Board Leadership and Strategy Involvement in Small Firms: A Team Production Approach

16 Pages Posted: 5 Jul 2011

See all articles by Silke Machold

Silke Machold

University of Wolverhampton

Morten Huse

Norwegian School of Management (BI) - Department of Innovation and Economics; MH Management Consultants; University of Witten/Herdecke; BI Norwegian Business School

Alessandro Minichilli

Bocconi University - Department of Management and Technology

Mattias Nordqvist

Jonkoping University - Jonkoping International Business School (JIBS); Babson College - Arthur M. Blank Center for Entrepreneurship

Date Written: July 2011

Abstract

Research Question/Issue: Boards' involvement in strategy is generally seen to be an indicator of board effectiveness, but less is known about the relationship between board leadership and strategy involvement, especially in small firms. This study analyzes board leadership from a team production perspective as an antecedent to board strategy involvement in small firms. Research Findings/Insights: Using survey data from 140 small firms in Norway collected in two different time periods, we demonstrate that leadership behaviors and processes have a greater impact on boards' strategy involvement than structural leadership characteristics alone. Theoretical/Academic Implications: The study provides empirical support for a team production perspective on boards. Our data show that (1) board members' knowledge, board development, and board chairperson leadership efficacy positively influence boards' strategy involvement, and (2) chairperson leadership efficacy enhances boards' strategy involvement under structural conditions of combined CEO/chairperson leadership and changes in board composition. These findings expand the traditional understanding of structural leadership conditions.

Practitioner/Policy Implications: The study offers insights to small business owners and managers on how to improve the strategy involvement of boards. For policy makers, the study has implications for the content of codes of good governance practice relevant to small firms, specifically in relation to board development initiatives and board evaluations.

Keywords: Corporate Governance, Board Leadership, Small Firms, Team Production Theory

Suggested Citation

Machold, Silke and Huse, Morten and Minichilli, Alessandro and Nordqvist, Mattias, Board Leadership and Strategy Involvement in Small Firms: A Team Production Approach (July 2011). Corporate Governance: An International Review, Vol. 19, Issue 4, pp. 368-383, 2011, Available at SSRN: https://ssrn.com/abstract=1878987 or http://dx.doi.org/10.1111/j.1467-8683.2011.00852.x

Silke Machold (Contact Author)

University of Wolverhampton

Morten Huse

Norwegian School of Management (BI) - Department of Innovation and Economics ( email )

P.O. Box 580
N-1302 Sandvika
Norway

MH Management Consultants ( email )

Butterudveien 32
N 1339 Vøyenenga
Vøyenenga
Norway

HOME PAGE: http://www.boardsandwine.net

University of Witten/Herdecke ( email )

Alfred-Herrhausen-Straße 50
Witten, 58448
Germany

BI Norwegian Business School ( email )

Nydalsveien 37
Oslo, 0442
Norway

Alessandro Minichilli

Bocconi University - Department of Management and Technology ( email )

Via Roentgen 1
Milan, MI 20136
Italy

Mattias Nordqvist

Jonkoping University - Jonkoping International Business School (JIBS) ( email )

Jönköping, 55111
Sweden

Babson College - Arthur M. Blank Center for Entrepreneurship

231 Forest Street
Babson Park, MA 02457-0310
United States

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