Management and Marketing - Theses

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Subject: board of directors × Subject: innovation ×

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    Organizational innovation: the role of the board of directors in creating dynamic capability
    Hom, Conan Lee ( 2015)
    Major streams of research on non-executive directors ("NEDs") have focused on their relationship with management and their resource provision function. However, when emerging changes go beyond the knowledge and current resources of the organization, such as when the changes are novel to the organization or require innovative responses, organizational dynamic capability -- the ability to sense external threats and opportunities, develop strategies in response, and transform the organization to carry out the strategies -- can be important to the organization's survival. There has been little attention to the role of the NEDs in ensuring organizational dynamic capability, essential as it may be to the organization. This thesis presents a model which offers that dynamic capability oriented activity (activity which, on its face, may influence organization dynamic capability), performed by the NEDs as a group (the board) or by any of the NEDs, predicts organizational dynamic capability performance which in turn predicts overall organization performance. In a survey-based investigation of the first element of the model, this thesis makes several contributions: (1) It provides a way to directly measure board (the NED part) activity and, in doing so, it responds to several decades of academic requests to advance and open new avenues of research on corporate boards by opening up the boardroom black box through direct examination of director activities; (2) it operationalizes the dynamic capability concept empirically along the sensing, seizing, and transformation elements provided by Teece (2007) which to date has mostly been limited to a theoretical concept; (3) it empirically finds that NED activities may exceed their compliance related governance duties and that some of the primary predictors of NED dynamic capability oriented activities may be NED (group) perceptions of the importance of their duties to provide resources, prevent downside events, and create upside potential, and NED (group) perceptions of themselves and the organization; (4) it finds that the relation between the duties and the DC-activities may offer an explanation for ambiguous results of prior studies of agency theory and the board; and (5) it provides empirical support for some of the activities that resource dependence theory presumes to be taking place. Copyright 2016 Conan L. Hom.