Strategic Decision-Making Processes as a Mediator of the Effect of Board Characteristics on Company Innovation: A Study of Publicly-Listed Firms in Greece

By Balta, Maria Elisavet; Woods, Adrian et al. | International Journal of Management, March 2013 | Go to article overview

Strategic Decision-Making Processes as a Mediator of the Effect of Board Characteristics on Company Innovation: A Study of Publicly-Listed Firms in Greece


Balta, Maria Elisavet, Woods, Adrian, Dickson, Keith, International Journal of Management


Based on the Upper Echelons Theory that suggests the demographic characteristics of executives are linked to organisational processes and outcomes, the paper proposes that strategic decision-making processes mediate the relationship between board members' demographic characteristics and corporate innovation relating to product, process and organization. Based on questionnaires completed by 101 CEOs of Greek listed firms, the findings confirm that reporting and formalization as decision processes mediate the effect of board characteristics on innovation. Sound financial and formal mechanisms encourage Greek executives to take risks and invest in product or service innovation. Findings show that the executives' educational level is positively associated with financial reporting and rule formalization activities due to the changes that have been occurred in the Greek education system over recent decades. Functional background is found to influence only financial reporting activities. Finally, the managerial implications of this study are discussed.

Introduction

Academic interest in how executives influence strategic decisions and organizational outcomes has always been high in strategic management literature. Previous studies have portrayed the upper echelons' characteristics as determinants of strategic choices and their outcomes on organizational performance (Hambrick, Cho and Chen, 1996; Hambrick and Mason, 1 984; Smith et al., 1 994). Based on the Upper Echelon Theory, the executives' background and experiences have also been examined for their specific effects on strategic decisions, namely content (e.g. Bantel and Jackson, 1989; Damanpour and Schneider, 2006) and context (e.g. Bantel, 1993; Papadakis and Barwise, 2002). Content decisions refer to decisions that executives make either to select a core business that offers a competitive advantage or to exploit new opportunities in the market place (Hitt and Tyler, 1 99 1). Content decisions are associated with portfolio management activities, diversification, mergers and acquisitions and innovation strategies. However, context decisions are described as a process during which executives determine appropriate actions and directions for the firm (Elbanna, 2006).

Building on the fact that, firstly, strategic decision-making processes remain something of a "black box 'within the innovation literature and, secondly, limited research that has been carried out on the mediating effect between executives' characteristics and strategic outcomes (Hambrick, 2007), this study empirically investigates whether the strategic decision-making processes of financial reporting and rule formalization influence the relationship between the executives' demographic characteristics and innovation. It provides academics and business practitioners with a clear understanding of the specific strategic decision-making processes that mediate the relationship between executives' attributes and innovation strategies.

The study contributes to the existing literature and research on strategic management in several novel ways. Firstly, it proposes an integrative framework of potential strategic determinants of innovation, incorporating decision-making processes and managerial characteristics. This is the first study to the best of our knowledge that theoretically and empirically examines strategic decision-making processes as a mediator between executives' characteristics and firms' innovation. Secondly, although previous studies in the field (Kimberly and Evanisko, 1981) have conceived innovation adoption either as a multi-phase process or as an outcome of dichotomous decision, in this study, the construct of innovation captures product, process and organizational innovation strategies. Finally, based on a sample of 101 questionnaires completed by Greek CEOs, the study aims to identify the key influences on innovation in Greek companies as a contribution to addressing Greece's relatively low levels of innovation. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Strategic Decision-Making Processes as a Mediator of the Effect of Board Characteristics on Company Innovation: A Study of Publicly-Listed Firms in Greece
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.