管理学论文读后感

Impression after Reading the Paper- CEO outside Directorships and Firm Performance: Reconciliation of Agency and Embeddedness Views

CAI QIAOXUE(蔡巧学), 201120125912, School of Business Administration

Source of the Paper

This paper was found in a top journal- Academy of Management Journal, 2011, Vol.54, No.2, 335-352, written by the authors MARTA A. GELETKANYCZ, from Boston College and BRIAN K. BOYD, from Arizona State University.

Summary of the Content

This paper mainly focuses on the relationship between CEO outside board service and its contribution to firm performance. Based on theoretical and empirical research, the author put forward a reconciliation of agency and embeddedness views.

Ever since a long time ago, there is always a debate surrounding CEO outside board and its contribution to firm performance. Agency scholars argue that CEO outside directorships constitute a form of managerial opportunism that potentially detracts from internal responsibilities, while embeddedness scholars insisting on that directorship ties afford access to information and resources of important strategic utility.

Thus, the authors proposed and tested a model of more than 400 large firms on the purpose of studying the long-term performance of CEOs outside directorships in different contexts. At last, they draw the conclusion that in low growth, more competitive and less diversified firms, the CEOs outside directorships will give better long-term performance to the firms.

Hypothesis of the Paper

The authors put forward five hypothesizes in this paper, and they are

First, CEOs outside directorships are positively related to long-term firm performance, which is based on the embeddedness view.

Second, CEOs outside directorships are negatively related to long-term firm performance, which is based on the agency view.

Third, Industry growth moderates the relationship between CEO outside directorships and long-term firm performance in such a way that effects are more positive in low growth contexts. Four, Industry concentration moderates the relationship between CEO outside directorships and long-term firm performance in such a way that effects are more positive in contexts of low concentration.

Five, Diversification moderates the relationship between CEO outside directorships and long-term firm performance in such a way that effects are more positive in contexts of less diversification.

Validation of the Hypothesizes

To validate the hypothesis, the authors chose a four-indicator measure incorporating:

(1) The total number of outside directorships held by each CEO,

(2) A count of directorships with Fortune 1000 firms,

(3) The average net sales of outside firms on whose boards a CEO served, and finally

(4) The average profitability of the outside firms on whose board the CEO served in 1987.

The authors set seven variables as below: