Institutional and Strategic Choice Perspectives on Board Involvement in the Strategic Decision Process
Academy of Management JournalPublished 1 October 1992
William Q. Judge, Carl P. Zeithaml
Citations128
SJR quartileQ1
SJR score10.53
SNIP3.95
Generate an AI Snapshot to get a quick, structured summary of this paper.
Study Snapshot
ObjectiveStudy objective
MethodsResearch methodology
PopulationPopulation studied
Sample sizeSample sizes
OutcomesStudy outcomes here
ResultsStudy results comes here
LimitationsResearch study limitations comes here
A concise AI-generated summary of the paper will appear here once you click Generate AI Snapshot.
TL;DR
Examination of the antecedents and effects of board involvement from both the institutional and strategic choice perspectives found board involvement to be positively related to financial performance after controlling for industry and size effects.
Abstract
The level of a board of director's involvement in strategic decisions can be viewed as an institutional response or as a strategic adaptation to external pressures for greater board involvement. We examined the antecedents and effects of board involvement from both the institutional and strategic choice perspectives. Data obtained from personal interviews with 114 board members and archival records indicated the board size, levels of diversification, and insider representation were negatively related to board involvement, and organizational age was positively related to it. Furthermore, we found board involvement to be positively related to financial performance, after controlling for industry and size effects. Overall, the results suggest that both theoretical perspectives are necessary for a comprehensive description of the strategic role of the board.
Keywords
Business, Management and Accounting
American Sociological ReviewThe Iron Cage Revisited: Institutional Isomorphism and Collective Rationality in Organizational Fields
35,969 Citations1983Paul DiMaggio, Walter W. Powell
Psychological BulletinSignificance tests and goodness of fit in the analysis of covariance structures.
18,289 Citations1980Peter M. Bentler, Douglas G. Bonett
International Journal of ForecastingHarvard Business Review
18,229 Citations1988J. Scott Armstrong, David M. Georgoff
Academy of Management ReviewUpper Echelons: The Organization as a Reflection of Its Top Managers
10,275 Citations1984Donald C. Hambrick, Phyllis A. Mason
Academy of Management ReviewOrganizational Strategy, Structure, and Process
7,092 Citations1978Raymond E. Miles, Charles C. Snow +2 more
SociologyOrganizational Structure, Environment and Performance: The Role of Strategic Choice
4,770 Citations1972John Child
Public Productivity ReviewThe Concept of Corporate Strategy
4,150 Citations1987Tom Iverson, Kenneth R. Andrews
Administrative Science QuarterlyThe Adolescence of Institutional Theory
3,676 Citations1987W. Richard Scott
Administrative Science QuarterlyInstitutional Sources of Change in the Formal Structure of Organizations: The Diffusion of Civil Service Reform, 1880-1935
2,891 Citations1983Pamela S. Tolbert, Lynne G. Zucker
Journal of ManagementBoards of Directors and Corporate Financial Performance: A Review and Integrative Model
2,670 Citations1989Shaker A. Zahra, John A. Pearce
Strategic Management JournalRetrospective reports of strategic‐level managers: Guidelines for increasing their accuracy
1,709 Citations1985George P. Huber, Daniel Power
This paper reviews several sources of the data inaccuracies that commonly affect retrospective data and offers guidelines for reducing the occurrence or magnitude of these inaccuracies.
Strategic Management JournalDiversification strategy, profit performance and the entropy measure
1,609 Citations1985Krishna G. Palepu
Psychological BulletinChoosing a multivariate model: Noncentrality and goodness of fit.
1,379 Citations1990Roderick P. McDonald, Herbert W. Marsh
Academy of Management ReviewCausal Analysis: Assumptions, Models, and Data
1,273 Citations1984Chester A. Schriesheim, Lawrence R. James +2 more
Academy of Management ReviewThe Composition of Boards of Directors and Strategic Control: Effects on Corporate Strategy
1,262 Citations1990Barry D. Baysinger, Robert E. Hoskisson
Administrative Science QuarterlyAn Emerging Strategy of "Direct" Research
1,227 Citations1979Henry Mintzberg
Administrative Science QuarterlyOrganizational Adaptation: Strategic Choice and Environmental Determinism
1,090 Citations1985Lawrence G. Hrebiniak, William F. Joyce
Strategic Management JournalStrategic decision models: Integrating different perspectives
1,054 Citations1991Michael A. Hitt, Beverly B. Tyler
Support was found for the rational/analytical normative choice perspective with objective criteria explaining the greatest amount of total explained variance in evaluation of target firms.
Academy of Management JournalEFFECTS OF BOARD AND OWNERSHIP STRUCTURE ON CORPORATE R&D STRATEGY.
937 Citations1991Barry D. Baysinger, Rita D. Kosnik +1 more
Academy of Management JournalAGENCY- AND INSTITUTIONAL-THEORY EXPLANATIONS: THE CASE OF RETAIL SALES COMPENSATION.
836 Citations1988Kathleen M. Eisenhardt
Organizational DynamicsTo avoid organizational crises, unlearn
814 Citations1984Paul C. Nystrom, William H. Starbuck
Strategic Management JournalExternal control, corporate strategy, and firm performance in research‐intensive industries
809 Citations1988Charles W. L. Hill, Scott A. Snell
The proposition that the divergence of interest between managers and stockholders has implications for corporate strategy and firm profitability is explored and is tested on 94 Fortune 500 firms drawn from research-intensive industries.
Strategic Management JournalResearch on corporate diversification: A synthesis
800 Citations1989Vasudevan Ramanujam, P. Rajan Varadarajan
Administrative Science QuarterlyGreenmail: A Study of Board Performance in Corporate Governance
657 Citations1987Rita D. Kosnik
Strategic Management JournalThe relative power of ceos and boards of directors: Associations with corporate performance
639 Citations1991John A. Pearce, Shaker A. Zahra
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.
The American Journal of Sociology
545 Citations2017William Graham Sumner
Academy of Management JournalISOMORPHISM AND EXTERNAL SUPPORT IN CONFLICTING INSTITUTIONAL ENVIRONMENTS: A STUDY OF DRUG ABUSE TREATMENT UNITS.
479 Citations1991Thomas D’Aunno, Robert I. Sutton +1 more
Using institutional theory, predictions about organizational units that moved from an environment making consistent demands to one making conflicting demands are developed and it is proposed that in response to such demands these units will adopt apparently conflicting practices.
The Economic JournalCorporate Control, Corporate Power.
451 Citations1982Geoffrey Whittington, Edward S. Herman
American Journal of SociologyThe Power and Functions of Boards of Directors: A Theoretical Synthesis
429 Citations1969Mayer N. Zald
Strategic Management JournalIndustry influences on strategy reformulation
424 Citations1982Anne Sigismund Huff
The industry group is described as a particularly important arena in which niche-related problems and solutions are identified and tested and the contribution of ‘borrowed experience’ to strategy reformulation is emphasized.
Academy of Management JournalINERTIA AND CREEPING RATIONALITY IN STRATEGIC DECISION PROCESSES.
406 Citations1989James W. Fredrickson, Anthony L. Iaquinto
Academy of Management JournalTURBULENCE AT THE TOP: A NEW PERSPECTIVE ON GOVERNANCE STRUCTURE CHANGES AND STRATEGIC CHANGE.
357 Citations1991Jerry Goodstein, Warren Boeker
Academy of Management ReviewResearch Methodologies for Contingency Approaches to Business Strategy<sup />
349 Citations1983Kathryn Rudie Harrigan
A multisite, multisource research methodology is suggested for students of corporate strategy in order to attain generalizability and statistical significance in reporting findings while not losing the nuances and understanding of each firm's environmental context.
Administrative Science QuarterlyOrganizational Structure and the Institutional Environment: The Case of Public Schools
331 Citations1982Brian Rowan
Strategic Management JournalThe emerging paradigm of strategic behavior
273 Citations1987H. Igor Ansoff
The paper proposes a paradigmic framework which legitimizes and accommodates the respective theories and suggests that the theories differ because they were based on observations of organizations in different environmental settings.
Strategic Management JournalAn investigation of the relationship between board composition and stockholder suits
260 Citations1990Idalene F. Kesner, Roy B. Johnson
The results indicate that, when compared to a control group, boards sued for failing to maintain their fiduciary responsibilities tended to have a greater proportion of inside directors; there was, however, no significant relationship between composition and suit outcomes.
Academy of Management JournalBOARDS OF DIRECTORS, TOP MANAGEMENT COMPENSATION, AND SHAREHOLDER RETURNS.
229 Citations1987J B Kerr, Richard A. Bettis
California Management ReviewThe Strategic Use of Corporate Board Committees
208 Citations1987J. Richard Harrison
Academy of Management JournalTHE COMPOSITION OF BOARDS OF DIRECTORS AND INCIDENCE OF GOLDEN PARACHUTES.
206 Citations1985Philip L. Cochran, Robert A. Wood +1 more
Academy of Management ReviewFirm Diversity: Conceptualization and Measurement
187 Citations1982Robert A. Pitts, H. Donald Hopkins
Journal of ManagementConfirmatory Modeling in Organizational Behavior/Human Resource Management: Issues and Applications
155 Citations1990Michael M. Harris, John Schaubroeck
Academy of Management ReviewThe Strategy-Legitimacy Nexus: A Thick Description
127 Citations1987Eric H. Neilsen, M. V. Hayagreeva Rao
Entrepreneurship Theory and PracticeOutside Directors and the Privately-Owned Firm: Are They Necessary?
113 Citations1988Roger H. Ford
Strategic Management JournalThe relationship of internal versus external orientations to financial measures of strategic performance
60 Citations1983John A. Pearce
Journal of Business StrategyInvolving the Board of Directors in Strategic Planning
47 Citations1986John W. Henke
Long Range PlanningWhy don't U.S. boards get more involved in strategy?
45 Citations1987Joseph Rosenstein
Strategic Management JournalThe visible and the invisible hand: Resource allocation in the industrial sector
26 Citations1983Richard A. Bettis, C. K. Prahalad
Frontiers of Health Services ManagementImproving the Effectiveness of Hospital Governing Boards
21 Citations1985Anthony R. Kovner
Academy of Management ReviewSome Methodological Issues Concerning Comparative Hospital-Organization Studies
21 Citations1980Claude L. Graeff
The results of the investigation point to the advisability of including hospitals with religious affiliations in studies of this type, and some of the methodological issues pertinent to hospital-organization studies are relevant to other organization research.
California Management ReviewPension Funds and Contests for Corporate Control
17 Citations1987James E. Heard