The Influence of Top Management Team’s Corporate Governance Orientation on Strategic Renewal Trajectories
Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM)
Frans A. J. Van Den Bosch
Erasmus University Rotterdam (EUR) - Department of Strategic Management and Entrepreneurship; Erasmus Research Institute of Management (ERIM)
H. W. Volberda
Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM); Erasmus Research Institute of Management (ERIM)
July 23, 2010
ERIM Report Series Reference No. ERS-2010-032-STR
Using the upper echelons perspective together with corporate governance and strategic renewal literature, this paper investigates how top managers’ corporate governance orientation influences a firm’s strategic renewal trajectories over time. Through both a qualitative analysis (1907-2004) and a quantitative analysis (1959-2004), we investigate this under-researched question within the context of a large incumbent firm: Royal Dutch Shell plc. Our results indicate that top managers having an Anglo-Saxon corporate governance orientation are more likely to pursue exploitative and external-growth strategic renewal trajectories, while those having a Rhine corporate governance orientation are more likely to pursue exploratory and internal-growth strategic renewal trajectories. We also found a positive moderating effect of the proportion of shareholders from the Anglo-Saxon countries on exploitative and external-growth strategic renewal trajectories. Our findings indicate that top managers’ corporate governance orientation can be an important antecedent of strategic renewal and of organisational ambidexterity, both of which influence corporate longevity.
Number of Pages in PDF File: 55
Keywords: corporate governance, exploitation and exploration, Royal Dutch Shell, strategic renewal, top management team, upper echelons perspective
JEL Classification: D21, L20, Mworking papers series
Date posted: September 7, 2010
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