Integrating agency and resource dependence theory : firm profitability, industry regulation, and board task performance

Boards of directors are key governancemechanisms in organizations and fulfill twomain tasks:monitoringmanagers and firm performance, and providing advice and access to resources. In spite of a wealth of researchmuch remains unknown about how boards attend to the two tasks. This study investigates whether organizational (firm profitability) and environmental factors (industry regulation) affect board task performance. The data combine CEOs' responses to a questionnaire, and archival data from a sample of large Italian firms. Findings show that past firm performance is negatively associatedwith board monitoring and advice tasks; greater industry regulation enhances perceived board task performance; board monitoring and advice tasks tend to reinforce each other, despite their theoretical and practical distinction.

Reverse resource exchanges in service supply chains:the case of returnable transport packaging

Purpose: The purpose of this paper is to understand how reverse resource exchanges and resource dependencies are managed in the service supply chain (SSC) of returnable transport packaging (RTP). Design/methodology/approach: A single case study was conducted in the context of automotive logistics focusing on the RTP SSC. Data were collected through 16 interviews, primarily with managers of a logistics service provider (LSP) and document analysis of contractual agreements with key customers of the packaging service. Findings: Resource dependencies among actors in the SSC result from the importance of the RTP for the customer’s production processes, the competition among users for RTP and the negative implications of the temporary unavailability of RTP for customers and the LSP (in terms of service performance). Amongst other things, the LSP is dependent on its customers and third-party users (e.g. the customer’s suppliers) for the timely return of package resources. The role of inter-firm integration and collaboration, formal contracts as well as customers’ power and influence over third-party RTP users are stressed as key mechanisms for managing LSP’s resource dependencies. Research limitations/implications: A resource dependence theory (RDT) lens is used to analyse how reverse resource exchanges and associated resource dependencies in SSCs are managed, thus complementing the existing SSC literature emphasising the bi-directionality of resource flows. The study also extends the recent SSC literature stressing the role of contracting by empirically demonstrating how formal contracts can be mobilised to explicate resource dependencies and to specify, and regulate, reverse exchanges in the SSC. Practical implications: The research suggests that logistics providers can effectively manage their resource dependencies and regulate reverse exchanges in the SSC by deploying contractual governance mechanisms and leveraging their customers’ influence over third-party RTP users. Originality/value: The study is novel in its application of RDT, which enhances our understanding of the management of reverse exchanges and resource dependencies in SSCs.

Do board contacts matter? : an analysis of the relationship between boards of directors’ ties and the performance of Australia’s largest companies.

Boards of directors are thought to provide access to a wealth of knowledge and resources for the companies they serve, and are considered important to corporate governance. Under the Resource Based View (RBV) of the firm (Wernerfelt, 1984) boards are viewed as a strategic resource available to firms. As a consequence there has been a significant research effort aimed at establishing a link between board attributes and company performance. In this thesis I explore and extend the study of interlocking directorships (Mizruchi, 1996; Scott 1991a) by examining the links between directors’ opportunity networks and firm performance. Specifically, I use resource dependence theory (Pfeffer & Salancik, 1978) and social capital theory (Burt, 1980b; Coleman, 1988) as the basis for a new measure of a board’s opportunity network. I contend that both directors’ formal company ties and their social ties determine a director’s opportunity network through which they are able to access and mobilise resources for their firms. This approach is based on recent studies that suggest the measurement of interlocks at the director level, rather than at the firm level, may be a more reliable indicator of this phenomenon. This research uses publicly available data drawn from Australia’s top-105 listed companies and their directors in 1999. I employ Social Network Analysis (SNA) (Scott, 1991b) using the UCINET software to analyse the individual director’s formal and social networks. SNA is used to measure a the number of ties a director has to other directors in the top-105 company director network at both one and two degrees of separation, that is, direct ties and indirect (or ‘friend of a friend’) ties. These individual measures of director connectedness are aggregated to produce a board-level network metric for comparison with measures of a firm’s performance using multiple regression analysis. Performance is measured with accounting-based and market-based measures. Findings indicate that better-connected boards are associated with higher market-based company performance (measured by Tobin’s q). However, weaker and mostly unreliable associations were found for accounting-based performance measure ROA. Furthermore, formal (or corporate) network ties are a stronger predictor of market performance than total network ties (comprising social and corporate ties). Similarly, strong ties (connectedness at degree-1) are better predictors of performance than weak ties (connectedness at degree-2). My research makes four contributions to the literature on director interlocks. First, it extends a new way of measuring a board’s opportunity network based on the director rather than the company as the unit of interlock. Second, it establishes evidence of a relationship between market-based measures of firm performance and the connectedness of that firm’s board. Third, it establishes that director’s formal corporate ties matter more to market-based firm performance than their social ties. Fourth, it establishes that director’s strong direct ties are more important to market-based performance than weak ties. The thesis concludes with implications for research and practice, including a more speculative interpretation of these results. In particular, I raise the possibility of reverse causality – that is networked directors seek to join high-performing companies. Thus, the relationship may be a result of symbolic action by companies seeking to increase the legitimacy of their firms rather than a reflection of the social capital available to the companies. This is an important consideration worthy of future investigation.

Exploring the role of the governing body (board) in information technology governance : a study of Australian universities

In this thesis, I advance the understanding of information technology (IT) governance research and corporate governance research by considering the question “How do boards govern IT?” The importance of IT to business has increased over the last decade, but there has been little academic research which has focused on boards and their role in the governance of IT (Van Grembergen, De Haes and Guldentops, 2004). Most of the research on information technology governance (ITG) has focused on advancing the understanding and measurement of the components of the ITG model (Buckby, Best & Stewart, 2008; Wilkin & Chenhall, 2010), a model recommended by the IT Governance Institute (2003) as ‘best practice’ for boards to use in governing IT. IT governance is considered to be the responsibility of the board and is said to form an important subset of an organisation’s corporate governance processes (Borth & Bradley, 2008). Boards need to govern IT as a result of the large capital investment in IT resources and high dependency on IT by organisations. Van Grembergen, De Haes and Guldentops (2004) and De Haes & Van Grembergen (2009) indicate that corporate governance matters are not able to be effectively discharged unless IT is being governed properly, and call for further specific research on the role of the board in ITG. Researchers also indicate that the link between corporate governance and IT governance has been neglected (Borth & Bradley, 2008; Musson & Jordan, 2005; Bhattacharjya & Chang, 2008). This thesis will address this gap in the ITG literature by providing the bridge between the ITG and corporate governance literatures. My thesis uses a critical realist epistemology and a mixed method approach to gather insights into my research question. In the first phase of my research I develop a survey instrument to assess whether boards consider the components of the ITG model in governing IT. The results of this first study indicated that directors do not conceptualise their role in governing IT using the elements of the ITG model. Thus, I moved to focus on whether prominent corporate governance theories might elucidate how boards govern IT. In the second phase of the research, I used a qualitative inductive case based study to assess whether agency, stewardship and resource dependence theories explain how boards govern IT in Australian universities. As the first in-depth study of university IT governance processes, my research contributes to the ITG research field by revealing that Australian university board governance of IT is characterized by a combination of agency theory and stewardship theory behaviours and processes. The study also identified strong links between a university’s IT structure and evidence of agency and stewardship theories. This link provides insight into the structures element of the emerging enterprise governance of IT framework (Van Grembergen, De Haes & Guldentops, 2004; De Haes & Van Grembergen, 2009; Van Grembergen & De Haes, 2009b; Ko & Fink, 2010). My research makes an important contribution to governance research by identifying a key link between corporate and ITG literatures and providing insight into board IT governance processes. The research conducted in my thesis should encourage future researchers to continue to explore the links between corporate and IT governance research.

To bound or not to bound: preliminary Theory of Time Bounds Specification in strategic alliances

This article augments Resource Dependence Theory with Real Options reasoning in order to explain time bounds specification in strategic alliances. Whereas prior work has found about a 50/50 split between alliances that are time bound and those that are open-ended, their substantive differences and antecedents are ill understood. To address this, we suggest that the two alliance modes present different real options trade-offs in adaptation to environmental uncertainty: ceteris paribus, time-bound alliances are likely to provide abandonment options over open-ended alliances, but require additional investments to extend the alliance when this turns out to be desirable after formation. Open-ended alliances are likely to provide growth options over open-ended alliances, but they demand additional effort to abandon the alliance if post-formation circumstances so desire. Therefore, we expect time bounds specification to be a function of environmental uncertainty: organizations in more uncertain environments will be relatively more likely to place time bounds on their strategic alliances. Longitudinal archival and survey data collected amongst 39 industry clusters provides empirical support for our claims, which contribute to the recent renaissance of resource dependence theory by specifying the conditions under which organizations choose different time windows in strategic partnering.

Built to last versus meant to end : time bounds specification in strategic alliances

This article explores an important temporal aspect of the design of strategic alliances by focusing on the issue of time bounds specification. Time bounds specification refers to a choice on behalf of prospective alliance partners at the time of alliance formation to either pre-specify the duration of an alliance to a specific time window, or to keep the alliance open-ended (Reuer & Ariňo, 2007). For instance, Das (2006) mentions the example of the alliance between Telemundo Network and Mexican Argos Comunicacion (MAC). Announced in October 2000, this alliance entailed a joint production of 1200 hours of comedy, news, drama, reality and novella programs (Das, 2006). Conditioned on the projected date of completing the 1200 hours of programs, Telemundo Network and MAC pre-specified the time bounds of the alliance ex ante. Such time-bound alliances are said to be particularly prevalent in project-based industries, like movie production, construction, telecommunications and pharmaceuticals (Schwab & Miner, 2008). In many other instances, however, firms may choose to keep their alliances open-ended, not specifying a specific time bound at the time of alliance formation. The choice between designing open-ended alliances that are “built to last”, versus time bound alliances that are “meant to end” is important. Seminal works like Axelrod (1984), Heide & Miner (1992), and Parkhe (1993) demonstrated that the choice to place temporal bounds on a collaborative venture has important implications. More specifically, collaborations that have explicit, short term time bounds (i.e. what is termed a shorter “shadow of the future”) are more likely to experience opportunism (Axelrod, 1984), are more likely to focus on the immediate present (Bakker, Boros, Kenis & Oerlemans, 2012), and are less likely to develop trust (Parkhe, 1993) than alliances for which time bounds are kept indeterminate. These factors, in turn, have been shown to have important implications for the performance of alliances (e.g. Kale, Singh & Perlmutter, 2000). Thus, there seems to be a strong incentive for organizations to form open-ended strategic alliances. And yet, Reuer & Ariňo (2007), one of few empirical studies that details the prevalence of time-bound and open-ended strategic alliances, found that about half (47%) of the alliances in their sample were time bound, the other half were open-ended. What conditions, then, determine this choice?

Board age and gender diversity : a test of competing linear and curvilinear predictions

The inconsistent findings of past board diversity research demand a test of competing linear and curvilinear diversity–performance predictions. This research focuses on board age and gender diversity, and presents a positive linear prediction based on resource dependence theory, a negative linear prediction based on social identity theory, and an inverted U-shaped curvilinear prediction based on the integration of resource dependence theory with social identity theory. The predictions were tested using archival data on 288 large organizations listed on the Australian Securities Exchange, with a 1-year time lag between diversity (age and gender) and performance (employee productivity and return on assets). The results indicate a positive linear relationship between gender diversity and employee productivity, a negative linear relationship between age diversity and return on assets, and an inverted U-shaped curvilinear relationship between age diversity and return on assets. The findings provide additional evidence on the business case for board gender diversity and refine the business case for board age diversity.

Towards Explaining the Use of Control Mechanisms in Foreign Subsidiaries of MNCs (summary section only)

Control is central to management and there is already a considerable body of research on control. However, the emergence and growth of multinational corporations (MNCs) has renewed the interest in control, as MNCs are complex (often large) organizations that face circumstances beyond those of national business organizations. The geographical dispersion of MNC activities means that the headquarters controls subsidiaries that differ with regard to power and that are embedded in different cultural, political, legal and educational systems. Foreign subsidiary control also takes place across language boundaries and physical (i.e. geographical) distances. In face of these challenges, how are foreign subsidiaries controlled? The thesis explores different types of control mechanisms and attempts to explain the degree to which they are used to control foreign subsidiaries. It contributes to existing knowledge on control by exploring how five different control mechanisms are related to each other. Previous research has tended to focus only on one or two control mechanisms and seldom has their effect on each other been explored. The thesis also contributes by including two central aspects of the MNC that have been neglected in much of the research on foreign subsidiary control: language competence of subsidiary staff and physical distance between the headquarters and its subsidiaries. The findings indicate that specific control mechanisms should not be studied in isolation as there are intricate relationships among the different control mechanisms. Language competence of the subsidiary staff can furthermore affect the type and degree of control that the headquarters can exercise over a subsidiary. The findings also indicate that changes in the physical distance between subsidiaries and its headquarters (i.e. a relocation of the headquarters as part of a restructuring process) can have great consequences for the headquarters-subsidiary relationship.

Basic Income Grant in Namibia, a Viewpoint on the Proposal and on the Work of the BIG Coalition

This thesis studies the basic income grant proposal in Namibia. The proposal suggests a monthly grant of N$100 (approximately 10€) to all those Namibian citizens who do not receive the state pension. This thesis concentrates on the Basic Income Grant (BIG) Coalition and on its work. The formation and transformation of the coalition during the time period between 2003 and 2009 is analyzed with the help of data collected during two field work periods in 2008 and 2009. The data includes interviews, newspaper articles, observations and other background material. The analysis of this material is mainly conducted from organizational viewpoint. The final part of the thesis applies the results to the theory of Mosse, whose propositions about policy and practice will be discussed in relation to the basic income grant pilot project. The thesis argues that social legitimacy has been a vital resource for the work of the BIG Coalition and it has sought for it in various ways. The concept of social legitimacy originates from the resource dependence perspective of Pfeffer and Salancik, who propose that organizations are dependent on their environments, and on the resources provided by the surrounding environment. This thesis studies the concept of social legitimacy in the context of resource dependence theory. Social legitimacy is analyzed in the relations between the coalition and its environment, in the formation of the coalition, in the responses towards criticism, and finally in relation to the propositions concerning policy and practice. The work of the coalition in the pilot project will be analyzed through the propositions of Mosse concerning policy and practice. The results will describe and analyze key events in the formation of the BIG Coalition from the South African proposal until the end of the basic income pilot project. This BIG pilot project conducted in 2008-2009 is one of the most well-known activities of the coalition. The clashes between the coalition and its environment will be analyzed through four case studies. It will be shown that the project has been conducted in order to gain more legitimacy to the basic income grant proposal. The conclusion questions the legitimacy of the BIG Coalition as a research and development organization, and requests for more transparent research on the basic income proposal in Namibia.

Les entreprises multinationales et les politiques publiques ; enquête sur leur engagement institutionnel au Canada

Cette thèse s’inscrit au cœur du chantier de réflexion sur l’interaction entre les États et les entreprises multinationales qui s’impose dans le contexte de l’accélération actuelle du processus de mondialisation de l’économie capitaliste. Nous l’abordons sous l’angle plus particulier des multinationales et de leur engagement institutionnel au sein des organisations, associations, forums ou réseaux qui contribuent à la définition et parfois même à la gestion des différentes politiques publiques orientées vers le développement économique, l’innovation et le marché du travail. Quelles sont les différentes facettes de l’engagement institutionnel des filiales de multinationales au Canada ? Comment ces comportements peuvent-ils être influencés par les différentes caractéristiques et stratégies de ces entreprises ? Un modèle théorique large, empruntant des hypothèses aux nombreuses approches théoriques s’intéressant aux comportements généraux des multinationales, est testé à l’aide d’analyses quantitatives de données obtenues dans le cadre d’une enquête auprès des multinationales au Canada associée au projet international INTREPID. D’abord, cette thèse permet une opérationnalisation plus précise du concept d’« imbrication de la firme » à travers la notion d’engagement institutionnel. Elle met en évidence les différentes dimensions de ce phénomène et remet en question la vision « essentiellement » positive qui l’entoure. Les résultats de cette thèse viennent questionner de la centralité des approches macro-institutionnalistes, particulièrement celle associée aux Variétés du capitalisme, dans les études sur les multinationales. Ils réaffirment par contre l’importance des différentes approches économiques et démontrent plus particulièrement la pertinence de la théorie de la dépendance aux ressources et l’impact de la présence d’un acteur structuré venant faire le contrepoids aux gestionnaires. Malgré nos efforts de théorisation, nous sommes incapable d’observer un effet modérateur des facteurs stratégiques sur l’impact du pays d’origine dans la détermination de l’engagement institutionnel. Cette thèse offre des indications permettant de cibler les interventions institutionnelles qui cherchent à « attacher » les multinationales à l’économie canadienne. Elle met aussi en évidence la contribution d’acteurs indirects dans la consolidation des relations d’engagement institutionnel et plus particulièrement le rôle positif que peuvent jouer les syndicats dans certains forums ou réseaux.

Higher Education Governance in Vietnam: University Action, the State and Changing Relationships

Diese Dissertation stellt eine Studie da, welche sich mit den Änderungen in der Governance der Hochschulbildung in Vietnam beschäftigt. Das zentrale Ziel dieser Forschungsarbeit ist die Untersuchung der Herkunft und Änderung in der Beziehung der Mächte zwischen dem vietnamesischen Staat und den Hochschulbildungsinstituten (HI), welche hauptsächlich aus der Interaktion dieser beiden Akteure resultiert. Die Macht dieser beiden Akteure wurde im sozialen Bereich konstruiert und ist hauptsächlich durch ihre Nützlichkeit und Beiträge für die Hochschulbildung bestimmt. Diese Arbeit beschäftigt sich dabei besonders mit dem Aspekt der Lehrqualität. Diese Studie nimmt dabei die Perspektive einer allgemeinen Governance ein, um die Beziehung zwischen Staat und HI zu erforschen. Zudem verwendet sie die „Resource Dependence Theory“ (RDT), um das Verhalten der HI in Bezug auf die sich verändernde Umgebung zu untersuchen, welche durch die Politik und eine abnehmende Finanzierung charakterisiert ist. Durch eine empirische Untersuchung der Regierungspolitik sowie der internen Steuerung und den Praktiken der vier führenden Universitäten kommt die Studie zu dem Schluss, dass unter Berücksichtigung des Drucks der Schaffung von Einkommen die vietnamesischen Universitäten sowohl Strategien als auch Taktiken entwickelt haben, um Ressourcenflüsse und Legitimität zu kontrollieren. Die Entscheidungs- und Zielfindung der Komitees, die aus einer Mehrheit von Akademikern bestehen, sind dabei mächtiger als die der Manager. Daher werden bei initiativen Handlungen der Universitäten größtenteils Akademiker mit einbezogen. Gestützt auf die sich entwickelnden Muster der Ressourcenbeiträge von Akademikern und Studierenden für die Hochschulbildung prognostiziert die Studie eine aufstrebende Governance Konfiguration, bei der die Dimensionen der akademischen Selbstverwaltung und des Wettbewerbsmarktes stärker werden und die Regulation des Staates rational zunimmt. Das derzeitige institutionelle Design und administrative System des Landes, die spezifische Gewichtung und die Koordinationsmechanismen, auch als sogenanntes effektives Aufsichtssystem zwischen den drei Schlüsselakteuren - der Staat, die HI/Akademiker und die Studierenden – bezeichnet, brauchen eine lange Zeit zur Detektion und Etablierung. In der aktuellen Phase der Suche nach einem solchen System sollte die Regierung Management-Tools stärken, wie zum Beispiel die Akkreditierung, belohnende und marktbasierte Instrumente und das Treffen informations-basierter Entscheidungen. Darüber hinaus ist es notwendig die Transparenz der Politik zu erhöhen und mehr Informationen offenzulegen.

Análisis geopolítico de las relaciones y tensiones político-militares entre Rusia y Georgia a raíz de su participación en el conflicto de independencia de Osetia del Sur entre 2004 y 2008

Desde la caída de la URSS el continente Euroasiático ha sufrido cambios importantes como una nueva configuración del Sistema Internacional que generó procesos políticos a través de la lucha de los Estados por alcanzar sus objetivos. La ubicación geográfica y los recursos resaltan la importancia de la zona y es por esto empiezan los conflictos entre los Estados por obtener un control y poder sobre estos territorios. Rusia afianzo su fuerza con la influencia que logró sobre los territorios que quedaron después de la disolución de la URSS en 1991 creando así una zona de protección y apoyo para sus intereses. Por su lado Georgia que había logrado finalmente su independencia total buscaba consolidar una estabilidad política, económica, social y cultural, elementos que se habían perdido un poco después de las invasiones y ocupaciones por otros poderes. En este contexto cae como una bomba la intención independentista de Abjasia y Osetia del Sur, territorios que siempre habían estado bajo mando de otros poderes y ahora querían libertad a través de la conformación de un Estado propio y una autonomía que les permitiera tener un gobierno y un aparato estatal que velara por sus intereses. Este trabajo se centrará en contestar a la siguiente pregunta ¿De qué manera la situación geopolítica de Osetia del Sur y Abjasia y las relaciones entre Rusia y Georgia influyeron en el conflicto generado a partir de la intención de independencia de los territorios de Abjasia y Osetia del Sur?

Caracterización de la competencia entre dos organizaciones del sector de seguros en Colombia

En la permanente búsqueda de mejores condiciones que las organizaciones realizan con el propósito de dar respuesta a los cambios del entorno y la complejidad de la interacción con las organizaciones del mismo sector, se encuentra necesario identificar las características que les permiten a estas, sobrevivir, mantenerse en el mercado o crecer en él. En este orden de ideas, en este documento se desarrolla la caracterización de la forma como dos organizaciones importantes y líderes del sector asegurador en Colombia: Seguros Bolívar y Suramericana de Seguros, compiten, desde el punto de vista comercial, con el propósito de identificar como esto influye en cada organización. La investigación se centró en explicar a partir de los autores revisados y analizados con respecto al concepto de la competencia, en particular, la forma como se enfrenta la organización al entorno tanto interno como externo, la influencia de cada organización según su estructura, su importancia, la disponibilidad de los recursos necesarios para desarrollar sus actividades, el impacto y las implicaciones organizacionales a partir de la forma cómo se enfrenta el entorno. Para lo anterior y con base a la revisión conceptual, se realizó la recolección de datos y cifras tanto de las organizaciones como del sector al cual pertenecen, adicionalmente se realizaron entrevistas tanto estructuradas como semi estructuradas al área de ventas, debido a que es el área de las organizaciones encargada de generar estrategias de ventas, posicionar productos en el mercado, identificar el perfil del consumidor, conocer y comprender el mercado y la competencia. Lo anterior con el fin de caracterizar a las organizaciones analizadas, determinando cómo responden a la competencia y al entorno, para finalmente establecer cuáles son los comportamientos recurrentes, similares y diferentes entre ellas. Por lo tanto, los resultados obtenidos en la investigación permiten establecer si dos empresas con estructuras, tamaño y participación en el mercado similares compiten de igual forma y que implicación tiene esto en el comportamiento organizacional.

The determinants and effects of board nomination committees

This article assesses the corporate governance-related antecedents of nomination committee adoption, and the impact of nomination committees’ existence and their composition on board independence and board demographic diversity. We conducted a longitudinal study of board composition amongst 210 Swiss public companies from January 2001 through December 2003, a period during which the Swiss (Stock) Exchange (SWX) introduced new corporate governance-related disclosure guidelines. We find firms with nomination committees are more likely to have a higher number of independent and foreign directors, but not more likely to have a higher number of female board members. Further, the existence of nomination committees is associated with a higher degree of nationality diversity but is not related to board educational diversity. We also find that nomination committee composition matters in the nomination of independent and foreign, but not of female directors. Our results suggest that understanding different board roles and composition require a multi-theoretical approach, and that agency theory, resource-dependence theory and group effectiveness theory help to explain different aspects of board composition and effectiveness. Finally, the article discusses the concept of diversity and appropriate ways to study diversity in a boardroom context.