Document Type

Article

Publication Date

2013

Publication Title

Long Range Planning

Keywords

Organizational Behavior, Strategic Management

Disciplines

Organizational Behavior and Theory

Abstract

Within the context of the monitoring and control function of the board, we extend previous work on the agency view of governance. We examine how the top managers' external ties and board composition directly and interactively influence the strategic choices of firms. Our results indicate that top managers with intra-industry knowledge and experience tend to adopt a resource-imitation strategy whereas those with knowledge and experience from other industries tend to adopt a resource-substitution strategy. The separation of CEO and board chairperson duties also affects strategy selection. In terms of interaction effects, we find that boards with a high ratio of outsiders reduce the tendencies of managers to opt for the safe strategy solutions with which they are familiar.

DOI

10.1016/j.lrp.2013.08.002

Version

Postprint

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