BOARD COMPOSITION FROM A STRATEGIC CONTINGENCY PERSPECTIVE

This study examined the association between corporations’environments, strategies, and past performance and the composition of their boards of directors as measured by size and outside director representation. The environment, strategy and past performance were viewed as posing a strategic contingency; each of these sets could determine the success or failure of the company. Data on 119 Fortune 500 industrial companies for the 1983-9 period were used. Canonical analysis showed that increased uncertainty of a firm's environment, use of external growth and diversification; reliance on leverage as a means of finance, and poor past financial performance were associated with large board size and increased outside representation in subsequent years. Most important, board composition was positively associated with future measurements of corporate financial performance.     

The relative power of ceos and boards of directors: Associations with corporate performance

A typology of the relative powers of the chief executive officer and the board of directors was derived based on the literature, highlighting four situations: Caretaker, Statutory, Proactive and Participative boards. Data collected from Fortune 500 Industrial and Fortune 500 Service corporations supported the typology. The results showed significant differences among the four board types in their characteristics, internal process, decision-making styles, board effectiveness, and contribution to company performance. Powerful boards were associated with superior corporate financial performance.     

Governance of the Entrepreneurial Threshold Firm: A Knowledge-based Perspective

ABSTRACT By building on a knowledge‐based view of the firm, this paper addresses a relatively unexplored area of roles and dynamics of corporate governance in younger, threshold firms that are undergoing a transition from the emergence to the professional management stage. Our analysis is focused on the process of capability development, exploring the effect of the asymmetry in knowledge that often exists between directors and senior managers on the governance of threshold firms. We examine the key sources of this asymmetry, explore ways directors and senior executives learn, and then discuss the implications of this learning on the evolution of governance systems in the threshold firm.     

Entrepreneurship and Dynamic Capabilities: A Review,Model and Research Agenda*

abstract The emergent literature on dynamic capabilities and their role in value creation is riddled with inconsistencies, overlapping definitions, and outright contradictions. Yet, the theoretical and practical importance of developing and applying dynamic capabilities to sustain a firm's competitive advantage in complex and volatile external environments has catapulted this issue to the forefront of the research agendas of many scholars. In this paper, we offer a definition of dynamic capabilities, separating them from substantive capabilities as well as from their antecedents and consequences. We also present a set of propositions that outline (1) how substantive capabilities and dynamic capabilities are related to one another, (2) how this relationship is moderated by organizational knowledge and skills, (3) how organizational age affects the speed of utilization of dynamic capabilities and the learning mode used in organizational change, and (4) how organizational knowledge and market dynamism affect the likely value of dynamic capabilities. Our discussion and model help to delineate key differences in the dynamic capabilities that new ventures and established companies have, revealing a key source of strategic heterogeneity between these firms.     

Contextualizing theory building in entrepreneurship research

Theory development and testing are central to the advancement of entrepreneurship as a scholarly field. For nearly three decades now, researchers have borrowed popular theories from other disciplines and adapted them to the study of diverse entrepreneurship phenomena. This has enhanced the rigor of research findings. Future studies can achieve greater rigor and relevance by paying more attention to the context of their investigations. Understanding the nature, dynamics, uniqueness and limitations of this context can enrich future studies. This article describes common problems revealed in recent entrepreneurship research when applying existing and new theories to well known vs. emerging and novel phenomena. The article also suggests strategies to enrich creative and constructive theory building.     

Corporate social responsibility and organizational effectiveness: A multivariate approach

In this paper, three major themes in research on corporate social responsibility (CSR) are identified. Of particular interest, however, is the potential link between CSR and organizational effectiveness (OE). Data collected from 410 college graduate and undergraduate students were used to examine this relationship. Using factor analysis, eight dimensions of CSR and three components of OE were extracted. Canonical analysis was then performed. The result supports the proposition that specific CSR practices affect select OE outcomes. In addition, the method employed here provides a parsimonious approach to give priority to social claims.Shaker A. Zahra, Ph.D., is Associate Professor of Strategic Management, George Mason University, Fairfax, VA 22030, U.S.A. His research centers on the role of board of directors in the strategic process, determinants of technological innovation in large corporations, and ethical issues associated with strategic choices. His research has received several awards.Michael S. LaTour, Ph.D., is Assistant Professor of Marketing, College of Business, Old Dominion University, Norfolk, Virginia 23508, USA. His research centers on the role of arousal in consumer behavior and ethical issues arising in this context.     

Executive values and the ethics of company politics: Some preliminary findings

A model of correlates of executives' views of organizational politics was presented. The model incorporated three sets of variables: executives' background, values and attitudes. Data collected from 302 managers were used to validate the model. The results showed that precursors of executive perceptions of the ethics and effect of company politics were different. Values were stronger than background variables in explaining executives' views of company politics.Dr. Shaker A. Zahra is Associate Professor of Strategic Management, George Mason University, Fairfax, Virginia 22030. His research centers on the role of boards of directors in the strategic process, determinants of innovation in large corporations, and ethical issues associated with strategic choices. His research received several awards.     

Business strategy,technology policy and firm performance

This paper presents a study of the relationships among select business strategy dimensions, technology policy dimensions, and firm performance. The research sought to identify how these variables interrelate at the bivariate and multivariate levels. Data were collected from 103 manufacturing-based firms representing 28 mature industries. Results show that technology policy choices vary widely across firms with different business strategies, and that business strategy affects the strength of the relationship between firm performance and particular technology policies.     

Understanding the Social Role of Entrepreneurship

There is a need to rethink and redefine the social value added of entrepreneurial activities to society. In this paper we develop five pillars on which the evolving social role of entrepreneurship can rest and have its impact: (1) connecting entrepreneurial activities to other societal efforts aimed at improving the quality of life, achieving progress, and enriching human existence, (2) identifying ways to reduce the dysfunctional effects of entrepreneurial activities on stakeholders, (3) redefining the scope of entrepreneurial activities as a scholarly arena, (4) recognizing entrepreneurship's social multiplier, and (5) pursuing blended value at the organizational level, centring on balancing the creation of financial, social and environmental wealth. In a final section we discuss implications for practices and for further research.     

The effect of governance modes and relatedness of external business development activities on innovative performance

This study examines how different governance modes for external business development activities and venture relatedness affect a firm's innovative performance. Building on research suggesting that interorganizational relationships enhance the innovative performance of firms, we propose that governance modes and venture relatedness interact in their effect on innovative performance. Analyzing a panel of the largest firms in four information and communication technology sectors, we find that degree of relatedness for corporate venture capital investments, alliances, joint ventures, and acquisitions influences their impact on innovative performance. Copyright © 2008 John Wiley & Sons, Ltd.