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A Multi-Theory Approach Of The Strategic Role Of Boards

Author

Listed:
  • BORDEAN Ovidiu-Niculae

    (Babeș-Bolyai University of Cluj-Napoca, Romania)

  • CRIȘAN Emil Lucian

    (Babeș-Bolyai University of Cluj-Napoca, Romania)

  • POP Zenovia Cristiana

    (Babeș-Bolyai University of Cluj-Napoca, Romania)

Abstract

Boards’ involvement in the decision process has been reported in different ways in accordance with corporate governance theories. Several scholars postulates that both resource dependence and stakeholder theory emphasize board involvement in decision management through boards’ service roles; the legalistic perspective describes boards’ involvement in decision control through the execution of control roles; whereas stewardship theory reflects boards’ involvement in both decision management and decision control through boards’ strategic roles. Other theoreticians split the way in which boards get involved in the decision process into two phases and make comments on the contractual approach associated with agency theory, managerial theory, legalistic theory, stakeholder theory within which boards are known for their limited involvement and on strategic approach linked to stewardship theory and resource dependency theory which recognize the strategic role of boards. Unlike board’s control task which is grounded in the agency theory, the strategic task of boards is believed to have a multi-theoretic basis. The paper makes a comparative analysis of different corporate governance theories that are linked to the strategic role of boards.

Suggested Citation

  • BORDEAN Ovidiu-Niculae & CRIȘAN Emil Lucian & POP Zenovia Cristiana, 2012. "A Multi-Theory Approach Of The Strategic Role Of Boards," Studies in Business and Economics, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 7(2), pages 43-51, August.
  • Handle: RePEc:blg:journl:v:7:y:2012:i:2:p:43-51
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    References listed on IDEAS

    as
    1. Gérard Charreaux, 2000. "Le conseil d'administration dans les théories de la gouvernance," Working Papers CREGO 001201, Université de Bourgogne - CREGO EA7317 Centre de recherches en gestion des organisations, revised Dec 2000.
    2. Violina P. Rindova, 1999. "What Corporate Boards have to do with Strategy: A Cognitive Perspective," Journal of Management Studies, Wiley Blackwell, vol. 36(7), pages 953-975, December.
    3. Winfried Ruigrok & Simon I. Peck & Hansueli Keller, 2006. "Board Characteristics and Involvement in Strategic Decision Making: Evidence from Swiss Companies," Journal of Management Studies, Wiley Blackwell, vol. 43(5), pages 1201-1226, July.
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    6. Davide Ravasi & Alessandro Zattoni, 2006. "Exploring the Political Side of Board Involvement in Strategy: A Study of Mixed-Ownership Institutions," Journal of Management Studies, Wiley Blackwell, vol. 43(8), pages 1671-1702, December.
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    8. Melinda Muth & Lex Donaldson, 1998. "Stewardship Theory and Board Structure: a contingency approach," Corporate Governance: An International Review, Wiley Blackwell, vol. 6(1), pages 5-28, January.
    9. Pugliese, A. & Bezemer, P.J. & Zattoni, A. & Huse, M. & van den Bosch, F.A.J. & Volberda, H.W., 2009. "Boards of Directors’ Contribution to Strategy: A Literature Review and Research Agenda," ERIM Report Series Research in Management ERS-2009-013-STR, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    10. Humphry Hung, 1998. "A typology of the theories of the roles of governing boards," Corporate Governance: An International Review, Wiley Blackwell, vol. 6(2), pages 101-111, April.
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