Alessandro Zattoni

Boards of Directors' Contribution to Strategy: A Literature Review and Research Agenda

Research Question/Issue: Over the last four decades, research on the relationship between boards of directors and strategy has proliferated. Yet to date there is little theoretical and empirical agreement regarding the question of how boards of directors contribute to strategy. This review assesses the extant literature by highlighting emerging trends and identifying several avenues for future research. Research Findings/Results: Using a content-analysis of 150 articles published in 23 management journals up to 2007, we describe and analyze how research on boards of directors and strategy has evolved over time. We illustrate how topics, theories, settings, and sources of data interact and influence insights about board–strategy relationships during three specific periods. Theoretical Implications: Our study illustrates that research on boards of directors and strategy evolved from normative and structural approaches to behavioral and cognitive approaches. Our results encourage future studies to examine the impact of institutional and context-specific factors on the (expected) contribution of boards to strategy, and to apply alternative methods to fully capture the impact of board processes and dynamics on strategy making. Practical Implications: The increasing interest in boards of directors’ contribution to strategy echoes a movement towards more strategic involvement of boards of directors. However, best governance practices and the emphasis on board independence and control may hinder the board contribution to the strategic decision making. Our study invites investors and policy-makers to consider the requirements for an effective strategic task when they nominate board members and develop new regulations.

Beyond the black box of demography: board processes and task effectiveness within Italian firms

In this paper we analyse boards of directors as workgroups, i.e. groups of people that perform one or more tasks within an organisational context. Building on previous studies, we developed a model that relates groups social-psychological processes to three different board tasks: service, monitoring and networking. We tested our model through a survey on 301 large manufacturing firms in Italy. Our findings support the idea that (a) process variables and, to a limited extent, demographic variables significantly influence board task performance; (b) board processes have a different impact on each specific board task; (c) board task performance varies depending upon firm and industry characteristics.

Board task performance: An exploration of micro- and macro-level determinants of board effectiveness

This paper addresses recent calls to narrow the micro–macro gap in management research (Bamberger, 2008), by incorporating a macro-level context variable (country) in exploring micro-level determinants of board effectiveness. Following the integrated model proposed by Forbes and Milliken (1999), we identify three board processes as micro-level determinants of board effectiveness. Specifically, we focus on effort norms, cognitive conflicts and the use of knowledge and skills as determinants of board control and advisory task performance. Further, we consider how two different institutional settings influence board tasks, and how the context moderates the relationship between processes and tasks. Our hypotheses are tested on a survey-based dataset of 535 medium-sized and large industrial firms in Italy and Norway, which are considered to substantially differ along legal and cultural dimensions. The findings show that: (i) Board processes have a larger potential than demographic variables to explain board task performance; (ii) board task performance differs significantly between boards operating in different contexts; and (iii) national context moderates the relationships between board processes and board task performance. Copyright

Does Family Involvement Influence Firm Performance? Exploring the Mediating Effects of Board Processes and Tasks:

Following calls to capture the consequences of family involvement in the business, this article empirically investigates the mediating role of board processes (i.e., effort norms, use of knowledge and skills, and cognitive conflicts) and board (control and strategy) tasks in the relationship between family involvement and firm performance in small and medium-sized companies. To address this purpose, we developed a theoretical model using family business and corporate governance literature. We collected data from one sample of small and medium-sized enterprises, and we applied structural equation modeling to validate and test constructs and relationships. Our results show that (a) family involvement in the business has a positive impact on effort norms and use of knowledge and skills, and a negative one on cognitive conflicts, (b) board processes have generally a positive influence on board tasks performance, and (c) board strategy task performance positively influences firm financial performance, while board control tasks do not have a significant impact. Results have implications for both research and practice.

Developing Corporate Governance Research Through Qualitative Methods: A Review of Previous Studies

Manuscript Type. Review. Research Question/Issue. The article is concerned with the prevalence, character, and development of qualitative research within the field of corporate governance. The paper provides an overview of published qualitative research in the field of corporate governance based on a structured literature search of papers published in scholarly peer‐reviewed journals between 1986 and 2011. Research Findings/Insights. A fine‐grained search based on key words resulted in a sample of 78 qualitative corporate governance studies. A review and content analysis of these studies show that qualitative studies in governance have grown in number since the 1990s, but remain a small fraction of the published work on corporate governance. Studies are mostly developed by UK and European scholars, published in European journals and tend to explore boards of directors more than other governance related actors and mechanisms. These studies utilize a range of disciplines, predominantly management, adopting a wide range of methods, the most prevalent being that of the interview, often in combination with other methods to get a better account of the empirical phenomenon. Theoretical/Academic Implications. The search reveals an eclectic range of theories, spanning several disciplines, which is serving to generate, elaborate, and refine theorizing about corporate governance and the associated meanings, mechanisms, processes and relationships. There is much scope and need for more qualitative studies of significant rigor and relevance which explore the array of interactions and processes involved in corporate governance, across different levels of analysis and contexts. Practitioner/Policy Implications. After over two decades of research and reform of corporate governance, problems of practice remain, and corporate governance prescription via codes and other forms of regulation is increasing in search of better governance. Qualitative research can assist policy‐makers and practitioners to develop more efficient governance mechanisms, by shedding light on the efficacy of policy prescription. Qualitative research provides a basis for rethinking and challenging some of the dominant assumptions and meanings about how governance actors and institutions actually function.

A Contingency Model of Boards of Directors and Firm Innovation: The Moderating Role of Firm Size

This study asserts that the effects of board characteristics on firm innovation need to be evaluated with reference to contingency variables. A literature review suggests that relatively few studies adopt a contingency view when examining the outcomes of boards of directors. This study examines the influence on firm innovation of characteristics such as board size, outsider ratio and board diversity, and suggests that their influence is contingent upon firm size. The model is tested on a sample of Italian companies and finds support for the contingency hypothesis. This study advances research on boards of directors by emphasizing the importance of context.

THE PERFORMANCE OF BUSINESS GROUP FIRMS DURING INSTITUTIONAL TRANSITION: A LONGTITUDINAL STUDY OF INDIAN FIRMS

Question/Issue: Institutional and transaction costs theories highlight the idea that group affiliated firms outperform unaffiliated firms in emerging economies. The persistence of superior performance for group affiliated firms is, however, questioned by the fast and recent development of markets and institutions in these countries. In this article, we explore this link between firm performance and the evolution of institutional environment. Research Findings/Insights: The setting of the empirical investigation is India in the post-reform era (post 1990). We test for effects of business group affiliation on firm performance over a 17 year time period from 1990 to 2006. Our findings show that (i) the performance benefits of group affiliation erode with the evolution of the institutional environment; (ii) older affiliated firms are better able to cope with institutional transition than younger affiliated firms; (iii) service-sector affiliated firms are better able to cope with institutional transition than manufacturing-sector affiliated firms. Theoretical/Academic Implications: Our findings both support the institution - and transaction costs-based theory of business groups, and extends it by incorporating a dynamic and longitudinal component. They also demonstrate - in line with recent works - that the benefits of group membership differ for different types of member firms. Practitioner/Policy Implications: The article has implications for both managers and policy makers. Managers of business groups should timely adapt their strategy to the evolution of the institutional environment. Policy makers should, instead, devote attention to the consequences of their policies because they may undermine the efficiency of large national companies.

Trust, Firm Life Cycle, and Actual Board Behavior: Evidence from "One of the Lads" in the Board of Three Small Firms

Processes outside and inside the boardroom and actual board behavior in small firms are investigated in this empirical study where one of the authors was a participant observer. A firms life-cycle approach was used. The study shows that actual board behavior changes along the life-cycle phases: in the start-up phase, board involvement is in legitimacy tasks; in the growth phase, boards involvement is in advisory tasks; and in the firm crisis stage, the boards involvement is in control tasks. We argue, based on the observations, that boards are empowered to these tasks based on different types of trust relationships between internal actors, external actors, and the board members.

Configurations of Capacity for Change in Entrepreneurial Threshold Firms: Imprinting and Strategic Choice Perspectives

Imprinting theory suggests that founding conditions are ‘stamped’ on organizations, and these imprinted routines often resist change. In contrast, strategic choice theory suggests that the firm can overcome organizational inertia and deliberately choose its future. Both theories offer dramatically different explanations behind an organizations capacity for change. IPO firms provide a unique context for exploring how imprinting forces interact with strategic choice factors to address organizational capacity for change as a firm moves from private to public firm status. Juxtaposing imprinting and strategic choice perspectives, we employ fuzzy set analysis to examine the multi-level determinants of organizational capacity for change. Our cross-national data reveal three effective configurations of organizational capacity for change within IPOs, and two ineffective configurations. Our results suggest that the antecedents of organizational capacity for change in entrepreneurial threshold firms are non-linear, interdependent, and equifinal.

An evolutionary overview of the ownership, governance and strategy of Mediobanca: from the kingmaker of Italian capitalism to a large financial conglomerate

The chapter presents the history of Mediobanca from its birth to today. This history is particularly interesting for several reasons. First, Mediobanca has for a long time been the dominant player of the national investment banking industry thanks to its links with the three largest Italian commercial banks. Furthermore, Mediobanca has played a key role in the development of the national economic system by both favouring the stability of control and supporting the growth of large national private industrial groups. Finally, the history of Mediobanca is strictly intertwined with the personality and the vision of Enrico Cuccia, one of the most influential and admired bankers of its time.