Verwaltungsräte und Unternehmensstrategie
Type
working paper
Date Issued
2019
Author(s)
Abstract
Research has produced inconclusive results about the effect of board industry expertise on the reallocation of strategic resources. We develop the notions of domestic and international industry expertise and theorize that they convey unique human and social capital that shape outside directors’ understanding of how strategic actions are linked to organizational outcomes. We test our predictions on a refined interpretation of the strategic change measure that captures distinct patterns in how boards orchestrate the redeployment of strategic resources both for organizational growth and decline scenarios. Based on a panel of large European firms, we find strong support that boards with more domestic industry expertise are associated with strategic resource reallocations that emphasize the primary need of change (“top-line focus”) while boards with more international expertise simultaneously reconfigure other resources to avoid losing strengths along with weaknesses (“bottom-line focus”). We also find that these distinct strategic preferences deteriorate as the co-working experience among outside directors and the CEO increases. Thus, our study offers a refined view of how board expertise shapes corporate strategy and reconciles previously inconsistent findings of prior studies.
Language
English
HSG Classification
contribution to scientific community
Subject(s)
Eprints ID
255627
File(s)![Thumbnail Image]()
open.access
Name
5 20180731 Alexandria_1.pdf
Size
449.34 KB
Format
Adobe PDF
Checksum (MD5)
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