IDEAS home Printed from https://ideas.repec.org/a/inm/ororsc/v22y2011i3p688-703.html
   My bibliography  Save this article

More Than Adopters: Competing Influences in the Interlocking Directorate

Author

Listed:
  • Brian L. Connelly

    (Auburn University, Auburn, Alabama 36849)

  • Jonathan L. Johnson

    (Sam M. Walton College of Business, University of Arkansas, Fayetteville, Arkansas 72701)

  • Laszlo Tihanyi

    (Mays Business School, Texas A&M University, College Station, Texas 77843)

  • Alan E. Ellstrand

    (Sam M. Walton College of Business, University of Arkansas, Fayetteville, Arkansas 72701)

Abstract

This study explores the competing influences of different types of board interlocks on diffusion of a strategic initiative among a population of firms. We examine a broad social network of interlocking directors in U.S. firms over a period of 17 years and consider the likelihood that these firms will adopt a strategy of expansion into China. Results show that ties to adopters that unsuccessfully implement this strategy have a nearly equal and opposing effect on the likelihood of adoption as do ties to those that successfully implement the strategy. Ties to those that do not implement the strategy also have a suppressive effect on the likelihood of adoption. Furthermore, we examine a firm's position in the core-periphery structure of the interlocking directorate, finding that ties to adopters closer to the network core positively affect the likelihood of adoption. We discuss the implications of our study for social network analysis, governance, and internationalization research.

Suggested Citation

  • Brian L. Connelly & Jonathan L. Johnson & Laszlo Tihanyi & Alan E. Ellstrand, 2011. "More Than Adopters: Competing Influences in the Interlocking Directorate," Organization Science, INFORMS, vol. 22(3), pages 688-703, June.
    • Handle: RePEc:inm:ororsc:v:22:y:2011:i:3:p:688-703
    DOI: 10.1287/orsc.1100.0555
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1287/orsc.1100.0555
    Download Restriction: no
    File URL: https://libkey.io/10.1287/orsc.1100.0555?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Cowan, Robin & Jonard, Nicolas, 2004. "Network structure and the diffusion of knowledge," Journal of Economic Dynamics and Control, Elsevier, vol. 28(8), pages 1557-1575, June.
    2. Lilach Nachum & Srilata Zaheer, 2005. "The persistence of distance? The impact of technology on MNE motivations for foreign investment," Strategic Management Journal, Wiley Blackwell, vol. 26(8), pages 747-767, August.
    3. World Bank, 2006. "World Development Indicators 2006," World Bank Publications - Books, The World Bank Group, number 8151, August.
    4. Eric Abrahamson & Lori Rosenkopf, 1997. "Social Network Effects on the Extent of Innovation Diffusion: A Computer Simulation," Organization Science, INFORMS, vol. 8(3), pages 289-309, June.
    5. Stephen P. Borgatti & Rob Cross, 2003. "A Relational View of Information Seeking and Learning in Social Networks," Management Science, INFORMS, vol. 49(4), pages 432-445, April.
    6. Li, Shaomin & Park, Seung Ho, 2006. "Determinants of Locations of Foreign Direct Investment in China," Management and Organization Review, Cambridge University Press, vol. 2(1), pages 95-119, March.
    7. Marta A. Geletkanycz & Brian K. Boyd & Sydney Finkelstein, 2001. "The strategic value of CEO external directorate networks: implications for CEO compensation," Strategic Management Journal, Wiley Blackwell, vol. 22(9), pages 889-898, September.
    8. Michael A. Hitt & David Ahlstrom & M. Tina Dacin & Edward Levitas & Lilia Svobodina, 2004. "The Institutional Effects on Strategic Alliance Partner Selection in Transition Economies: China vs. Russia," Organization Science, INFORMS, vol. 15(2), pages 173-185, April.
    9. Christine M. Beckman & Pamela R. Haunschild & Damon J. Phillips, 2004. "Friends or Strangers? Firm-Specific Uncertainty, Market Uncertainty, and Network Partner Selection," Organization Science, INFORMS, vol. 15(3), pages 259-275, June.
    10. Marvin Washington & Marc J. Ventresca, 2004. "How Organizations Change: The Role of Institutional Support Mechanisms in the Incorporation of Higher Education Visibility Strategies, 1874–1995," Organization Science, INFORMS, vol. 15(1), pages 82-97, February.
    11. Henrich R. Greve, 2009. "Bigger and safer: the diffusion of competitive advantage," Strategic Management Journal, Wiley Blackwell, vol. 30(1), pages 1-23, January.
    12. Anne S. Tsui & Claudia Bird Schoonhoven & Marshall W. Meyer & Chung-Ming Lau & George T. Milkovich, 2004. "Organization and Management in the Midst of Societal Transformation: The People's Republic of China," Organization Science, INFORMS, vol. 15(2), pages 133-144, April.
    13. Gary J. Young & Martin P. Charns & Stephen M. Shortell, 2001. "Top manager and network effects on the adoption of innovative management practices: a study of TQM in a public hospital system," Strategic Management Journal, Wiley Blackwell, vol. 22(10), pages 935-951, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Lychakov, Nikita, 2018. "Government-made bank distress: Industrialisation policies and the Russian financial crisis of 1899-1902," QUCEH Working Paper Series 2018-11, Queen's University Belfast, Queen's University Centre for Economic History.
    2. Wei Shi & Brian L. Connelly & Wm. Gerard Sanders, 2016. "Buying bad behavior: Tournament incentives and securities class action lawsuits," Strategic Management Journal, Wiley Blackwell, vol. 37(7), pages 1354-1378, July.
    3. Khalil Jebran & Shihua Chen & Ruibin Zhang, 2022. "Board social capital and stock price crash risk," Review of Quantitative Finance and Accounting, Springer, vol. 58(2), pages 499-540, February.
    4. Abhinav Gupta & Adam J. Wowak & Warren Boeker, 2022. "Corporate directors as heterogeneous network pipes: How director political ideology affects the interorganizational diffusion of governance practices," Strategic Management Journal, Wiley Blackwell, vol. 43(8), pages 1469-1498, August.
    5. Serguei Saavedra & Luis J. Gilarranz & Rudolf P. Rohr & Michael Schnabel & Brian Uzzi & Jordi Bascompte, 2014. "Stock fluctuations are correlated and amplified across networks of interlocking directorates," Papers 1410.6646, arXiv.org.
    6. Han, Xiaomin & Goxe, François & Freeman, Susan, 2024. "Internationalization through social networks: A systematic review and future research agenda," International Business Review, Elsevier, vol. 33(4).
    7. Lai, Jung-Ho & Chen, Li-Yu & Song, Sangcheol, 2019. "How outside directors’ human and social capital create value for corporate international investments," Journal of World Business, Elsevier, vol. 54(2), pages 93-106.
    8. Henrich R. Greve & Marc-David L. Seidel, 2015. "The thin red line between success and failure: Path dependence in the diffusion of innovative production technologies," Strategic Management Journal, Wiley Blackwell, vol. 36(4), pages 475-496, April.
    9. Richard A. Bettis & Constance E. Helfat & J. Myles Shaver & Michael D. Howard & Michael C. Withers & Christina Matz Carnes & Amy J. Hillman, 2016. "Friends or strangers? It all depends on context: A replication and extension of Beckman, Haunschild, and Phillips (2004)," Strategic Management Journal, Wiley Blackwell, vol. 37(11), pages 2222-2234, November.
    10. Adams, Kweku & Attah-Boakye, Rexford & Yu, Honglan & Johansson, Jeaneth & Njoya, Eric Tchouamou, 2023. "Female board representation and coupled open innovation: Evidence from emerging market multinational enterprises," Technovation, Elsevier, vol. 124(C).
    11. Yi Zhao & Jegoo Lee, 2023. "How does board interlock network matter for sustainability? A social learning approach to corporate environmental performance," Business Strategy and the Environment, Wiley Blackwell, vol. 32(8), pages 5889-5908, December.
    12. Ilya Okhmatovskiy & Robert J. David, 2012. "Setting Your Own Standards: Internal Corporate Governance Codes as a Response to Institutional Pressure," Organization Science, INFORMS, vol. 23(1), pages 155-176, February.
    13. Emre Yildiz, H. & Morgulis-Yakushev, Sergey & Holm, Ulf & Eriksson, Mikael, 2022. "How do the source and context of experiential knowledge affect firms’ degree of internationalization?," Journal of Business Research, Elsevier, vol. 153(C), pages 378-391.
    14. Vibha Gaba & Ann Terlaak, 2013. "Decomposing Uncertainty and Its Effects on Imitation in Firm Exit Decisions," Organization Science, INFORMS, vol. 24(6), pages 1847-1869, December.
    15. Brian L. Connelly & Qiang (John) Li & Wei Shi & Kang‐Bok Lee, 2020. "CEO dismissal: Consequences for the strategic risk taking of competitor CEOs," Strategic Management Journal, Wiley Blackwell, vol. 41(11), pages 2092-2125, November.
    16. Richard A. Benton, 2017. "The Decline of Social Entrenchment: Social Network Cohesion and Board Responsiveness to Shareholder Activism," Organization Science, INFORMS, vol. 28(2), pages 262-282, April.
    17. Weizhang Sun & Xuan Li & Yanli Geng & Jinfeng Yang & Yifei Zhang, 2020. "Board interlocks and the diffusion of CSR reporting practices: The role of market development," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(3), pages 1333-1343, May.
    18. Niccolò Pisani & Javier Garcia‐Bernardo & Eelke Heemskerk, 2020. "Does it pay to be a multinational? A large‐sample, cross‐national replication assessing the multinationality–performance relationship," Strategic Management Journal, Wiley Blackwell, vol. 41(1), pages 152-172, January.
    19. H. Emre Yildiz & Sergey Morgulis-Yakushev & Ulf Holm & Mikael Eriksson, 2023. "A relational view on the performance effects of international diversification strategies," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 54(1), pages 203-217, February.
    20. Zhuo (June) Cheng & Arun Rai & Feng Tian & Sean Xin Xu, 2021. "Social Learning in Information Technology Investment: The Role of Board Interlocks," Management Science, INFORMS, vol. 67(1), pages 547-576, January.
    21. Rexford Attah-Boakye & Kweku Adams & Honglan Yu & Dafydd Mali & Hyoungjoo Lim, 2024. "Growing Old, but Paying Back: Understanding How Age Influences Corporate Social Innovation Depth and Breadth of Multinationals in Weak Institutional Contexts," Management International Review, Springer, vol. 64(3), pages 419-458, June.
    22. Hansin Bilgili & Jonathan L. Johnson & Tsvetomira V. Bilgili & Alan E. Ellstrand, 2022. "Research on social relationships and processes governing the behaviors of members of the corporate elite: a review and bibliometric analysis," Review of Managerial Science, Springer, vol. 16(8), pages 2285-2339, November.
    23. Claire E. F. Wright, 2022. "Above board? Interlocking directorates and corporate contagion in 1980s Australia," Australian Economic History Review, Economic History Society of Australia and New Zealand, vol. 62(3), pages 290-312, November.
    24. Shin, Donghoon & Seidle, Russell & Okhmatovskiy, Ilya, 2016. "Making the foreign familiar: The influence of top management team and board of directors characteristics on the adoption of foreign practices," Journal of World Business, Elsevier, vol. 51(6), pages 937-949.
    25. Daisuke Uchida, 2021. "The consequence of differences: How heterogeneity in practice adaptations affects the diffusion process," Asia Pacific Journal of Management, Springer, vol. 38(1), pages 209-230, March.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Yadong Luo & Huan Zhang & Juan Bu, 2019. "Developed country MNEs investing in developing economies: Progress and prospect," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 50(4), pages 633-667, June.
    2. Zhiang (John) Lin & James A. Kitts & Haibin Yang & J. Richard Harrison, 2008. "Elucidating strategic network dynamics through computational modeling," Computational and Mathematical Organization Theory, Springer, vol. 14(3), pages 175-208, September.
    3. Xue, Chaokai & Jiang, Ping & Dang, Xinghua, 2019. "The dynamics of network communities and venture capital performance: Evidence from China," Finance Research Letters, Elsevier, vol. 28(C), pages 6-10.
    4. Wen, Hong-xing & Wang, Chan & Nie, Pu-yan, 2021. "Acceleration of rural households’ conversion to cleaner cooking fuels: The importance and mechanisms of peer effects," Energy Policy, Elsevier, vol. 154(C).
    5. Hinz, Oliver & Schulze, Christian & Takac, Carsten, 2014. "New product adoption in social networks: Why direction matters," Journal of Business Research, Elsevier, vol. 67(1), pages 2836-2844.
    6. Vibha Gaba & Ann Terlaak, 2013. "Decomposing Uncertainty and Its Effects on Imitation in Firm Exit Decisions," Organization Science, INFORMS, vol. 24(6), pages 1847-1869, December.
    7. Galang, Roberto Martin N., 2014. "Divergent diffusion: Understanding the interaction between institutions, firms, networks and knowledge in the international adoption of technology," Journal of World Business, Elsevier, vol. 49(4), pages 512-521.
    8. Liu, Xiaohui & Gao, Lan & Lu, Jiangyong & Lioliou, Eleni, 2016. "Environmental risks, localization and the overseas subsidiary performance of MNEs from an emerging economy," Journal of World Business, Elsevier, vol. 51(3), pages 356-368.
    9. Josef Daňa & Francesco Caputo & Jaroslav Ráček, 2020. "Complex Network Analysis for Knowledge Management and Organizational Intelligence," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 11(2), pages 405-424, June.
    10. Jing Yang & Frank Tipton & Jiatao Li, 2011. "A review of foreign business management in China," Asia Pacific Journal of Management, Springer, vol. 28(3), pages 627-659, September.
    11. Ashish Arora & Michelle Gittelman & Sarah Kaplan & John Lynch & Will Mitchell & Nicolaj Siggelkow & Denisa Mindruta & Mahka Moeen & Rajshree Agarwal, 2016. "A two-sided matching approach for partner selection and assessing complementarities in partners' attributes in inter-firm alliances," Strategic Management Journal, Wiley Blackwell, vol. 37(1), pages 206-231, January.
    12. Ioannidis, Evangelos & Varsakelis, Nikos & Antoniou, Ioannis, 2018. "Experts in Knowledge Networks: Central Positioning and Intelligent Selections," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 509(C), pages 890-905.
    13. Zhiang (John) Lin & Haibin Yang & Irem Demirkan, 2007. "The Performance Consequences of Ambidexterity in Strategic Alliance Formations: Empirical Investigation and Computational Theorizing," Management Science, INFORMS, vol. 53(10), pages 1645-1658, October.
    14. Henri C. Dekker & Alexandra Van den Abbeele, 2010. "Organizational Learning and Interfirm Control: The Effects of Partner Search and Prior Exchange Experiences," Organization Science, INFORMS, vol. 21(6), pages 1233-1250, December.
    15. Lee Fleming & Charles King & Adam I. Juda, 2007. "Small Worlds and Regional Innovation," Organization Science, INFORMS, vol. 18(6), pages 938-954, December.
    16. Bulent Ozel, 2012. "Collaboration structure and knowledge diffusion in Turkish management academia," Scientometrics, Springer;Akadémiai Kiadó, vol. 93(1), pages 183-206, October.
    17. Julia Brennecke & Olaf N. Rank, 2017. "Tie heterogeneity in networks of interlocking directorates: a cost–benefit approach to firms’ tie choice," Business Research, Springer;German Academic Association for Business Research, vol. 10(1), pages 97-122, June.
    18. Giovanni Pegoretti & Francesco Rentocchini & Giuseppe Vittucci Marzetti, 2012. "An agent-based model of innovation diffusion: network structure and coexistence under different information regimes," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 7(2), pages 145-165, October.
    19. Tommy Pan Fang & Andy Wu & David R. Clough, 2021. "Platform diffusion at temporary gatherings: Social coordination and ecosystem emergence," Strategic Management Journal, Wiley Blackwell, vol. 42(2), pages 233-272, February.
    20. Justin Tan & Hongjuan Zhang & Liang Wang, 2015. "Network Closure or Structural Hole? The Conditioning Effects of Network–Level Social Capital on Innovation Performance," Entrepreneurship Theory and Practice, , vol. 39(5), pages 1189-1212, September.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inm:ororsc:v:22:y:2011:i:3:p:688-703. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Asher (email available below). General contact details of provider: https://edirc.repec.org/data/inforea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.