Vol. 1 No. 01 (2025)
Articles

Incentives and Leadership Structures: Shaping International Expansion Through Exploration and Exploitation Strategies.

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  • Fang-Yi Lo,
  • Wei-Ting Chen,
  • Kun -Huang Huarng
Fang-Yi Lo
Department of Management Science National Yang Ming Chiao Tung University No. 1001, Daxue Rd. East Dist., Hsinchu City 300093, Taiwan.
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Wei-Ting Chen
Department of International Business, Feng Chia University, Taiwan. 100 Wenhua Road, Seatwen, Taichung, Taiwan.
Bio
Kun -Huang Huarng
National Taipei University of Business No. 321, Sec. 1, Jinan Rd., Zhongzheng District, Taipei City 100, Taiwan (R.O.C.).
Bio
Incentives and Leadership Structures: Shaping International Expansion Through Exploration and Exploitation Strategies

Published 2025-09-11

Keywords

  • Top Management Team (TMT),
  • Chief Executive Officer (CEO),
  • Compensation,
  • International Expansion Strategies,
  • Upper Echelons Theory
Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

How to Cite

Incentives and Leadership Structures: Shaping International Expansion Through Exploration and Exploitation Strategies. (2025). JOINETECH (International Journal of Economic and Technological Studies), 1(01), 11-27. https://doi.org/10.65479/joinetech.15

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Abstract

The international expansion strategies of Multinational Enterprises (MNEs), whether exploration or exploitation, remain a longstanding debate. Based on Upper Echelons Theory, this study investigates how the structure and characteristics of a firm’s executives, including the Top Management Team (TMT) and CEO, influence strategic choices. Additionally, executive compensation is considered an incentive mechanism. This research examines the effects of TMT’s long-term and short-term compensation on firms’ international strategy selection. While most prior studies link TMT compensation or diversity to firm performance, this study focuses on their relationship with international strategy choices. Data from 745 Taiwan- based MNEs in the technology and communication industries, encompassing 10,688 TMT members, were extracted from the Taiwan Economic Journal (TEJ) database for 2021 and 2022. The results reveal that TMT short-term compensation positively correlates with firms’ exploitation strategies, while long-term compensation correlates with exploration strategies. Moreover, CEO power negatively moderates these relationships, whereas TMT diversity and executives’ experience partially enhance them. This study contributes to understanding the role of incentives and leadership structures in shaping international expansion strategies.
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