Overcoming Competitive Inertia: Board Composition And Strategic Persistence

Abstract

This study examined whether the board of directors had an impact on the trajectory of organizational strategy, where the composition of the board might influence the likelihood of pursuing or halting a persistent, unchanging strategy. Our data suggest that a board that exhibited moderate agency-orientation displayed a more positive relationship to strategic persistence than either a neutral board or a strong agency-focused board. This finding may indicate that a neutral board, may benefit from the cooperation required to reach agreement and that a moderately agency-oriented board may not be able to effectively reap the benefits of either control or collaboration and may only serve as window dressing in its purported function of representing shareholder interests.