The Strategic Context of External Network Ties: Examining the Impact of Director Appointments on Board Involvement in Strategic Decision Making

Carpenter, Mason A.; Westphal, James D.

doi:10.5465/3069408

Cited by 386 publications

(462 citation statements)

References 82 publications

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“…Second, the network that board members create with further board seats on other companies' boards reduces this pay gap. This is in line with existing studies which argue that the network works as a learning platform (Hillman and Dalziel 2003;Shropshire 2010;Carpenter and Westphal 2001;Haunschild and Beckman 1998;Geletkanycz and Boyd 2011). The results indicate that the experience of other board positions might provide directors with the information they need to overcome their presumption of language barriers.…”

Section: Discussionsupporting

confidence: 79%

“…An alternative way to see the network is in a positive light of a learning platform and information channel (Hillman and Dalziel 2003;Carpenter and Westphal 2001;Lynall et al 2003;Harris and Shimizu 2004;Shropshire 2010). A higher assessment of language barriers with minority managers could be a product of stereotypes and lack of experience.…”

Section: Network Embeddedness Effects On Discriminationmentioning

confidence: 99%

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Beyond human capital explanations for the gender pay gap among executives: investigating board embeddedness effects on discrimination

Oehmichen

Sarry

Wolff

2014

Bus Res

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This paper examines the gender pay gap in top management teams and how it is affected by directors’ embeddedness. We can reconfirm the result of previous studies that differences in managerial compensation between women and men exist, even after controlling for company properties and human capital attributes. Drawing on the language theory of discrimination, we then question how the embeddedness of directors—the actual deciders on executive compensation levels—affects the pay gap: embeddedness causing homophilous behavior resulting in a higher pay gap or directors using their network as knowledge source and decreasing the pay gap. We find evidence that knowledge effects outweigh potential homophily effects.

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Section: Discussionsupporting

confidence: 79%

Section: Network Embeddedness Effects On Discriminationmentioning

confidence: 99%

Beyond human capital explanations for the gender pay gap among executives: investigating board embeddedness effects on discrimination

Oehmichen

Sarry

Wolff

2014

Bus Res

View full text Add to dashboard Cite

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“…For example, board networks allow organizations to gain access to strategic advice, counsel, and expertise (Baysinger & Hoskisson, 1990;Carpenter & Westphal, 2001;Westphal, 1999); create linkages to important stakeholders (Burt, 1980); and safeguard their reputation and legitimacy (Bazerman & Schoorman, 1983;Pfeffer & Salancik, 1978). In this manner, networks create a shared social environment (Weick & Roberts, 1993) where organizations convey the value of certain practices to others in the network (Hillman, Shropshire, & Cannella, 2007) regardless of whether or not the practices enhance or diminish social or environmental welfare (Kang, 2008;Pfarrer, Smith, Bartol, Khanin, & Zhang, 2008).…”

Section: Structural Elements: Board Networkmentioning

confidence: 99%

Exceptional boards: Environmental experience and positive deviance from institutional norms

2012

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SummaryThis paper explores the phenomenon of positive organizational deviance from institutional norms by establishing practices that protect or enhance the natural environment. Seeking to explain why some organizations practice positive environmental deviance while others do not, we locate our inquiry on the board of directors-the organizational body that interprets external issues and guides organizational response. We find a strong correlation between positive deviance and the past environmental experience of board directors and the centrality of the organization within field-level networks. Organizations located on the periphery of the network or whose boards possess a high level of environmental experience are more likely to deviate in positive ways. Our conclusions contribute to multiple literatures in behavioral and environmental governance, the role of filtering and enaction in the process of institutional conformity and change, and the mechanisms behind proactive environmental protection strategies within business.

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“…Researchers observed this behavioral pattern in studies on hiring (Fernandez & Weinberg, 1997;Williamson & Cable, 2003), financing (Shane & Cable, 2002), investing (Cohen, Frazzini, & Malloy, 2008) and strategic decision making (Geletkanycz & Hambrick, 1997;Carpenter & Westphal, 2001). Overall, these studies suggest that employees' use of their social capital benefits firm performance.…”

Section: Introductionmentioning

confidence: 83%

The Temptation of Social Ties: When Interpersonal Network Transactions Hurt Firm Performance

2012

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We introduce agency concerns to social capital theory and predict that managers can use individual social capital to reduce personal effort costs, which is not in the best interest of the firm. To test this prediction, we collect data on all 8,019 hiring decisions from general managers in the National Basketball Association between 1981 and 2011. We find that managers have a clear preference for hiring players through social ties. The probability that a manager hires players from an NBA franchise to which he is socially tied is 27.6% higher than for an untied franchise. To isolate the motivation for this behavior, we complement our data with information on the sporting performance of teams. In line with agency theory, we find that the hiring of players through social ties reduces team performance. The effect is large: on average, each social-tie player reduces team winning percentage by 5.4%. Overall, this paper documents first empirical evidence that decision makers' use of individual social capital can lead to reduced firm-level performance.

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The Strategic Context of External Network Ties: Examining the Impact of Director Appointments on Board Involvement in Strategic Decision Making

Cited by 386 publications

References 82 publications

Beyond human capital explanations for the gender pay gap among executives: investigating board embeddedness effects on discrimination

Beyond human capital explanations for the gender pay gap among executives: investigating board embeddedness effects on discrimination

Exceptional boards: Environmental experience and positive deviance from institutional norms

The Temptation of Social Ties: When Interpersonal Network Transactions Hurt Firm Performance

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