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Boardroom Strategic Decision‐Making Style: Understanding the Antecedents
Author(s) -
Bailey Bernard C.,
Peck Simon I.
Publication year - 2013
Publication title -
corporate governance: an international review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.866
H-Index - 85
eISSN - 1467-8683
pISSN - 0964-8410
DOI - 10.1111/corg.12008
Subject(s) - operationalization , rationality , decision quality , psychology , style (visual arts) , politics , empirical research , variance (accounting) , public relations , business , political science , marketing , accounting , philosophy , archaeology , epistemology , law , patient satisfaction , history
Manuscript Type Empirical Research Issue The purpose of this study is to develop an understanding of the antecedents that lead to boards embracing either procedural rationality or political behaviors as a particular style of strategic decision making. Research Findings Semi‐structured interviews with 29 directors and officers of eight publicly‐traded US companies were conducted. Of the eight boards analyzed, there were clear differences in the predominant style of decision making operationalized by each. More importantly, however, the variance between boards that tended towards procedural rationality versus political behaviors as the predominant style of strategic decision making was explained by three primary factors. These included: (1) shared mental models; (2) balanced power relationships between the board members and CEO , as well as amongst individual board members; and (3) board chair leadership skills. Our data allow us to identify important antecedents of these factors. Theoretical Implications We add to the work seeking to understand the processes associated with board level strategic decision making. We augment decision‐making theories relating to procedural rationality and political behaviors with board‐specific factors and their characteristics. Practitioner Implications We isolate a number of antecedents relating to the conduct of boards and the environment of board decision making. We also highlight the roles of the board chair and the CEO for creating a boardroom environment conducive to engaging in quality decision‐making processes.