An upper echelons perspective of organizational capacity for change: an international study of initial public offerings

Organizational capacity for change (OCC) is a dynamic capability that captures an organization’s ability to anticipate and/or react to pressures to adapt. Prior research has shown that OCC tends to be positively associated with firm performance. However, knowledge on the antecedents of this important dynamic capability is still limited. The present paper analyzes the determinants of OCC from an upper echelons perspective. We argue the degree of nationality diversity of top management teams and boards. Our findings point to the importance of matching executive composition and compensation as we find evidence of executive compensation acting as moderator of the relationship between the growth of internationalization of top management teams and boards and firm performance.