Session 428

Managing External Dependencies

Track O

Date: Tuesday, September 23, 2014


Time: 08:00 – 09:15


Room: Helsinki

Session Chair:

  • Laszlo Tihanyi, Texas A&M University

Title: Board and Board Committee Responses to Environmental Uncertainty


  • Orhun Guldiken, Manhattan College
  • Daanish Pestonjee, University of Arkansas
  • Alan Ellstrand, University of Arkansas

Abstract: By using resource dependence theory, this paper examines how organizations use their board of directors and board committees to mitigate environmental uncertainty. By using a randomly selected panel data from 129 Fortune 500 firms between 2002 and 2006, we found that organizations that face high levels of environmental uncertainty increase their board and board committee meeting frequency. Our results also show that there is a negative link between environmental uncertainty and multiple directorships of board members. This study provides a nuanced understanding of board-level tactics that organizations use as a response to environmental uncertainty.

Title: Board Pundits: A Resource Dependency Perspective


  • Carolin Hagen, BI Norwegian Business School
  • Amir Sasson, BI Norwegian Business School

Abstract: Firms employ full absorption, partial absorption and political strategies to manage their external dependencies. Political strategies have received only minor academic attention. We study corporate political activity through board composition over time in the context of substantial regulatory change. We advance the construct of board political capital and explicate the conditions under which the level of board political capital changes and the condition under which board political capital affects firm performance.

Title: Knowledge Dependence and the Formation of Director Interlocks


  • Michael Howard, Texas A&M University
  • Michael Withers, Texas A&M University
  • Laszlo Tihanyi, Texas A&M University

Abstract: Resource dependence theory posits that director interlocks are important means for firms to manage their external dependencies while gaining access to critical resources. Since the development of resource dependence theory, however, the technology-driven economy has emerged in which knowledge has increased in importance and is now recognized as a critical resource for developing and sustaining competitive advantage. In our proposed study, we intend to examine the resource dependence role knowledge may play in directing interlock formation. We introduce three forms of knowledge dependence—competitive, institutional, and technological—and using a sample of technology-based firms test the influence of knowledge dependencies on the likelihood of director interlock formation.

Title: Proxy Advisors as Gatekeepers of Shareholder Dissent: A Multilevel Investigation of Influence and Effectiveness


  • Steve Sauerwald, University of Illinois-Chicago
  • Marc van Essen, University of South Carolina
  • Johannes Van Oosterhout, Erasmus University - Rotterdam
  • Mike Peng, University of Texas at Dallas

Abstract: Proxy advisors are gatekeepers that provide voting recommendations to shareholders. While proxy advisors are becoming more influential, we have little evidence of how they influence shareholder dissent outside of the US context. Drawing on resource dependence theory, we examine the organizational and institutional factors that affect shareholder’s dependence on proxy advisor recommendations. Based on a multilevel analysis of 13,627 voting results from 16 Western European countries, we theorize that organizational factors substitute for proxy advice by providing internal governance resources capable of remedying agency problems. Moreover, we suggest that institutional factors affect shareholders’ strategic behavior, either promoting trading or monitoring roles. Finally, we document that the quality of proxy advice differs cross-nationally and is less predictive of agency problems in relationship-based than in market-based contexts.

All Sessions in Track O...

Sun: 08:00 – 09:15
Session 311: The Power of Power: The Role of Power and Politics in Strategy Processes
Session 386: Entrepreneurial Corporate Governance
Sun: 11:15 – 12:30
Session 476: The Dark Side of Strategic Leadership and Governance
Sun: 15:45 – 17:00
Session 435: What Happens After the CEO Has (Been) Gone?
Sun: 17:15 – 18:30
Session 611: Strategic Leadership and Governance IG Business Meeting
Mon: 08:00 – 09:15
Session 335: Internationalization and Strategic Decisions
Session 458: Those at the Top Matter!
Mon: 11:00 – 12:15
Session 336: CEO Roles, Frames, and Traits
Mon: 14:45 – 16:00
Session 331: CEO Compensation: What we Know, What we Need to Study
Mon: 16:30 – 17:45
Session 337: Power at the Top - The Influence of Directors
Session 411: Ownership and Governance
Tue: 08:00 – 09:15
Session 428: Managing External Dependencies
Session 467: Putting Pressure on the CEO
Tue: 11:00 – 12:15
Session 465: The Importance of Corporate Governance
Tue: 15:30 – 16:45
Session 429: Director Selection and Influence
Tue: 17:15 – 18:30
Session 431: Agents, Principals, and Owners
Session 432: Upper Echelons Revisited

Strategic Management Society