Effect of board characteristic on firm's strategic change

来源 :2014年中国工商管理研究前沿国际研讨会 | 被引量 : 0次 | 上传用户:mingming7978
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  The purpose of this study is to identify the relationship between characteristic of the board of directors and strategic change of a firm in the Chinas context.This study defines strategic change as strategic deviation relative to industry norms and strategic variation relative to historical experiences,selects the size,independence and leadership structure of the board of directors as the board characteristic,and then proposes the hypotheses about the effects of board characteristic on firms strategic change.This study takes strategic resource allocation properties (SRAP) as measures to calculate strategic deviation and strategic variation,and then empirically tests and verifies the hypotheses using the data of Chinas publicly listed companies of information technology (IT) industry from the year of 2006 to 2010.We find that the size,independence and leadership structure of the board of directors significantly affect both strategic deviation and strategic variation.Therefore,it comes to the conclusion that the board characteristic affects firms strategic change.Conclusion of the study indicates that in a dynamic environment,moderate reduction of the board size,increase of the proportion of independent directors and separate establishment of the chairman and CEO post can facilitate promoting the process of strategic change for a firm.This study makes us re-examine the role and significance of the board of directors which is served as the actor of strategic decision-making for a firm,as well as provides us with useful suggestions about how to form a board that can be adapted to meet the need of strategic change for a firm in a dynamic business environment.
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