Jana Oehmichen

Boards of directors and organizational ambidexterity in knowledge-intensive firms

Abstract We examine the relation between boards of directors’ knowledge heterogeneity and organizational ambidexterity (OA) (i.e. simultaneous exploration and exploitation) in knowledge-intensive firms (KIFs). Although the literature on OA has started to emphasize its antecedents, the role of the board remains unaddressed. This is an important omission, as boards have become increasingly involved in strategy-making. In turn, studies on boards have looked at their influence on either exploration- or exploitation-type strategies. Yet, KIFs particularly need to balance both exploration and exploitation to renew their knowledge base. We draw on knowledge-based perspectives to disentangle the benefits and costs of board knowledge heterogeneity for driving OA in KIFs. Our empirical analysis based on a longitudinal panel of UK pharmaceutical firms provides support for our hypothesized U-shaped relation. Our findings suggest that the benefits of knowledge heterogeneity only outweigh the costs beyond a particular threshold. Overall, our theoretical approach and allied findings advance the literature by introducing boundary conditions to the resource provision role of boards in KIFs. We discuss contributions for organizational learning, strategic leadership, and human resource management. We conclude with implications for theory and practice, as well as key opportunities for future research.

Der Einfluss der Aufsichtsratszusammensetzung auf die Präsenz von Frauen in Aufsichtsräten

ZusammenfassungDer Deutsche Corporate Governance Kodex fordert, „bei der Besetzung des Vorstands und Aufsichtsrats auf eine ausreichende Vielfalt“ zu achten. Mit einem Frauenanteil von knapp 4% auf der Kapitalseite deutscher Aufsichtsräte war man von diesem Ziel im Jahr 2007 noch weit entfernt. Diese Studie analysiert, welche Dimensionen der Aufsichtsratszusammensetzung diesen geringen Anteil von Frauen im Aufsichtsrat erklären. Die Analysen umfassen die in den Jahren 1998 bis 2007 im CDAX gelisteten Unternehmen. Es zeigt sich, dass insbesondere die Zugehörigkeit zum eng verflochtenen Netz deutscher Aufsichtsräte einen negativen Effekt auf die Präsenz von Frauen auf der Kapitalseite von Aufsichtsräten hat. Demgegenüber hat der Anteil von Männern, die bereits Erfahrungen mit weiblichen Aufsichtsräten der Kapitalseite gemacht haben, einen positiven Einfluss. Ein solcher positiver Effekt geht auch von Frauen auf der Arbeitnehmerseite aus.AbstractThe German Corporate Governance Codex stresses adequate consideration in supervisory boards. Empirical data indicates that there is still a long way to go: Currently, in German listed firm only some 4% of supervisory board members are female. Our paper analyses which dimensions of board characteristics (e.g., board networks or codetermination) explain this low portion. Our analyses are based on 44,596 supervisory board member positions and include approximately 600 German listed companies from 1998 to 2007. We find that the probability of having a female shareholder representative increases if the male directors already had the chance to experience a female director and if we can find women among employee representatives. In contrast, it decreases with the degree of centrality of the supervisory board within the “old boys’ network”.

Former executives serving as non-executive directors: Resource channels or ineffective monitors

We investigate the performance effect of former executives serving as non-executive directors. We identify and untangle the two effects of former executives: they reduce the board’s independence and monitoring capability; and with their firm-specific internal knowledge, they more effectively provide advice to the current top management team. We show that internal firm-specific factors positively moderate the former executives’ performance effect. Powerful external owners and other independent stakeholders mitigate the potential lack of independence of non-executive directors. Furthermore, complex top management team structures and a loss of executive knowledge signal an increased need for advice that such directors can satisfy.

Women on German management boards

In this paper we want to investigate the impact of company owners on the low percentage of women on management boards and whether they are attempting to increase this percentage. After analysing whether ownership concentration influences the number of women on management boards we distinguish between different types of owners. We find that ownership concentration has no effect on the presence of women on German management boards, we show however that institutional and individual owners have a significantly positive effect. Classifying institutional owners into national and foreign owners illustrates that foreign investors are the primary driver of the positive effect within the class of institutional owners; the presence of national investors that are strongly influenced by the national banking system does not show any effect. Our analyses are based on 15,976 management board member positions from 2000 to 2007 in approximately 600 German-listed companies.

Value-based Management and Merger & Acquisition Returns: A Multi-level Contingency Model

Abstract Whereas the performance effects of value-based management (VBM) have been intensively addressed in previous research, little is known regarding whether—and which—specific managerial decisions are improved by VBM. In this study, we take advantage of merger and acquisition (M&A) decisions that allow us to analyze a specific managerial decision with a direct assessment by the capital market. Moreover, to better grasp the underlying mechanisms of VBM, we consider potential contingency factors that may affect the relationship between VBM and M&As. Specifically, we examine the risk of managerial self-interest in M&A decisions that may be influenced by a firms internal, industry- and country-specific contexts. We gather VBM data of firms from the Standard & Poors 500 Index and the MSCI Europe Index between 2005 and 2011, and combine the data with deal data resulting in a sample of 2787 deals. Our empirical results do not indicate a positive direct effect from VBM on M&A returns. However, we find that VBM leads to superior M&A returns in the presence of contingency factors that increase the risk for self-interested managerial decisions.

The Influence of Expatriates on Employees’ ESOP Participation and the Moderating Effect of Distance

We investigate the influence of expatriate behavior and presence on foreign subsidiary employee participation in employee stock ownership plans (ESOPs). Additionally, we examine the moderating effect of institutional distance. Based on the knowledge-based view, we expect that expatriates have a positive influence on employees’ ESOP participation. We conduct an empirical analysis based on data from a large European multinational enterprise (MNE) and examine the ESOP participation of 185,291 employees in 28 countries. Our empirical results show that expatriate ESOP participation increases whereas the pure presence of expatriates decreases employee’s willingness to participate in the ESOP. These effects are intensified by institutional distance. Nevertheless, we see a positive effect of expatriate presence when distance is low. Our findings lead us to the following implications: MNEs should select expatriates carefully when distance is high. High distance demands for the deployment of participating expatriat...

Cling together, swing together: Employee ownership and its influence on commitment and performance

We analyze the effect of employee ownership on foreign subsidiary employee commitment, individual performance and firm performance. Using a dual theoretical lens of agency theory and behavioral con...

Board Industry Expertise and Strategic Change: The Impact of Institutional Differences

In this paper we strive to answer the question whether and when board expertise is needed to induce corporate strategic change. Building on existing studies that combine considerations of both resource dependence and agency theory (Hillman & Dalziel, 2003) we aim to integrate country-level contingency factors that influence the effectiveness to which the board fulfills its functions – i.e. (1) the provision of counsel on organizational matters and (2) monitoring executives’ actions. To test these ideas, we use a multinational dataset of 2,995 firm year observations across 17 European and U.S. countries. Generally, our results suggest that industry experience is an important driver of strategic change across countries. The strength of the effect, however, is subject to the quality of institutional aspects: country-specific differences mitigate experts’ effect on strategic change by (1) providing alternative sources of information and (2) shifting monitoring power to entities other than the board. We derive...

Women on German management boards: How ownership structure affects management board diversity

In this paper we want to investigate the impact of company owners on the low percentage of women on management boards and whether they are attempting to increase this percentage. After analysing whether ownership concentration influences the number of women on management boards we distinguish between different types of owners. We find that ownership concentration has no effect on the presence of women on German management boards, we show however that institutional and individual owners have a significantly positive effect. Classifying institutional owners into national and foreign owners illustrates that foreign investors are the primary driver of the positive effect within the class of institutional owners; the presence of national investors that are strongly influenced by the national banking system does not show any effect. Our analyses are based on 15,976 management board member positions from 2000 to 2007 in approximately 600 German-listed companies.