The interplay between information decision-making theory and social categorization theory has long been recognized as crucial for unraveling the complex dynamics between top management team (TMT) diversity in characteristics and organizational outcomes. Despite their acknowledged importance, the challenge of synthesizing these divergent processes into a cohesive understanding remains. This study endeavors to bridge this gap by employing the categorization-elaboration model, aiming to dissect how interactions between TMT age and gender, as well as the interplay between TMT team tenure and independence, affect firms' approaches to human resource management, with a particular focus on flexible working arrangements.

Previous research has often applied information decision-making and social categorization theories in isolation. However, van Knippenberg et al. (2004) propose through the categorization-elaboration model that these theories interconnect, highlighting how social categorization-induced intergroup biases can hinder the elaboration of task-relevant information and perspectives. They differentiate between information/decision-making processes, which correlate with informational diversity, and social categorization processes, which relate to social category diversity.

The study also touches upon gender as a social category, referencing the work of (Guldiken et al., 2019), who argue that the appointment of the first female TMT member is often a tokenistic gesture under institutional pressures rather than a genuine effort to enhance thought diversity within the TMT. This notion aligns with the critical mass theory posited by Kanter (1977a; 1977b), which asserts the significance of minority proportions in influencing team dynamics. My investigation hence pays particular attention to the proportion of female TMT members and the degree of members’ independence.

Drawing on data from 1,115 firms listed in Japan over the 2015-2020 period, my analysis reveals nuanced influences of TMT diversity on HR system. Specifically, I find that gender diversity within the TMT enhances the beneficial effects of age diversity on the adoption of flexible working arrangements. Conversely, a higher degree of TMT independence tends to mitigate the adverse impacts of tenure diversity on flexible work options. These findings contribute valuable insights to the literature on team diversity, corporate human resource management, and upper echelons theory, suggesting that the selection of TMT members should consider not only individual characteristics but also the potential synergies and tensions arising from diversity in team composition. The implications of this research extend beyond academic discourse, offering practical guidance for organizations striving to optimize their strategic outcomes through informed TMT selection and diversity management.