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50
Effects of Social Capital and Power on Surviving Transformational Change: The Case of Initial Public Offerings
- Academy of Management Journal
"... We examined how social capital and the power of venture capitalists and founder-CEOs affect IPO firm survival. Using data from 218 U.S. initial public offerings conducted in 1992, we found that average management team tenure and an IPO deal’s network embeddedness decreased the likelihood of failure ..."
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Cited by 48 (3 self)
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We examined how social capital and the power of venture capitalists and founder-CEOs affect IPO firm survival. Using data from 218 U.S. initial public offerings conducted in 1992, we found that average management team tenure and an IPO deal’s network embeddedness decreased the likelihood of failure during a firm’s first five years as a public entity. Founder-CEO presence at the time of an IPO interacted with CEO ownership to decrease the likelihood of failure, and CEO ownership and venture capitalist ownership concentration also decreased that likelihood. Evolutionary perspectives on organizations are often accompanied by the presumption that organ-izations face an increased risk of failure early in their lives owing to liabilities of newness (Aldrich, 1999; Stinchcombe, 1965). As organizational goals and patterns of activity become routinized over time, increased reliability in performance and ac-countability for actions taken enhance a firm’s sur-
Experience-based human capital and social capital of outside directors
- Journal of Management
, 2009
"... In this article, the authors develop and test a theoretical model of the effects of outside direc-tors ’ human and social capital on firm growth. They posit that outside directors ’ board mem-berships and managerial experiences have additive and interactive effects. Using a longitudinal sample of hi ..."
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Cited by 23 (0 self)
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In this article, the authors develop and test a theoretical model of the effects of outside direc-tors ’ human and social capital on firm growth. They posit that outside directors ’ board mem-berships and managerial experiences have additive and interactive effects. Using a longitudinal sample of high technology firms, they test their theory and find that outside directors ’ member-ship on multiple boards, industry-specific managerial experience, and firm-specific founding experience have strong additive effects on firm growth. They also find negative interaction effects, indicating the costs of acquiring and combining certain types of outside director human and social capital within the board.
Can Directors Impact Performance? A case-based test of three theories of corporate governance
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Boards of Directors' Contribution to Strategy: A Literature Review and Research Agenda. Corporate Governance: An
- International Review
, 2009
"... Manuscript Type: Review Research Question/Issue: Over the last four decades, research on the relationship between boards of directors and strategy has proliferated. Yet to date there is little theoretical and empirical agreement regarding the question of how boards of directors contribute to strateg ..."
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Cited by 12 (1 self)
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Manuscript Type: Review Research Question/Issue: Over the last four decades, research on the relationship between boards of directors and strategy has proliferated. Yet to date there is little theoretical and empirical agreement regarding the question of how boards of directors contribute to strategy. This review assesses the extant literature by highlighting emerging trends and identifying several avenues for future research. Research Findings/Results: Using a content-analysis of 150 articles published in 23 management journals up to 2007, we describe and analyze how research on boards of directors and strategy has evolved over time. We illustrate how topics, theories, settings, and sources of data interact and influence insights about board–strategy relationships during three specific periods. Theoretical Implications: Our study illustrates that research on boards of directors and strategy evolved from normative and structural approaches to behavioral and cognitive approaches. Our results encourage future studies to examine the impact of institutional and context-specific factors on the (expected) contribution of boards to strategy, and to apply alternative methods to fully capture the impact of board processes and dynamics on strategy making. Practical Implications: The increasing interest in boards of directors ’ contribution to strategy echoes a movement towards more strategic involvement of boards of directors. However, best governance practices and the emphasis on board inde-pendence and control may hinder the board contribution to the strategic decision making. Our study invites investors and policy-makers to consider the requirements for an effective strategic task when they nominate board members and develop new regulations.
A Framework for Diagnosing Board Effectiveness
, 2004
"... Pressure on boards to improve corporate performance and management oversight has led to a series of inquiries and reports advocating governance reform. These reports largely reflect an agency perspective of governance and seek to ensure greater board independence from and control of management. Wh ..."
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Cited by 9 (0 self)
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Pressure on boards to improve corporate performance and management oversight has led to a series of inquiries and reports advocating governance reform. These reports largely reflect an agency perspective of governance and seek to ensure greater board independence from and control of management. While board independence is important to good governance, we contend that frameworks, models and advice centred on one element of governance ignore the complexity of how boards work. We develop a holistic board framework of how boards work based upon the concept of board intellectual capital to address this concern. Our framework proposes a series of inputs (company history, company constitution, legal environment) that lead to a particular mix of board intellectual capital. We contend that the balance of the elements of board intellectual capital will lead to a series of board behaviours. Further, the board needs to mobilize its intellectual capital to carry out a series of roles. The exact nature of these roles will depend on the
Can Directors Impact Performance? A Case Based Test . . . . Governance
, 2007
"... We examine hypothesised links between the board of directors and firm performance as predicted by the three predominant theories in corporate governance research, namely agency theory, stewardship theory and resource dependence theory. By employing a pattern matching analysis of seven cases, we are ..."
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Cited by 9 (0 self)
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We examine hypothesised links between the board of directors and firm performance as predicted by the three predominant theories in corporate governance research, namely agency theory, stewardship theory and resource dependence theory. By employing a pattern matching analysis of seven cases, we are able to examine the hypothesised link between board demography and firm performance expected under each theory. We find that while each theory can explain a particular case, no single theory explains the general pattern of results. We conclude by endorsing recent calls for a more process-orientated approach to both theory and empirical analysis, if we are to understand how boards add value.
A Framework for Comprehensive Strategic Analysis
- Proceedings of BUSITAL’08
"... This paper presents the basic framework for comprehensive strategic analysis. The basic purpose of strategic analysis is to help analyze how the firm can generate returns in excess of the firm’s opportunity costs (these are rents) by engaging in a more effective corporate strategy and, at the busine ..."
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Cited by 7 (0 self)
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This paper presents the basic framework for comprehensive strategic analysis. The basic purpose of strategic analysis is to help analyze how the firm can generate returns in excess of the firm’s opportunity costs (these are rents) by engaging in a more effective corporate strategy and, at the business level, more effective competitive strategy (Porter, 1996).
The role of interlocking director and board receptivity in the diffusion of practices.
- Academy of Management Review,
, 2010
"... Board interlocks are frequently examined as conduits of practices between firms. I propose that variance among the individual directors who create these linkages affects the likelihood information is transmitted across them. Further, I discuss organizational characteristics that shape how receptive ..."
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Cited by 6 (0 self)
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Board interlocks are frequently examined as conduits of practices between firms. I propose that variance among the individual directors who create these linkages affects the likelihood information is transmitted across them. Further, I discuss organizational characteristics that shape how receptive a board is to the diffusion of practices. I conceptualize a model to investigate, first, which directors are more likely to transmit experience or knowledge about organizational practices and, second, what factors influence how that information is received.
Board Composition beyond Independence: Social capital, human capital, and demographics
- Journal of Management
, 2013
"... Board composition is a critical element in the ability of the board to impact firm outcomes. While much of this research has focused on size and independence, there is growing literature that investigates the composition of directors ’ demography, human capital, and social capital. The purpose of th ..."
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Cited by 6 (1 self)
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Board composition is a critical element in the ability of the board to impact firm outcomes. While much of this research has focused on size and independence, there is growing literature that investigates the composition of directors ’ demography, human capital, and social capital. The purpose of this article is to synthesize this diverse literature. The authors first review the literature on board demographics, human capital, and social capital composition research. In doing so, they highlight the theoretical and methodological approaches utilized. Finally, they suggest avenues for future research that can advance our understanding of the effects of board composition.
Exceptional boards: Environmental experience and positive deviance from institutional norms
- Journal of Organizational Behavior
, 2012
"... Summary This paper explores the phenomenon of positive organizational deviance from institutional norms by establishing practices that protect or enhance the natural environment. Seeking to explain why some organizations practice positive environmental deviance while others do not, we locate our inq ..."
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Cited by 2 (1 self)
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Summary This paper explores the phenomenon of positive organizational deviance from institutional norms by establishing practices that protect or enhance the natural environment. Seeking to explain why some organizations practice positive environmental deviance while others do not, we locate our inquiry on the board of directors—the organizational body that interprets external issues and guides organizational response. We find a strong correlation between positive deviance and the past environmental experience of board directors and the centrality of the organization within field-level networks. Organizations located on the periphery of the network or whose boards possess a high level of environmental experience are more likely to deviate in positive ways. Our conclusions contribute to multiple literatures in behavioral and environmental governance, the role of filtering and enaction in the process of institutional conformity and change, and the mechanisms behind proactive
