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Board Background Heterogeneity and Exploration‐Exploitation: The Role of the Institutionally Adopted Board Model
Author(s) -
Heyden Mariano L.M.,
Oehmichen Jana,
Nichting Sven,
Volberda Henk W.
Publication year - 2015
Publication title -
global strategy journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.814
H-Index - 24
eISSN - 2042-5805
pISSN - 2042-5791
DOI - 10.1002/gsj.1095
Subject(s) - on board , assertion , inclusion (mineral) , position (finance) , relation (database) , business , computer science , psychology , social psychology , data mining , finance , engineering , programming language , aerospace engineering
Boards of directors are in a position to contribute vital knowledge resources to strategy‐making. We propose that the relation between board functional background heterogeneity and exploration‐focused versus exploitation‐focused strategy is contingent on the extent to which the institutionally adopted board model enables or constrains inclusion of the board's knowledge resources in strategy‐making. We empirically juxtapose the A nglo‐ S axon (‘one‐tier’) and R hineland (‘two‐tier’) board models in the U . K . and G ermany, respectively, and find support for our assertion that the influence of board functional background heterogeneity on relative exploration orientation is more pronounced when the adopted board model accommodates inclusion of the board's knowledge resources into strategy‐making. Implications for theory and practice are discussed.