The Influence of Top Management Team’s Corporate Governance Orientation on Strategic Renewal Trajectories

55 Pages Posted: 7 Sep 2010

See all articles by Zenlin Kwee

Zenlin Kwee

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)

Date Written: July 23, 2010

Abstract

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.

Keywords: corporate governance, exploitation and exploration, Royal Dutch Shell, strategic renewal, top management team, upper echelons perspective

JEL Classification: D21, L20, M

Suggested Citation

Kwee, Zenlin and Van Den Bosch, Frans A. J. and Volberda, Henk W., The Influence of Top Management Team’s Corporate Governance Orientation on Strategic Renewal Trajectories (July 23, 2010). ERIM Report Series Reference No. ERS-2010-032-STR. Available at SSRN: https://ssrn.com/abstract=1671213

Zenlin Kwee (Contact Author)

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM) ( email )

P.O. Box 1738
Room T08-21
3000 DR Rotterdam, 3000 DR
Netherlands

Frans A. J. Van Den Bosch

Erasmus University Rotterdam (EUR) - Department of Strategic Management and Entrepreneurship ( email )

RSM Erasmus University
Rotterdam, 3000 DR
Netherlands
+31 10 408 1955/2005 (Phone)
+31 10 453 0137 (Fax)

HOME PAGE: http://www.rsm.nl/fvandenbosch

Erasmus Research Institute of Management (ERIM)

P.O. Box 1738
3000 DR Rotterdam
Netherlands

Henk W. Volberda

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM) ( email )

P.O. Box 1738
Room T08-21
3000 DR Rotterdam, 3000 DR
Netherlands
+31 10 408 2761 (Phone)
+31 10 408 9013 (Fax)

HOME PAGE: http://www.eur.nl/fbk/dep/dep4/faculty_members/Henk_Volberda

Erasmus Research Institute of Management (ERIM)

P.O. Box 1738
3000 DR Rotterdam
Netherlands

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