CEO compensation, diversity in multinational enterprises, and innovation ambidexterity in the global pharmaceutical industry: an extended tournament incentive perspective

Cheah, J ORCID: https://orcid.org/0000-0003-2953-3815, Konwar, Z, Wei, Y and Han, J, 2025. CEO compensation, diversity in multinational enterprises, and innovation ambidexterity in the global pharmaceutical industry: an extended tournament incentive perspective. In: 11th Annual ICGS Conference: Transformative Corporate Governance, University of Manchester, 17-19 October 2025.

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Abstract

Extending insights from tournament theory to the international business domain, our study develops a theoretical model that formalizes how CEO compensation and international diversity influence innovation strategy in multinational enterprises (MNEs). Our premise centres on innovation ambidexterity, defined as the organization’s combined pursuit of Make (in-house R&D) and Buy (external technology acquisitions) strategies to develop its global innovation portfolio. We provide postulations on how long-term, performance-based CEO incentives will positively affect both the combined and balanced dimensions of ambidexterity. Additionally, we propose that the outlined relationships are contingent on diversity in the MNE network at two levels: organizational (i.e., cultural diversity across foreign subsidiaries) and managerial (i.e., diversity of top management teams). Utilizing panel data from a matched sample of 1,070 CEOs across 547 global high-technology pharmaceutical MNEs, our empirical analyses yield robust support for the hypothesized effects, with few nuanced variations. We derive theoretical and observable managerial implications for strategic leadership in MNEs, particularly in the context of global innovation strategy.

Item Type:	Conference contribution
Creators:	Cheah, J., Konwar, Z., Wei, Y. and Han, J.
Date:	October 2025
Identifiers:	Number Type 2551991 Other
Divisions:	Schools > Nottingham Business School
Record created by:	Laura Borcherds
Date Added:	23 Jan 2026 12:04
Last Modified:	23 Jan 2026 12:04
URI:	https://irep.ntu.ac.uk/id/eprint/55105

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