TMT Human Capital and Industry Dynamism in The Adoption of Digital Transformation: Evidence from the S&P 500

Tushar Shah, George Benson, Sridhar Nerur and Mahmut Yasar
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Tushar Shah: Texas Woman's University, Texas, U.S.A.
George Benson: University of Texas at Arlington, Texas, U.S.A.
Sridhar Nerur: University of Texas at Arlington, Texas, U.S.A.
Mahmut Yasar: University of Texas at Arlington, Texas, U.S.A.

American Business Review, 2026, vol. 29, issue 1, 203-234

Abstract: This study investigates the determinants of digital transformation (DT) in S&P 500 firms, examining how the human capital breadth and depth of top management teams (TMTs) influence strategic change. Drawing primarily on Upper Echelons Theory (UET), we theorize that a team’s collective resource portfolio serves as a critical antecedent to digital adoption. Our results demonstrate that TMT role heterogeneity (breadth) exhibits a consistent, linear positive influence on DT. In contrast, TMT tenure (depth) follows a non-monotonic, cubic life cycle. We identify three distinct phases: an “initial liability of newness” (coordination-driven trough), a mid-term “adeptness step” (absorptive capacity-driven peak), and a final “strategic persistence” (fossilization-driven decline). Crucially, these patterns are moderated by environmental dynamism; the cubic tenure-DT relationship is uniquely pronounced in high-dynamism industries, peaking at approximately 17 years, while remaining latent in stable environments. By introducing a validated, text-based measure of digital transformation and migrating the breadth-and-depth framework from board governance to the executive suite, this research provides a nuanced understanding of the cognitive and structural drivers of radical strategic change. We conclude with implications for board-level succession and the strategic design of management teams.

Keywords: Top Management Teams; Digital Transformation; Strategic Change; Human Capital (search for similar items in EconPapers)
JEL-codes: J24 L00 (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:ris:ambsrv:022664

DOI: 10.37625/abr.29.1.203-234

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