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Showing papers on "Resource dependence theory published in 2012"


Journal ArticleDOI
TL;DR: In this article, the effect of state ownership on Chinese firms' foreign direct investment (FDI) ownership decisions is investigated, and the authors argue that state ownership creates the political affiliation of a firm with its home country government, which increases the firm's resource dependence on home-country institutions, while also influencing its image as perceived by host-country institutional constituents.
Abstract: This study investigates the effect of state ownership on Chinese firms’ foreign direct investment (FDI) ownership decisions. It adopts a political perspective to extend the application of institutional theory in international business research. Specifically, it examines firms’ heterogeneous responses to external institutional processes during foreign market entry, while taking into consideration the political affiliation of firms with the external institutions. We argue that state ownership creates the political affiliation of a firm with its home-country government, which increases the firm's resource dependence on home-country institutions, while at the same time influencing its image as perceived by host-country institutional constituents. Such resource dependence and political perception increase firms’ tendency to conform to, rather than resist, isomorphic institutional pressures. We tested our hypotheses using primary data for 132 FDI entries made by Chinese firms during 2000–2006, and we found that the effects of home regulatory, host regulatory and host normative pressures on a firm to choose a joint ownership structure were stronger when the share of equity held by state entities in the firm was high.

597 citations


Journal ArticleDOI
TL;DR: In this article, the authors focus on corporate political ties, which are boundary-spanning personal and institutional linkages between firms and the constituent parts of public authorities, and offer a contingency perspective by developing an integrative framework incorporating market environment, nonmarket environment, and interorganizational and intraorganizational factors that condition the value of corporate political tie, and identify potential operating mechanisms that may erode their value for a focal firm.
Abstract: Executive Overview Developing and nurturing links with political actors and institutions constitutes an important component of a firm's overall nonmarket strategy. This paper focuses on corporate political ties, which are boundary-spanning personal and institutional linkages between firms and the constituent parts of public authorities. To help address the inconsistency of past research findings on the value of corporate political ties, we offer a contingency perspective by developing an integrative framework incorporating market environment, nonmarket environment, and interorganizational and intraorganizational factors that condition the value of corporate political ties, and identify potential operating mechanisms that may erode their value for a focal firm. We conclude by developing suggestions for a future research agenda.

260 citations


Book ChapterDOI
01 Jan 2012
TL;DR: In this article, an abridged version of an extensive chapter that Edna and Uriel Foa published in 1976 in which the basic tenets of their resource theory of social exchange are outlined.
Abstract: This chapter is an abridged version of an extensive chapter that Edna and Uriel Foa published in 1976 in which the basic tenets of their resource theory of social exchange are outlined. The authors discuss a variety of details and issues such as the definition and classification of resources as well as the reciprocal relationship between the structure of resources and interpersonal behavior. A number of new exchange rules are proposed, and some consequences of inappropriate exchanges are analyzed. Foa and Foa conclude their chapter with an interesting account of many instances in which SRT is relevant to and useful for the analysis of social issues.

216 citations


Journal ArticleDOI
TL;DR: In this paper, the authors examined the influence of firms' ownership structure on their technological innovation performance and found that ownership concentration does not have a significant effect on firm technological innovation, but some ownership types (e.g., institutional and foreign) do have a positive effect.
Abstract: Manuscript Type: Empirical Research Question/Issue: This study examines the influence of firms' ownership structure on their technological innovation performance. First, we have examined whether ownership concentration positively influences technological innovation performance. Then we have investigated the primary reasons for the results derived from the first stage of our analysis by circumstantially exploring the impacts of four different ownership types. Research Findings/Insights: Using five sets of cross-sectional data, consisting of 301 Korean firms, we found that ownership concentration does not have a significant effect on firm technological innovation performance. However, some ownership types (e.g., institutional and foreign) do have a positive effect. Theoretical/Academic Implications: Drawing on agency theory and the resource dependence perspective, our paper is the first to consider a comprehensive treatment of the effect of ownership types on innovation in an emerging country, in particular in contrast to previous studies that have focused on advanced economies. Since only partial predictions suggested by agency and resource dependence perspectives were supported, it appears that neither theory adequately captures the ownership-technological innovation performance relationship. Thus, we suggest that future research should explore the question through a different theoretical lens to better understand the impact of ownership types. We suggest that transaction cost economics can be another path to approach the phenomenon. Practitioner/Policy Implications: This study suggests that managers should recognize how each characteristic of ownership structure (types) influences the building of firm-specific capabilities for innovation. Policy makers and managers should be aware of the impact of the complete range of ownership types on technological innovation performance when they implement corporate governance reform with greater effectiveness. It also suggests that successful technological catch-up and innovation not only require policies for upgrading technology capabilities, but also the setting up of a suitable supporting ownership structure that favors innovation of firms in emerging countries. We suggest that successful technological catch-up and innovation require a supporting ownership structure.

164 citations


Journal ArticleDOI
TL;DR: In this article, the authors investigated the relationship between board gender diversity and firm financial performance in the context of a transitional economy characterised by an underdeveloped corporate governance system and found that board diversity appears to have an effect on firm performance.
Abstract: This research investigates the relationship between board gender diversity and firm financial performance in the context of a transitional economy characterised by an underdeveloped corporate governance system. Using a sample of 120 publicly listed companies in Vietnam covering a 4-year period from 2008 to 2011, we examine this relationship in a dynamic modelling framework, which controls for potential sources of endogeneity. We find that board gender diversity appears to have an effect on firm performance. This finding remains robust when alternative proxies for gender diversity are employed and is consistent with the perspectives of agency theory and resource dependence theory. The number of female directors in the boardroom also matters, supporting the view that if female board representation affects firm outcomes, this effect is more pronounced when the number of female directors increases. It is observed, furthermore, that the marginal positive performance effect of board gender diversity ceases when the percentage of female directors reaches a breakpoint of about 20%. This finding suggests that there is perhaps a potential trade-off between the costs and benefits of board gender diversification. Our findings significantly contribute to the growing literature of non-US based studies, by providing robust empirical evidence from a transitional economy in East Asia.

162 citations


Journal ArticleDOI
TL;DR: In this paper, the authors examined the relationship between board characteristics and corporate social performance and found that board gender diversity was positively related to institutional and technical strength ratings, while board racial diversity is positively associated with institutional strength rating only.
Abstract: – Drawing on agency theory and resource dependence theory, the study aims to link board demographic diversity and independence to corporate social performance., – Data were collected from various sources for a sample of 475 publicly traded Fortune 500 companies between the years 2007 and 2008., – It is found that board gender diversity is positively related to institutional and technical strength ratings, while board racial diversity is positively related to institutional strength rating only. Both the proportion of outside directors and CEO non‐duality were negatively associated with institutional and technical weakness ratings., – The sample was predominantly large, publicly traded national and international corporations, which might limit the generalizability of the findings., – Management personnel should be cognizant of how board configurations and leadership structure may influence their corporate reputation for social responsibility. Efforts should be made to foster a group dynamic that is conducive to effective board functioning., – Few empirical studies have examined the relationship between board characteristics and corporate social performance. This study contributes to the literature by examining such associations.

150 citations


Journal ArticleDOI
TL;DR: Wang et al. as mentioned in this paper investigated the issue of forced CEO turnover in China and summarized the economic consequences of political connections within the framework of corporate governance, finding that politically connected CEOs are less likely to be fired and that the sensitivity of forced turnover to firm performance is weaker for connected CEOs than for their non-connected peers.
Abstract: Manuscript Type: Empirical Research Question/Issue: This paper investigates the issue of forced CEO turnover in China and summarizes the economic consequences of political connections within the framework of corporate governance. Research Findings/Insights: Using a large sample of listed firms in China from 2005 to 2008, we find that politically connected CEOs are less likely to be fired and that the sensitivity of forced turnover to firm performance is weaker for connected CEOs than for their non-connected peers. This suggests that CEOs in a transition economy tend to use their political resources for their own good. We also find a significantly positive relationship between the political connections of retained CEOs and future firm performance only when firm profitability is below the industry median. These findings suggest that the value of political connections is contingent on a firm's operating performance, and that the benefits of political connections may outweigh their costs when firms do not meet their profitability targets. Theoretical/Academic Implications: This study is the first to examine how the political ties of CEOs relate to their forced turnover. It integrates agency theory with resource dependence theory and contributes to the ongoing debate on the role of political connections in emerging markets. It also takes a step toward reconciling the mixed evidence for the effects of political connections on firm performance by demonstrating a sharp difference between firms under different operating statuses. Practitioner/Policy Implications: This study offers insights to policy makers who are interested in improving corporate governance in transitional economies such as China, where CEOs have close connections with the government. It also provides a deep perspective for the boards in politically connected firms, allowing them to deal with the relationship between top management and the government in a healthy way.

149 citations


Journal ArticleDOI
TL;DR: In this article, the authors argue that there is an under-theorized link in the micro-foundations for power resource theory, namely why wage earners trying to cope with social risks and demand for redistribution would turn to the state for a solution.
Abstract: The hitherto most successful theory explaining why similar industrialized market economies have developed such varying systems for social protection is the Power Resource Theory (PRT), according to which the generosity of the welfare state is a function of working class mobilization. In this paper, we argue that there is an under-theorized link in the micro-foundations for PRT, namely why wage earners trying to cope with social risks and demand for redistribution would turn to the state for a solution. Our approach, the Quality of Government (QoG) theory, stresses the importance of trustworthy, impartial, and uncorrupted government institutions as a precondition for citizens’ willingness to support policies for social insurance. Drawing on data on 18 OECD countries during 1984–2000, we find (a) that QoG positively affects the size and generosity of the welfare state, and (b) that the effect of working class mobilization on welfare state generosity increases with the level of QoG.

148 citations


Journal ArticleDOI
TL;DR: In this paper, the authors collect and analyze survey data from more than 100 nonprofit organizations, developing and testing a new "Nonprofit Sector Public Role Index" that assesses their perceived performance on six different roles simultaneously.
Abstract: Nonprofit organizations are increasingly advised to become fiscally self-sufficient and reduce resource dependence to preserve autonomy. However, little is known empirically about the relationships between particular resource streams and the roles espoused by nonprofit organizations that define their public value, including service delivery, innovation, advocacy, individual expression, social capital creation, and citizen engagement. To address this gap in the literature, we collect and analyze survey data from more than 100 nonprofit organizations, developing and testing a new “Nonprofit Sector Public Role Index” that assesses their perceived performance on six different roles simultaneously. Furthermore, we evaluate characteristics that make nonprofits more or less likely to fulfill various roles, with primary emphasis on financial resources. We find evidence that particular resource streams are strongly associated with particular nonprofit roles. Therefore, resource dependence—particularly dependence o...

145 citations


Journal ArticleDOI
TL;DR: In this paper, the authors use and extend resource-dependent theory by analyzing how loosely-coupled organizational structures facilitate the management of political ties by business groups in emerging economies.
Abstract: We use and extend resource-dependence theory by analyzing how loosely-coupled organizational structures facilitate the management of political ties by business groups in emerging economies. This topic is particularly salient because business groups are a prevalent organizational form in these countries where they face both a high dependence on governments to secure key resources and a unique set of risks associated with political ties. We identify and analyze four buffering mechanisms that enable loosely-coupled business groups to protect themselves against the adverse effects of such ties. We ground and contextualize these mechanisms by relying on a longitudinal case study of the Salim Group – a very large and well-connected Indonesian business group under the Suharto regime. This study is particularly relevant in the context of the renewed interest in the study of firms’ organizational structure.

145 citations


Journal ArticleDOI
TL;DR: In this paper, the authors provide a conceptual framework integrating the organizational relationships between supply chain and port stakeholders based on the theoretical background concerning the strategic management and the socially responsible marketing, and identify the influence of supply chain stakeholders on sustainability of ports by considering the propositions of interdependencies, power imbalance, and strategic options within resource dependence theory.
Abstract: Although sustainability is a topical concern in ports and the supply chain literature, the main focus of the academic research has been on the environmental dimension of sustainability rather than the social and economic dimensions. Since ports are indispensable nodes of supply chains involving many strategic stakeholders and activities interacting with each other, investigating the contribution of stakeholder relations on ports sustainability has emerged as a major concern. The main aim of this study is to provide a conceptual framework integrating the organizational relationships between supply chain and port stakeholders based on the theoretical background concerning the strategic management and the socially responsible marketing. This study attempts to identify the influence of supply chain stakeholders on sustainability of ports by considering the propositions of interdependencies, power imbalances, and strategic options within resource dependence theory. While this paper can be regarded as a review of port sustainability literature, the uniqueness lies on the consideration of the concept from the basis of resource dependence theory. Conceptual framework of this study suggests that ports should adopt strategies as insertion, integration and dominance for the management of interdependencies through the adoption of strategic tools to enhance effective stakeholder relations management and port sustainability.

Journal ArticleDOI
TL;DR: This paper found that adaptive performance is positively associated with task performance but that conscientiousness and organizational politics jointly influence the adaptive performance-task performance relationship, and they suggested that perceptions of organizational politics and individual differences in conscientiousness constitute contingencies of the adaptive-task-performance relationship.
Abstract: Summary Adaptive performance is a facet of performance that reflects acquiring enhanced competencies in response to change. Micro-level researchers have assumed that adaptive performance is beneficial for task performance. Similarly, macro-level researchers have suggested that organizations need to attend to, monitor, and respond to contingencies in their environments for adaptive performance to be beneficial for firm performance. Drawing from the attention-based theory of the firm and resource theory, we suggest that perceptions of organizational politics and individual differences in conscientiousness constitute contingencies of the adaptive performance–task performance relationship. In a sample of 92 call center employees, we found that adaptive performance is positively associated with task performance but that conscientiousness and organizational politics jointly influence the adaptive performance–task performance relationship. Copyright © 2011 John Wiley & Sons, Ltd.

Journal ArticleDOI
TL;DR: In this paper, a cross-sectional analysis of socio-economic performance across 33 small mining towns in Western Australia is presented, and the results of the analysis suggest that socioeconomic wellbeing in these towns is highly variable and contingent on a range of factors including the nature of the particular commodity, company structure, and location.

Journal ArticleDOI
TL;DR: In this paper, the authors examined the drivers of relationship quality and investigated its effect on performance in logistics outsourcing in China using transaction cost economics and resource dependence theory as bases of this study.
Abstract: Given that an increasing number of companies outsource their logistics activities to third-party logistics providers (3PLs), managing logistics outsourcing relationships has become a critical capability. Although the fundamental importance of relationship quality in supply chain relationship management has begun to be understood, it has not been investigated in the context of logistics outsourcing, especially in China. This study addresses the gap in the literature by examining the drivers of relationship quality and investigating its effect on performance in logistics outsourcing in China. We use transaction cost economics and resource dependence theory as bases of this study. Dependence on 3PL (i.e., 3PL importance and unavailability of alternatives), logistics performance and relationship characteristics (i.e., the level of information sharing, relationship length and legal contract) are hypothesized as the relationship drivers based on transaction cost economics and resource dependence theory. Findings reveal that 3PL importance, logistics performance and information sharing are positively related to relationship quality, and that relationship length and the presence of a legal contract are marginally and positively related to relationship quality. The positive influence of relationship quality on financial performance is also observed. The managerial implications of the findings are considered, and the limitations along with future research directions are discussed.

Journal ArticleDOI
TL;DR: This article found that resource flows to entrepreneurial ventures are predicted by the total dependence between parties engaged in the creation of value; they are not predicted by dependence advantage (or disadvantage) between the parties.

Journal ArticleDOI
TL;DR: A review of literature on the variety of theories in corporate governance can be found in this paper, where it is proposed that a mixture of various theories is best to describe an effective and efficient good governance practice rather than hypothesizing corporate governance based on a sole theory.
Abstract: The progression of theories or models of corporate governance, it is one of the new dimensions taken in a very crux of social ethics that is minimal and profit making took center stage. In this competitive world, companies are trying to inculcate the wisdom of good governance into their corporate organization. With the massive outpouring of capitalism, companies became stronger while governments around the globe had to accede to its influences and supremacy. However, this paper is a review of literature on the variety of theories in corporate governance. The ultimate theories in corporate governance started with the agency theory, extended into stewardship theory and stakeholder theory and evolved to resource dependency theory, political theory, legitimacy theory and social contract theory. However, these theories discourse the cause and consequence of variables, such as the formation of board structure, audit committee, independent non-executive directors and the duties of upper management and their organizational and social responsibilities rather than its regulatory structures. Similarly, it is proposed that a mixture of various theories is best to describe an effective and efficient good governance practice rather than hypothesizing corporate governance based on a sole theory.

07 Sep 2012
TL;DR: In this paper, the authors apply information processing and resource dependence perspectives and develop and test a model that express the conduct of different responses to supply chain disruptions, and use questioner and observation in data collection.
Abstract: How, why and under what circumstances, firm respond to supply chain disruptions? These are the questions, which firms all over the world are rapidly exposed to interruptions that delay their supply chain relationships and related operations. This study applies information processing and resource dependence perspectives and to develop and test a model that express the conduct of the different responses. We use questioner and observation in data collection .Samples are selected from two firms. Data is collected from 50 respondents. Hypotheses 2,4 and 5 are accepted in research. Descriptive statistics is applied in data analysis. Strong coordination in relationship of supply chain increase the profitability and market share, decrease inventory handling costs and make competitively strong. Poor coordination could affect performance of partners in chain of supplies. Supply chain disruption orientation leads towards motivation to act in order to attain stability motive.

Journal ArticleDOI
TL;DR: In this paper, the authors examined whether board interlocks enable or inhibit a firm's adoption of a proactive environmental strategy, using resource dependence theory, and found that board linkages may enable and inhibit proactive environmental strategies, depending on the relation between the provided resources and the environmental approach.
Abstract: Manuscript Type: Empirical Research Question/Issue: We examine whether director interlocks enable or inhibit a firm's adoption of a proactive environmental strategy. Specifically, using resource dependence theory, we argue that director interlocks with suppliers are linked to varying likelihoods that a firm adopts a proactive environmental strategy, depending on the relation between the provided resources and the environmental approach. Research Findings/Insight: Based on a sample of US electric firms, our results show that director interlocks with firms providing knowledge-intensive business services are positively linked to the adoption of proactive environmental strategies. However, director interlocks with firms providing financial resources and fossil fuel are negatively related to the adoption of these strategies for our sample. Theoretical/Academic Implications: Board linkages may enable and inhibit proactive environmental strategies. We contribute to resource dependence theory by offering empirical evidence that the reduction of uncertainty about critical resources by director interlocks may either make business change easier or constrict a firm's autonomy, making change more difficult. Practitioner/Policy Implications: The influence of interlocking directors varies depending on the type of resources that director interlocks transfer to their organizations. As a result, the selection of specific director interlocks can become very important to the strategic goals of the firm. Regulators should continue to pay attention to potential risks for other stakeholders from director interlocks.

Posted Content
TL;DR: The authors examined the role of mediating mechanisms impacting the relationship between managers' political ties and firm performance, with a focus on institutional transitions in China, and found that organizational regulatory legitimacy building, institutional support, and institutional entrepreneurial opportunity recognition are mediating factors by which managerial political ties can result in improved firm performance.
Abstract: This study examines the role of mediating mechanisms impacting the relationship between managers’ political ties and firm performance, with a focus on institutional transitions in China. Relying on both resource dependence and institutional theories, the analysis posits that three factors: organizational regulatory legitimacy building, institutional support, and institutional entrepreneurial opportunity recognition; mediate the relationship between managerial political ties and firm performance. Using survey data collected from 195 Chinese firms, the study concludes that institutional support and institutional entrepreneurial opportunity recognition represent two significant mediating mechanisms by which managerial political ties can result in improved firm performance. But, though a reliance on political utilization enhances organizational regulatory legitimacy, the results show that regulatory legitimacy does not directly contribute to firm performance. This study also discusses theoretical contributions, implications for managers, study limitations, and suggestions for future research.

Journal ArticleDOI
TL;DR: In this paper, a qualitative study of nine global pharmaceutical firms was conducted to investigate how actors perceived the strategic priorities of the firm during the downturn; the challenges of aligning GTM to address these priorities; the values of top management in supporting investment in GTM and the challenges encountered in coordinating and controlling GTM processes.
Abstract: This paper investigates global talent management (GTM) in science-based firms during the global downturn. Literature on the resource-based view, the best-fit perspective and resource dependency theory is used to frame a qualitative study of nine global pharmaceutical firms that explores how multiple actors view GTM during the global downturn. The study investigates how actors perceive the strategic priorities of the firm during the downturn; the challenges of aligning GTM to address these priorities; the values of top management in supporting investment in GTM and the challenges encountered in coordinating and controlling GTM processes. The findings reveal that actors considered GTM to be strategically important because it enabled firms to simultaneously manage downsizing, expansion and structural alignment, and it helped them to prepare for growth in the future. Multi national companies exercised control and coordination of GTM during the global downturn through increased use of structural reporting, gre...

Posted Content
01 Jan 2012
TL;DR: In this paper, the authors present an analytical framework for assessing a country's political economy and institutional environment as it relates to natural resource management and, on that basis, it offers a substantial set of targeted prescriptions across the natural resource value chain that are technically sound and compatible with the identified underlying incentives.
Abstract: This volume emphasizes instead the notion of 'good fit,' taking the position that welfare-promoting policies, institutions, and governance must be tailored, at least in part, to a country's specific context. In this vein, the volume presents an analytical framework for assessing a country's political economy and institutional environment as it relates to natural resource management and, on that basis, it offers a substantial set of targeted prescriptions across the natural resource value chain that are technically sound and compatible with the identified underlying incentives. In other words, the objective of this book is to help development practitioners unravel the political economy dynamics surrounding natural resource management in order to complement their technically grounded engagement. To this end, the analytical approach has been two-pronged. First, case studies were conducted on the political economy of the hydrocarbon and mineral value chains in 13 countries in the Africa, East Asia and Pacific, and Latin America and the Caribbean regions. Second, in light of this empirical material, the book highlights the current frontier of applied political economy analysis on resource dependence. This volume synthesizes the empirical and the theoretical with an emphasis on illuminating the implications for operational engagement in resource-dependent settings.

Journal ArticleDOI
TL;DR: A favorable response to minority participation in minority participation has been found to conform to demands from minority resource suppliers that hold an unconventional logic as discussed by the authors, which can be seen as an indicator of support for minority participation.
Abstract: To what extent do organizations respond favorably to minority participation—that is, conform to demands from minority resource suppliers that hold an unconventional logic? A favorable response to m...

01 Jan 2012
TL;DR: In this article, the authors consolidate 147 tests of RDT and corroborate its main predictions: organizations respond to resource dependencies by forming interorganizational arrangements like interlocks, alliances, joint ventures, in-sourcing arrangements, and mergers and acquisitions.
Abstract: text: Resource dependence theory (RDT) has long been a premier framework for understanding organization-environmental relations, but an empirical synthesis of its predictions is still lacking. Using meta-analysis, we consolidate 147 tests of RDT and corroborate its main predictions: organizations respond to resource dependencies by forming interorganizational arrangements like interlocks, alliances, joint ventures, in-sourcing arrangements, and mergers and acquisitions. In turn, these arrangements make them more autonomous and more legitimate. We also extend RDT in three ways. First, we ‘unpack’ the theory by showing that the mechanisms linking arrangement formation to organizational autonomy and legitimacy differ across arrangements. Second, we address the question whether RDT is also a theory of organizational performance. We find that whereas autonomy positively mediates the relationship between arrangement formation and performance, legitimacy does not. This suggests that RDT can also explain organizational actions which have societal acceptance rather than economic performance as an ulterior motive. Third, we assess whether competition law is a boundary condition to RDT’s prescriptions. Specifically, we show that the adoption of the horizontal merger guidelines in the U.S. has caused organizations to ‘flee’ from mergers to less regulated arrangements like alliances and joint ventures, and has hurt the profitability of the remaining mergers.

Journal ArticleDOI
Paul Dunn1
TL;DR: In this paper, a model is developed that identifies the human capital characteristics that contribute to a woman being appointed to an all-male board of directors, and the model is tested on a sample of 193 Canadian firms that appointed women to their boards of directors between 1996 and 2004.
Abstract: Although there is a paucity of female corporate directors in Canada, women are slowly managing to break the gender barrier of all-male boards of directors. Using resource dependency theory a model is developed that identifies the human capital characteristics that contribute to a woman being appointed to an all-male board. The model is tested on a sample of 193 Canadian firms that appointed women to their boards of directors between 1996 and 2004. The results show that women who are appointed to all-male boards have specialized knowledge skills; either they have firm-specific knowledge as insiders, or they are support specialists with a specific financial or legal expertise.

Journal Article
TL;DR: In this paper, the authors examine the effect of new governmental regulations on corporate boards of directors (BODs) and examine the predictions of both agency theory and resource dependence theory regarding both the structure and actions of BODs in times of governmental regulatory change.
Abstract: This paper investigates the effect of new governmental regulations on corporate Boards of Directors (BODs). We have reviewed the literature pertaining to agency theory and resource dependency theory, both of which have been assumed to explain the actions of BODs. We examine the predictions of both agency theory and resource dependence theory regarding both the structure and actions of BODs in times of governmental regulatory change. We then describe four historical events in which radical changes were required by certain governmental regulations, and discuss responses by BODs to each event, and present a discussion of these responses and how they adhere to or stray from the predictions of both agency theory and resource dependence theory. We conclude the paper with recommendations for the direction of further study. INTRODUCTION Organizational theorists have examined the role of corporate boards of directors (BODs) from many different perspectives. Two major theoretical perspectives that provide insight into the role and structure of BODs are agency theory and resource dependency theory (Hillman, Cannella and Paetzold, 2000). In addition to academic attention, BODs have received much attention from the popular press as well. The most recent proliferation of attention paid to BODs is largely due to the Sarbanes-Oxley Act and the instigating events that led to its passage in 2002. The Sarbanes-Oxley Act of 2002, among other requirements, mandates strict controls by and of corporate boards of directors. Sarbanes-Oxley was passed in reaction to a series of corporate scandals of the late 1990s and early 2000s including at Enron, Tyco International, and WorldCom. Because of the impact of the Sarbanes-Oxley Act of 2002 on BODs, many questions have arisen in regards to the roles, responsibilities, accountabilities, and structures of BODs. Is the role of the BOD primarily administrative oversight and control, or is it primarily boundary spanning and environment linking? How can the BOD best be held accountable for the actions of the corporation? Are there corporate stakeholders outside of the shareholders to whom the BOD is also to be held accountable? What proportion of the BOD should be comprised of insiders and what proportion should be outsiders? Is the insider / outsider taxonomy the best way to categorize board members? Although one of the most recent and salient, the Sarbanes-Oxley Act of 2002 is not the first government mandated regulation that requires major changes to be made by BODs. The 1978 deregulation of the United States Airline Industry and the 1980 deregulation of Savings and Loans associations followed by the subsequent Financial Institutions Reform, Recovery & Enforcement Act of 1989 are two additional examples of times that regulatory actions by the United States government caused major changes to be made by BODs. A third example of governmental actions requiring changes to be made by BODs is the Canadian government's 1983 amateur sports "Best Ever" program. It required radical changes of the volunteer BODs of Canada's National Sport Organizations (NSOs) (Amis, Slack, and Hinings, 2004a). The intent of this paper is to consider the tenets of agency theory and resource dependency theory as they relate to the responses made by BODs in the face of major government regulated changes. In the remainder of this paper, we will first highlight the generally accepted major roles and responsibilities of BODs. This will provide a solid framework from which to examine the theoretical perspectives of agency and resource dependency regarding BODs. After highlighting the roles and responsibilities of BODs, we will then examine agency theory and resource dependency and their relation to BODs. Next, we consider four historical examples - the Sarbanes-Oxley Act of 2002, the 1978 deregulation of the United States airlines industry, the changes in Savings and Loans regulations of the 1980s, and Canada's Best Ever amateur sports initiative of 1983 - as the contexts in which we will examine some historical responses of BODs to these government regulated changes. …


Journal ArticleDOI
TL;DR: The results show that hospitals which are not-for-profit, serve a more diverse inpatient population, and are located in more competitive and affluent markets exhibit a higher degree of cultural competency.

Journal ArticleDOI
TL;DR: Qualitative evidence suggests that managers' pursuit of their own intraorganizational interests helps to explain why outsourcing decisions were often divorced from transaction characteristics.
Abstract: How does managers' pursuit of their own intraorganizational interests affect decisions about what work to outsource and how to contract with vendors? I study this question using a qualitative study of outsourcing in the information technology department of a large financial services firm. Traditional transaction cost-based theories argue that decisions about which transactions to outsource should reflect the characteristics of those transactions, yet I find only a weak link between transaction characteristics and outsourcing decisions. Qualitative evidence suggests that managers' pursuit of their own intraorganizational interests helps to explain why outsourcing decisions were often divorced from transaction characteristics. I found that the consequences of outsourcing projects were consistent with the assumptions of transaction cost and capabilities-based theories: managers had less authority over outsourced projects than internal ones, those projects were subject to weaker administrative controls, and outsourced vendors provided different capabilities than internal suppliers. However, the way that those consequences were evaluated often reflected managers' own interests rather than those of the organization. I highlight three aspects of organizational structure that affected how managers evaluated outsourcing: the nature of differentiated goals and responsibilities, the administrative controls that managers faced, and the pressures caused by interdependent workflows within the organization. I also show how the distribution of authority and other resources shaped which projects were outsourced. The analysis highlights the value of understanding make-or-buy decisions as an endogenous consequence of the structure in which those decisions take place, rather than as isolated decisions that are maximized regardless of their context.

Journal ArticleDOI
TL;DR: It is suggested that the way in which family-supportive organization perceptions affect work-family conflict is via experiences of domain overload, which is fully mediated via work and family overload.
Abstract: Although the concept of family-supportive organization perceptions has been well received in the literature, the actual construct has been relatively understudied. In the present study, we accomplish two goals. First using confirmatory factor analysis, we report on the validation of an abbreviated six-item measure of family-supportive organization perceptions that demonstrates limited measurement error. Second, we link role theory, social support resource theory, and the direct effects model of social support, to suggest that the way in which family-supportive organization perceptions affect work-family conflict is via experiences of domain overload. Contrary to the direct effects model of social support, family-supportive organization perceptions do not differentially impact work and family overload. Consistent with social support resource theory though, the effects of family-supportive organization perceptions on work-to-family and family to-work conflict are fully mediated via work and family overload (respectively). Avenues for future research incorporating family-supportive organization perceptions are also considered.

Journal ArticleDOI
TL;DR: In this paper, a power game between the headquarters, subsidiary, and local networks is used to determine the extent to which firm-specific capabilities are to be transferred to the subsidiary, but any inclinations for the subsidiary to differentiate itself from the parent will discourage such transfers.