as a basis for the team’s
informational diversity.
The studies by De Dreu et al. [49]; Hoever et al. [53]; Huang et al.
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Technology in Society 64 (2021) 101499
[50] have tried to uncover the mechanism about how creativity and
innovation are driven by information processing. However, they do not
provide enough explanation about the mechanism through which in­
formation processing by groups influences innovation capability, espe­
cially the incremental and radical innovation capability of an
organization. This study relies on the information processing literature
about teams and tries to explain how cognitive diversity by the team
affects the innovation capability of the organization. Furthermore, this
study emphasizes the interpretation stage of information processing and
recognizes the TMT as the key information processor.
2.3. TMT’s cognitive diversity and ambivalent interpretation
According to the information processing perspective, organizations
are information processing systems, and strategic decisions require in­
formation processing by the TMT. In this perspective, the TMT ex­
changes, processes, and interprets information from a range of sources,
and then acts on it before in order to make decisions [16]. This article
focuses on the interpretation of this information by the TMT, and its role
in the relationship between cognitive diversity and innovation
capability.
Scholars [56] postulate that interpretation is the act of carving out
meaning from ambiguous clues, and this is the very core of the
sense-making process. Ambivalence is the state in which positive and
negative associations are accessible simultaneously [57]. This may lead
to higher levels of reasoning concerning attitude-relevant information
[58]. Ambivalent interpretation refers to the coexistence of a positive
and negative evaluation of a particular object [58–60]. Kilduff, Angel­
mar, and Mehra [61] state that interpretative ambiguity most closely
resembles the state of equivocality, by which both agreement and
disagreement concerning the environment are possible simultaneously,
thus allowing the same reality to be perceived by the team’s members in
diverse but complementary ways. The senior management may perceive
threats and opportunities as co-existing in strategic issues, which will
influence information processing, decision-making, and the organiza­
tion’s actions [60].
As stated earlier, cognitive diversity has been shown to improve
strategic decisions and actions based on the generation of more
thoughtful alternatives, and the consideration of multiple perspectives,
as well as more creative solutions to strategic challenges [62]. This can
enhance the capacity of information processing by the team, as it is
associated with greater information usage. Therefore, the TMT should
have a greater variance of decision-making alternatives [39]. Liao and
Long [22] found that the level of cognitive diversity within the TMT
increases the managers’ ability to accumulate, transform, and select
information leading to potential business opportunities. However, we
argue that a highly diverse TMT in terms of cognitive ability will have a
different interpretation of the information collected. When receiving
information from the market for instance, a TMT with different beliefs,
thinking styles, knowledge, values, assumptions, and preferences should
be able to interpret this information from diverse angles and perspec­
tives, and also consider alternative scenarios, leading to the possible
coexistence of both a positive and negative evaluation. A cognitively
diversified TMT will be able to see not only the opportunity presented by
the market information, but also the threat that comes with it. There­
fore, the cognitive differences within the TMT will, therefore, increase
the level of ambivalent interpretation.
Hypothesis 1. Cognitive diversity within the top management team is
positively related to ambivalent interpretation.
2.4. Ambidextrous innovation capability
Recently, several organizations have started to adopt a capability
perspective concerning innovation in order to maintain continuous and
sustainable innovation [2]. Capabilities reflect an organization’s ability
B. Kanchanabha and Y.F. Badir
to deploy resources optimally and successfully, and they function as
transformational competencies that convert the distributed resources
into superior performance outcomes [63]. Accordingly, innovation
capability is defined as the organization, integration, and use of re­
sources from various business areas, ranging from marketing, research
and development, and manufacturing, to logistics and human resources
in order to generate innovation within the organization [64,65]. Prior
studies [2,5] show that the TMT’s members are critical for building
organizational innovation capability through their managerial roles and
positions. Therefore, it is important to understand how the TMT in­
fluences innovation capability.
Innovation capability is classified into two different dimensions; in­
cremental innovation capability and radical innovation capability [2,7,
63]. Incremental innovation capability refers to the competency of an
organization to deliver product and service innovation that departs
minimally from the existing routines, operations, and knowledge [63].
Radical innovation capability, on the other hand, is the ability to
generate innovation that significantly transforms the existing products
and services [7], which may involve breakthrough technology to pro­
duce discontinuous products and services [63].
Scholars [7–10] argue that in order to survive in the long-term, or­
ganizations need to manage an appropriate mix of radical and incre­
mental innovation. However, as stated by Borjesson et al. [2];
maintaining the balance between the development of future opportu­
nities and running efficient current operations is a challenge for many
organizations. In this article, we argue that the TMT’s cognitive diversity
may enhance the organization’s ambidextrous innovation capability
through ambivalent interpretation.
Prior research suggests that while in general the antecedents of in­
cremental and radical innovative capability are fundamentally different,
both however, may also have the same antecedent factors. For instance,
Subramaniam and Youndt [7] argue that both require drawing upon
knowledge in different ways. Incremental innovative capability requires
reinforcement of the prevailing knowledge, whereas radical innovative
capability requires transformation of the prevailing knowledge. Simi­
larly, Gatignon, Tushman, Smith, and Anderson [66] observe that in­
cremental innovation involves improving and exploiting an existing
technological trajectory, whereas radical innovation disrupts the exist­
ing technological trajectory. Also, an organization’s structural design as
the antecedent factor seems to be different. The organic organizational
structure design is likely to promote radical innovation capability,
whereas a mechanistic structure is more related to incremental inno­
vation capability [67]. Koberg, Detienne, and Heppard [68] examined
the environmental and organizational factors as the antecedents, and
found that the factors that favor incremental innovation include the age
and size of the firm, the age of the CEO, and the factors that favor radical
innovation include experimentation and transitioning from one project
to another. They also found that environmental dynamism and
intra-firm structural linkages are factors that favor both radical and in­
cremental innovation. In this article, we argue that a TMT with a high
level of cognitive diversity will positively influence the level of both
radical and incremental innovation capability through enhancing
ambivalent interpretation.
2.5. Ambivalent interpretation and ambidextrous innovation capability:
the mediating role
Due to the complexity and difficulty to pursue ambidexterity, orga­
nizations tend to focus on either radical or incremental innovation [69].
However, we argue that a higher level of ambivalent interpretation is
more likely to induce a highly cognitively diverse TMT to pursue
ambidextrous (i.e., both radical and incremental) innovation capability.
Because high quality information is the key factor underpinning
innovation capability [70], we propose that ambivalent interpretation
enhances the quality of the information processed by the TMT, because
it motivates the TMT to consider both opportunities and threats at the
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Technology in Society 64 (2021) 101499
same time; therefore reducing information asymmetry, which finally
leads to improvement of the organization’s innovation capability.
Earlier (i.e., in H1), we suggest that a higher cognitively diverse TMT is
more likely to lead to a higher level of ambivalent interpretation. We
build on the information-processing view to argue that a highly cogni­
tively diverse TMT can enhance the ambidexterity of innovation capa­
bility through the ability to produce and handle huge amounts of
information and decision alternatives, which are the result of a higher
level of ambivalent interpretation. Such higher ambivalent interpreta­
tion enables the TMT to evaluate both incremental and radical innova­
tion capability issues from different perspectives, simultaneously
consider both the positive and negative sides, and perceive the
co-existence of opportunities and threats, all of which may lead the TMT
to consider enhancing the capability of both radical and incremental
innovation.
A TMT with a higher ambivalent interpretation demands more in­
formation of higher quantity, quality and diversity, possibility from
different functions and units within the organization, thus reducing in­
formation asymmetry, and it combines and integrates this information
in innovative ways in order to engage in trade-off debates regarding
both types of innovation capability. A prior study [71] has shown that
high levels of information usage by the TMT’s members positively re­
lates to their interpretation of strategic issues in “win-win” terms.
Considering the well-documented benefits that an organization may
gain from both its incremental and radical innovation capability, such as
competitiveness [7] and short- and long-term survival [2], we argue that
a TMT with a higher level of ambivalent interpretation will be more
likely to consider enhancing both the radical and incremental innova­
tion capability in order to gain the full range of benefits.
Moreover, Plambeck and Weber [29] found that the simultaneous
occurrence of strong positive and strong negative evaluations resulting
from a higher level of ambivalent interpretation not only promotes
organizational action-taking per se, but also increases the “scope of ac­
tion”. Therefore, a higher level of ambivalent interpretation may lead
the TMT to increase the scope of their capability building, by consid­
ering enhancing both the radical and incremental innovation capability,
instead of only one aspect.
2.5.1. Ambivalent interpretation and incremental innovation capability
Incremental innovation is manifest as the adaptation, refinement,
enhancement, or line extension, incorporating new features that offer
additional benefits [72]. Incremental innovation has a lower techno­
logical and economic potential, but is characterized by a quicker payoff,
lower cash flow uncertainty [73], with a small and place limited strains
on a firm’s existing competencies [72]. Leifer, O’Connor, and Rice [74]
note that incremental innovation can enable large companies to remain
competitive in the short-term. Verhaal, Dobrev, and Bigelow [75] found
that organizations which adopt incremental innovation can enjoy indi­
rect survival benefits by way of higher growth. These organizations may
choose to resort some of their resources to incremental innovation in
order to maintain parity with the competitors’ innovation strategies
with a lower risk of failure.
Ambivalent interpretation enables the TMT to examine strategic is­
sues, such as innovation capability building, from both positive and
negative aspects, and assess the short- and long-term benefits and risks.
Thus, a high ambivalent interpretation by a highly cognitively diverse
TMT is likely to induce the team to reap the benefits from incremental
projects, which generally have shorter innovation cycles, in order to
enhance the firm’s short-term performance [73]. The sensing of op­
portunities and threats (ambivalent interpretation) and the ability to
readily adjust to changing external conditions through effective coor­
dination are the facilitators of incremental innovation capability [76].
The TMT will use this lower risk investment in incremental innovation
capability building as the means to face any possible failure in their
more high-risk investments in radical innovation capability building.
B. Kanchanabha and Y.F. Badir Technology in Society 64 (2021) 101499

Hypothesis 2. Ambivalent interpretation mediates the relationship members in the TMT, 56% were participating in the TMT for 1–5 years,
between the TMT’s cognitive diversity and incremental innovation 50.7% were 50–60 years old, and 58.7% held a bachelor’s degree.
capability
3.2. Measures
2.5.2. Ambivalent interpretation and radical innovation capability
When senior management works as a team, ambivalent interpreta­ 3.2.1. Top management team
tion enhances both the potential absorptive capacity and the realized An organization’s TMT consists of persons at the senior level of the
absorptive capacity of the TMT by motivating the TMT to consider both organization, including the CEO, Chairperson, CFO, COO, and other
opportunities and threats simultaneously. Sheng and Chien [77] found senior staffers [78]. The TMT’s members are considered to be the key
that the potential absorptive capacity and realized absorptive capacity decision-makers within the organization [79]. The TMT is responsible
have positive effects on radical innovation capability. Ambivalent for the strategic and critical decisions concerning the firm’s develop­
interpretation of strategic issues tends to trigger distant search, en­ ment, and the team’s composition favors a climate of cooperation,
hances the pursuit of novel actions and the effectiveness of information communication, generation of ideas, and creativity [80]. In the ques­
processing [60]. In addition, ambivalent assessment creates emotional tionnaire survey, we define the TMT as the group of senior managers
arousal, heightens alertness, and provides a sense of unusualness that in that generally make strategic decisions that are important to the firm’s
turn prompts a more creative and deliberate search for suitable re­ future [81]. Because of the difficulty in gaining access to the members of
sponses [29], all of which may lead to more radical innovation. each TMT, this research study only accessed three TMT members. Prior
Plambeck and Weber [29] found that the simultaneous occurrence of studies by Kilduff et al. [61]; Parayitam and Papenhausen [82]; Rahmi
strong positive and strong negative evaluations not only promotes Devi and Indarti [83] confirmed that a total of 150 TMT members is
organizational action-taking per se but also increases the scope of action, sufficient to study the dimension of cognitive diversity. Moreover, ac­
and the action taken under these conditions also appears to promote cording to Ref. [84], teams are defined as a distinguishable set of two or
greater risk-taking and novelty, which are important ingredients for more individuals who interact dynamically, adaptively, and interde­
radical innovation capability. Therefore, we propose the following. pendently, share common goals or purposes, and perform specific roles
or functions.
Hypothesis 3. Ambivalent interpretation mediates the relationship
between the TMT’s cognitive diversity and radical innovation
3.2.2. Cognitive diversity of the TMT
capability.
The cognitive diversity of the TMT was measured using the Cognitive
Style Index (CSI) [85]. The CSI is a self-report questionnaire designed to
3. Research design
assess the intuitive-analytical dimension of individuals and was
administrated to all the participants in the study. The questionnaire
3.1. Sample
consists of 38 items, with a true, uncertain, and false response mode,
with a score of 2 for true, 1 for uncertain, and 0 for false, assigned to
Detailed data was collected though the responses to the question­
each response. Cronbach’s alpha was 0.913. Due to the commitment to
naire submitted by the TMTs from 50 organizations involved in the
the author of the CSI, we cannot reveal more than three items in the
electronics industry. The electronics industry was selected because it is
questionnaire. Some of the items used to evaluate the cognitive diversity
dynamic, fast changing, and highly competitive; thus, it provides a
of the TMT were “I prefer chaotic action to orderly inaction”, and “In the
suitable context for the study of strategic managerial decisions regarding
meeting, I have more to say than most”. The standardized factor loading
innovation. An initial group of 239 firms involved in the electronics
ranged from 0.820 to 0.666 (KMO = 0.818., p = 0.000).
industry and located in the Bangkok region was identified using the Thai
Chamber of Commerce’s electronic data base of companies. After
3.2.3. Ambivalent interpretation
eliminating 65 firms for varies reasons (e.g., younger firms with less
Ambivalent interpretation was measured by following a prior study
than 5 years in business, maintenance service providers in which inno­
by Yuan et al. [60]; which asked the respondents to evaluate separately
vation capability is not a priority, or companies which are no longer in
the positive/opportunity and negative/threat interpretation of an eco­
operation), we contacted the respective Human Resource (HR) Man­
nomic situation by asking the question; “If there were a reduction in
agers of 174 firms by telephone, explained the study’s objectives, and
exports of Thailand caused by a reduction in the global trade volume,
requested participation by their organization in the research study. To
and a high unemployment rate and economic deflation in the United
ensure particpation in the study by as many members of the TMTs as
States, Europe, and Japan, how would you rate the effect of these factors
possible, we emphasized that the HR Manager should ask the CEO to
on your organization?” Then, we applied the following formula to
personally approve participation in the study.
calculate the overall ambivalence score:
We received a positive response from 50 firms. The target sample was
followed-up for eight months before the final data was collected from
Ambivalence = intensity - similarity;
the TMTs’ members. These 50 firms were not significantly different from
Intensity = (positive evaluation + negative evaluation)/2;
the 124 firms which did not qualify to participate in the study in terms of
Similarity = Abs (positive evaluation - negative evaluation)
the number of employees, net sales, or total assets.
(Abs refers to the absolute value).
We asked the CEO of each firm to identify the members of the TMT
having the most involvement and responsibility concerning strategic
The five items used to evaluate the positive and/or opportunity
decisions and information processing related to the firm’s products and
status were “Perceive the benefits that will come from the crisis”, “Feel
services. We used multi-channels for data collection. Firstly, we
that the future will be better because of the crisis”, “Label the crisis as a
requested interviews with the TMT’s members, and conducted a
potential benefit”, “See the crisis as having positive implications for the
questionnaire-based interview with each member who accepted our
future”, and “Label the crisis as something positive.” The four items used
interview request. Secondly, if the request for an interview was rejected,
to evaluate a negative and/or threat status were “Label the crisis as
the questionnaire was mailed or emailed to the relevant HR Manager
something negative”, “Feel that there is a high probability of losing a
with our request to direct the questionnaire to the respective TMT’s
great deal”. “Label the crisis as having a potential for loss”, “See the
members.
crisis as having negative implications for the future”. Cronbach’s alpha
We received positive responses from 50 firms (a response rate of
was 0.731. The standardized factor loading ranged from 0.778 to 0.938
28.7%), of which 68% of the respondents were male, 38.7% had 6 to 10
(KMO = 0.829, p = 0.000).

5
B. Kanchanabha and Y.F. Badir
3.2.4. Innovation capability
We followed Subramaniam and Youndt [7] who studied the effect of
intellectual capital on the types of innovation capability, namely in­
cremental innovation capability and radical innovation capability. In
order to evaluate innovation capability, the members of the TMT were
asked to evaluate their organization’s capability to generate incremental
and radical innovation in the products introduced during the last five
years. The items used to evaluate the incremental innovation capability
were “Innovations that reinforce your prevailing product/service lines”,
“Innovations that reinforce your existing expertise in the prevailing
products/services”, and “Innovations that reinforce how you compete
currently”. The items used to evaluate the radical innovation capability
were “Innovations that make existing products obsolete”, “Innovations
that fundamentally change existing products”, “Innovations that
significantly enhance the customer’s product experience”, and “In­
novations that require different ways of learning by the customer”. The
items were measured with a 5-point Likert scale (1 = strongly disagree,
to 5 = strongly agree). Cronbach’s alpha was 0.919. The standardized
factor loading ranged from 0.791 to 0.965 (KMO = 0.878, p = 0.000).
3.3. Validity and reliability
We used the AMOS software program for path analysis. First, we
conducted a pilot study with 30 samples, and implemented a confir­
matory factor analysis at the team-member level in order to examine the
factorial structure of our measurement of the cognitive diversity of the
TMT’s ambivalent interpretation, and the incremental innovation
capability and radical capability. We eliminated some items to ensure
that all the retained items significantly related to the underlying con­
structs and provided support for convergent validity. All the standard­
ized parameter loadings were significant (p < 0.01). All the items were
loaded significantly with factor loadings ranging from 0.666 to 0.965.
All the hypothesized constructs reflecting Cronbach’s alpha exceeded
0.70. We ran the AMOS program path analysis which revealed an
adequate fit for the hypothesized model (χ2 = 1.025, P-value = 0.311,
GFI = 0.978, RMSEA = 0.034).
To assess the discriminant validity of the measurements, this
research followed the study by Schneider, White, and Paul [86] and
Martins, Schilpzand, Kirkman, Ivanaj, and Ivanaj [87]. The appropri­
ateness of aggregating the individual responses to the team level was
ascertained based on analysis of the intra-class correlation or ICC(1) and
ICC(2) and the inter-rater agreement among the team members (rwg)
[86,87].
The intra-class correlations ICC(1) and ICC(2) are statistics
commonly used to justify the aggregation of data to higher levels of
analysis [86]. ICC(1) compares the variance between the units of anal­
ysis to the variance within the units of analysis using the individual
ratings of each respondent [86]. ICC(2) assesses the relative status be­
tween and within the variability using the average rating of the re­
spondents within each unit [86].
The ICC(1) value was 0.253, and the ICC(2) value 0.981 for the
cognitive diversity of the Top Management Team. These values are
above the recommended median for the ICC(1) value of 0.12 in the
organizational literature, and the cutoff at 0.60 for ICC(2) [86]. The
inter-rater agreement among team members and within the group
agreement value (rwg) was assessed to justify aggregation of the indi­
vidual level data [88]. The rwg value was 0.80 for the cognitive diversity
of the TMT. These values are above the conventionally acceptable rwg
value of 0.70 [88,89].
3.4. Common method variance
CFA is the method applied to detect and control common method
variance for this research study. Many researchers recommend the use of
CFA, which not only provides an estimation of the level of common
method variance affecting a study but also enables the way to control it
6
Technology in Society 64 (2021) 101499
[90–92].
A hypothesized model was examined in which all the indicators were
loaded on one factor, partly addressing common method variance con­
cerns regarding the measures used in the study. The result shows that a
single factor model does not fit well (CFI = 0.485, RMSEA = 0.151, P-
value = 0.000), which suggests that common method variance is not a
significant problem. If common method variance is responsible for
covariation among the measures, a confirmatory factor analysis should
indicate that a single factor fits the data [93,94].
4. Results
Fig. 2 reports the empirical results. The data indicates the best fit for
the model (χ2 = 1.025, P-value = 0.311, GFI = 0.978, RMSEA = 0.034).
Table 1 depicts descriptive statistics and correlations for all variables in
the default model, including the mean and standard deviation of
cognitive diversity (the mean 1.29; standard deviation 0.20), ambiva­
lent interpretation (the mean 5.59; standard deviation 1.09), radical
innovation capability (the mean 2.83; standard deviation 0.84), and
incremental innovation capability (the mean 2.78; standard deviation
1.09). Table 2 shows the regression weight of the default model. We find
there is support for hypotheses H1, H2, H3. The results indicate that
Hypothesis 1 is supported (H1 = 0.45, p 〈 0.05)., as the cognitive di­
versity of the TMT has a high positive influence on ambivalent inter­
pretation. Hypothesis 2 is supported (H2 = 0.59, p 〈 0.001), as the result
shows a high positive relationship between the ambivalent interpreta­
tion and incremental innovation capability. Hypothesis 3 is supported
(H3 = 0.58, p 〈 0.001), as the ambivalent interpretation of the TMT has a
high positive influence on the radical innovation capability.
Table 3 shows the standardized direct effect of the default model.
The standardized direct effect of cognitive diversity on the ambivalent
interpretation is 0.454. The standardized direct effect of ambivalent
interpretation on the incremental innovation capability and radical
innovation capability are 0.589 and 0.577 respectively.
Table 4 shows the standardized indirect effect of the default model.
The standardized indirect effect of cognitive diversity on the incre­
mental innovation capability is 0.267. The standardized indirect effect
of cognitive diversity on the radical innovation capability is 0.262.
Table 5 shows the multiple correlation of the default model. The R2
of the ambivalent interpretation is 0.21, the incremental innovation
capability is 0.35, and the radical innovation capability is 0.51. All the
values show that the model which starts with cognitive diversity ex­
plains the ambivalent interpretation of the TMT at 21%, incremental
innovation capability at 35%, and radical innovation capability at 51%.
Fig. 2. Path diagram of the fitted model.
B. Kanchanabha and Y.F. Badir Technology in Society 64 (2021) 101499

Table 1
Descriptive statistics and correlations.
Descriptive Statistics Correlations

Minimum Maximum Mean Std. Deviation 1 2 3 4

1 Cognitive diversity 0.42 1.65 1.29 0.20 1.00

2 Ambivalent interpretation 2.11 8.67 5.59 1.09 0.45 1.00
3 Radical innovation capability 1.00 5.00 2.83 0.84 0.60 0.73 1.00
4 Incremental innovation capability 1.00 5.00 2.78 1.09 0.27 0.59 0.75 1.00

**. Correlation is significant at the 0.01 level (2-tailed).

*. Correlation is significant at the 0.05 level (2-tailed).

management forms a team, it enables useful information and complex

Table 2
knowledge to be transmitted more fluently. Cognitive diversity seems to
Regression weights: (Group number 1 - Default model).
contribute positively to decision-making, because it can enhance a
Estimate S.E. C.R. P Label broader consideration of alternatives [62]. The TMT members’ elabo­
ambi < — cognitive 1.497 .627 2.387 .017 par_1 ration of their diverse perspectives and task-related information and
incre < — ambi .133 .039 3.416 *** par_2 knowledge eventually helps to enhance the effectiveness of their
radi < — ambi .174 .042 4.132 *** par_3 decision-making [20]. The cognitive base, values, and perceptions of the
executives are shaped by their experience, and it is argued enhance in­
formation processing [51]. Teams with higher levels of cognitive di­
Table 3 versity can use different perspectives to scan the environment and
Standardized direct effects (Group number 1 - default model). process information, and these teams may be expected to generate more
cognitive ambi creative ideas [43]. Cognitive inputs that the team members bring to the
ambi .454 .000
team can influence the activities of thinking, knowing, and processing
radi .000 .577 information, and are more likely to provide the essential building blocks
incre .000 .589 to process information that is directly applicable to the tasks that the
team encounters [48]. A wider perspective by the TMT will trigger team
discussions, information accumulation, information search, and the
Table 4 consideration of both threats and opportunities at the same time.
Standardized indirect effect (Group number 1 - default model). We found a significantly positive relationship between ambivalent
cognitive ambi
interpretation and the incremental innovation capability, and a signifi­
cantly positive relationship between ambivalent interpretation and the
ambi .000 .000
radical innovation capability. Team information processing is vital for
radi .262 .000
incre .267 .000 generating creativity [53]. According to De Dreu et al. [49] the indi­
vidual group members search and process information, and through
communication individual-level information processing becomes inte­
grated at the group-level, where it affects the other individuals in the
Table 5
group, gets distorted and ignored, or analyzed deliberately, and this
Squared multiple correlation: (Group number
1 - default model). cycling between the individual-level and group-level information pro­
cessing continues until a decision is reached, or some judgment is
Estimate
rendered. Ambivalent interpretation enables the TMT to evaluate both
cognitive .000 threats and opportunities simultaneously, which enhances the infor­
ambi .206
mation processing ability of the TMT, because it reduces information
radi .511
incre .347 asymmetry in the information process. Evaluating threats and oppor­
tunities at the same time promotes positive and negative feedback by the
members of the TMT. According to Hoever et al. [53]; negative feedback
5. Discussion fuels the team’s systematic effort and attention to external, novel fac­
tors, but conversely, positive feedback propels the members to use their
Our research was triggered by the observation that innovation information flexibly and contribute the resultant divergent insights to
literature largely lacks any investigation concerning the influence of the the team, which promotes the team’s creativity through information
cognitive diversity issue on the outcome of innovation capability. To elaboration. Increased access to knowledge provides new insights into
date, a large body of research about innovation management emphasizes complex problems, and allows for greater creativity in identifying so­
the effect of information search and the exploration on innovation lutions [46,96]. The less information is available with respect to
capability. However, research about cognitive diversity and information important components of the decision-making situation, the more
processing affecting innovation capability is still not sufficient. The difficult its resolution appears to the decision-makers [46]. Evaluating
empirical results of the research support the notion that cognitive di­ threats and opportunities at the same time strengthens the analytical
versity within the TMT has a direct effect on ambivalent interpretation capability of the team. Mikalef et al. [76] confirm that big data
by the TMT, but an indirect effect on innovation capability. This result is analytical capability enables organizations to generate insights that can
in line with [95] who emphasizes the importance of the TMT’s charac­ help strengthen both the incremental and the radical innovation
teristics as antecedents for innovation strategy and the outcome of capability.
innovation. We found a significantly positive relationship between ambivalent
We found that the level of cognitive diversity within the TMT has a interpretation and the level of incremental innovation capability, and a
direct effect on ambivalent interpretation. The results also show a sig­ significantly positive relationship between ambivalent interpretation
nificant relationship between the cognitive diversity of the TMT and its and the level of radical innovation capability. Ambivalent interpretation
ambivalent interpretation. This is due to the fact that when the senior by the TMT enables the team to perceive both threats and opportunities

7
B. Kanchanabha and Y.F. Badir
at the same time, which enables organizations to perceive market
dynamism that brings about opportunities that they can enjoy in order to
develop their radical innovation capability. Development of the
perception of obligation by the team members with the organization
may activate strong team goals, making the individuals more likely to
contribute to a higher level of endeavor to achieve superior rewards
[97]. De Dreu et al. [49] found group creativity and innovation is higher
when the group members disseminate information and process infor­
mation systematically, and when they appear to focus their information
processing on critical internal efficiency information, and prospectors
appear to value information of all types. Being prospectors in the in­
dustry, ambivalent interpretation by the TMT helps it form a wider view
of a particular strategic content when processing the information; thus,
facilitating the organization’s radical innovation capability.
However, organizations that operate business in rapidly evolving,
uncertain environments and competitive businesses, such as the elec­
tronics industry, might find that they could benefit more from being
ambidextrous. The ability of managers to embrace the contradictions
between exploration and exploitation enables organizations to respond
more easily and effectively to any changes in the external environment
[98]. Therefore, organizations might pursue both radical innovation and
incremental innovation at the same time. Organizations rarely aim
exclusively for radical innovation, instead, they try to be ambidextrous
to reach their exploratory and exploitative goals at the same time [99].
Organizations can handle the contradictory requirements of exploitation
and exploration by adapting periodically in response to the environ­
mental shifts, and by radically amending and realigning their basic
structures, strategies, and processes [100]. These strategies may enable
organizations to survive and be more competitive in the fast-evolving
electronics industry. Organizations might pursue innovation explora­
tion and exploitation strategies at the same time. Therefore, an incre­
mental ambivalent interpretation can enhance both the incremental
innovation capability and the radical innovation capability.
5.1. Theory implications
Our findings make three contributions to the literature. Firstly, our
study significantly enhances the TMT literature on diversity by
explaining the mechanism through which the TMT’s cognitive diversity
influences developing the firm’s innovation capability. Previous studies
have successfully examined the influence of cognitive style and diversity
on learning and innovation performance. For instance, Visser and Faems
[101] studied the impact of the CEO’s cognitive style on incremental and
radical innovation performance, while Aggarwal et al. [48] explain how
cognitive style diversity influences team learning. Other scholars [102]
have explored the role of debate on innovation. Similarly, Chen, Liu,
Zhang, and Kwan [103] explored the positive and negative effects of
cognitive diversity on creativity and innovation. However, while these
studies have improved our understanding of the effects of cognitive di­
versity on organizations, team learning, and innovation performance,
what is still lacking is how this effect takes place. Our results explain
how the TMT members’ diverse cognitive styles positively influence the
team ambivalent interpretation and, this, in turn, improves the firm’s
innovation capability.
Secondly, we contribute to the literature on ambidextrous innova­
tion management [101,104,105] by proposing an antecedent which may
help organizations to simultaneously pursue contradictory innovation
capability. Scholars [105] found that the TMT’s composition positively
influences the organization’s ambidextrous innovation. Others [101]
examined the indirect relationship between the CEO’s cognitive style
and the firm’s ambidextrous innovation performance. Gibson and Bir­
kinshaw [106] argue that a context characterized by a combination of
stretch, discipline, support, and trust facilitates ambidextrous innova­
tion. Our study extends prior research by highlighting the interactive
process of cognitive diversity and ambivalent interpretation as ante­
cedents for building incremental and radical innovation capability
8
Technology in Society 64 (2021) 101499
simultaneously.
Thirdly, we extend previous research on the influence of the infor­
mation processing perspective on the team’s creativity and innovation
[49,50,53] by introducing the role of ambivalent interpretation at the
TMT level; thus extending the previous research on individual managers
[107] and CEOs [29,60]. We also explain how this shapes the infor­
mation processing structure of the TMT, as well as its performance
impact on the firm’s capability development in terms of ambidextrous
innovation. Previously, Kaplan [108] found that the way individual
managers notice and interpret changes in their organizational context
greatly shapes the firm’s strategic decisions and actions. In the same
line, Plambeck and Weber [29] show that organizations whose CEOs
evaluate events as both positive and negative are more likely to take
action when both evaluations are also strongly held. The reported ac­
tions were also of greater scope, novelty, and risk. Others [60], have
examined how the CEO’s ambivalent interpretation of strategic issues
affects corporate entrepreneurship, and found no support for the main
effect of ambivalence. Our study shows that the individual TMT mem­
bers are the key players for the firm’s information processing, because of
their fundamental role in gathering, interpreting, and synthesizing the
necessary information for decision making. In addition, we extend the
literature on information processing at the group level that explains how
a TMT composed of diverse cognition can enhance the ambidextrous
innovation capability of the organization through improving the level of
ambivalent interpretation.
5.2. Managerial implications
The research findings of our study show that when the members of
the senior management with different cognitive styles gather as a team,
they bring diverse ideas and thoughts to the discussion table. Cognitive
diversity of the TMT can enhance ambivalent interpretation at the team
level. Ambivalent interpretation can enhance the TMT’s behavioral
integration owing to the more open and timely information exchange
among the team’s members. Information exchange among the team’s
members allows each individual team member to access valuable in­
formation, knowledge, and complementary skills. According to Li and
Yu [109]; improvement of the technological innovation capability is not
increased by the knowledge stock itself, but through the way of
knowledge accumulation. Through ambivalent interpretation, the TMT
can enhance knowledge about the organization’s environment. Empir­
ical research findings support the notion that in order for an organiza­
tion to be ambidextrous, there should be a mix of people within the TMT
who possess different cognitive characteristics. The mix of the members
in the TMT who possess different cognitive characteristics can result in
enhancement of the incremental innovation capability and radical
innovation capability of the organization through the incremental
ambivalent interpretation by the team.
By understanding the potential benefits of diversity and the mecha­
nism through which diversity influences capability building, managers
may embrace it and use it as a tool to build a more innovative organi­
zation. Since diversity is among the resources that are within the control
of an organization [13], managers should aim to build a team which is
not just diversified in terms of education, age, and gender, but also
diversified in terms of its cognitive ability.
Managers need to see the innovation performance impact of diversity
as a bigger picture, beyond the firm’s traditional growth pattern.
Consequently, workplaces are becoming increasingly diverse [16].
Success in improving the level of innovation capability results in
long-term success and growth of firms [110]. The resulting growth that
firms achieve through innovation is also crucial to society and its eco­
nomic growth. Indeed, previous research shows that economic growth is
an important mechanism in improving people’s well-being, particularly
over the longer-term [27].
B. Kanchanabha and Y.F. Badir
5.3. Limitations and future research
Like any research project, our study has limitations that suggest
empirical extensions. First, although our study is probably the first to
examine the mediating role of ambivalent interpretation at the TMT
level, our data was only collected from the electronics industry, which is
a fast moving and competitive industry [67]. Future research should
examine other industries which have a different industrial nature for
their innovation capability compared to the electronics industry. Sec­
ond, although we adopted a primary data source; i.e., the questionnaire
survey, our research design could only capture a snapshot. Since the
relationship between the TMT’s cognitive diversity and the team’
ambivalent interpretation is dynamic and evolving, a longitudinal
empirical design is necessary to fully understand this relationship.
Lastly, we only considered innovation capability as the outcome of the
TMT’s cognitive diversity through ambivalent interpretation. Future
reach should examine other types of capability, such as technological,
marketing, and operations.
6. Conclusion
Our study has investigated the impact of the TMT’s cognitive di­
versity on a firm’s ambidextrous innovation capability. Results from 50
TMTs in the electronics industry support our hypotheses that the TMT’s
cognitive diversity positively influences both radical as well as incre­
mental innovation capability through ambivalent interpretation; i.e.,
the TMT’s cogitative diversity enhances ambivalent interpretation, and
this, in turn, positively influences both the radical and incremental
innovation capability. Our study contributes to the literature by being
the first to conceptually suggest, and provide empirical evidence for, the
mediating role of ambivalent interpretation at the team level, and its
performance impact on a firm’s innovation capability.
Declaration of competing interest
None.
Appendix A. Supplementary data
Supplementary data to this article can be found online at https://doi.
org/10.1016/j.techsoc.2020.101499.
Author statement
Bhawini Kanchanabha: Conceptualization and Hypotheses Devel­
opment, Methodology, Formal analysis, Writing first draft. Yuosre F
Badir: Introduction, Discussion, Supervising the overall article devel­
opment, Conclusions, Article reviewing and editing.
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