Institutional and Strategic Choice Perspectives on Board Involvement in the Strategic Decision Process

Academy of Management Journal, Vol. 35, No. 4, pp. 766-794, 1992

29 Pages Posted: 4 Mar 2012

See all articles by William Q. Judge

William Q. Judge

Old Dominion University

Carl P. (Dean) Zeithaml

affiliation not provided to SSRN

Date Written: 1992

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: institutional perspective, strategic choice perspective, board of directors, strategic decision process

JEL Classification: G30

Suggested Citation

Judge, William Q. and Zeithaml, Carl P. (Dean), Institutional and Strategic Choice Perspectives on Board Involvement in the Strategic Decision Process (1992). Academy of Management Journal, Vol. 35, No. 4, pp. 766-794, 1992. Available at SSRN: https://ssrn.com/abstract=1154530

William Q. Judge (Contact Author)

Old Dominion University ( email )

Norfolk, VA 23529-0222
United States
7576836730 (Phone)

Carl P. (Dean) Zeithaml

affiliation not provided to SSRN ( email )

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