Research On The Relationship Between Inter-locking Directorate And Firm Performance: Based On The View Of Diversification Stratege

Since the reform and opening up three decades, the business networks have got rapid development at the background of great changes on market demand, technological paradigm and management concept. As the strategic decision makers' link across the organization boundary, interlocking directorate has been used in more and more enterprises and played a great role. But the national academic research on interlocking directorate is still in its infancy. Because of the narrow angle and method, the existing research results can't provide effective theoretical support on the development of interlocking directorate. Currently, foreign scholars are discussing much on interlocking directorate and corporate performance improvement, but there are many controversial conclusions, and the research angle and paradigm can not directly be used in the market environment under transformation economic conditions directly. Considering the practical background of interlocking directorate in China, we think that the research should have more progessed.Therefore, this study focused on the interlocking directorate and corporate performance, combined with learning theory and strategic contingency theory, introducing diversification strategy and the dynamic environment, to begin theoretical extension from the two dimensions of internal mechanism and external environmental constraint. Specific point of view, this article will focus on the following issues step by step:(1) Whether the interlocking directorates would impact the corporate performance? Which one plays a significant effect; (2) How does the interlocking directorate impact corporate performance? Is the indirect effect of step by step existed? (3) Whether the environmental dynamic would impact interlocking directorate to improve corporate performance? How to do?Based on the reviewing and summarizing of relevant documents, this study has constructed the integrated analytical framework of relationship between interlocking directorate and corporate performance under the diversification strategic perspective; analyze the internal mechanism and impact relationship among interlocking directorate, diversification strategy, dynamic environment and corporate performance systematically to establish the multi-level study system between interlocking directorate and corporate performance in "network-conduct-performance" framework.Through theoretical discussion and empirical analysis, this paper has got the following conclusions:(1) interlocking directorate has a positive effect on corporate performance from the two dimensions of network architecture and internal governance. The different network characteristics will change the target enterprises' ability to acquire resources from interlocking directorate, and internal governance structure will affect the efficiency of resource usage; (2) the diversification strategy plays an important intermediary role on interlocking directorate's effect of corporate performance; the board of directors can gain strategic analysis and decision-making ability by using strategic learning characteristics of interlocking directorate, to improve strategic policy efficiency; (3) interlocking directorates will impact corporate performance directly and indirectly; and it provides a dual power to corporate development by improving access ability on external resources and business strategic decision quality; (4) the dynamics of environment plays a positive regulatory role between interlocking directorate and corporate performance, the higher the dynamics, the positive impact of independent directorate's network size, network centrality, and interlocking independent directorate played on corporate performance more evident.The research conclusions above have deepened the understanding of connotation relationship between interlocking directorate and corporate performance, which makes this research has some exploration significance. Compared with other studies, innovation of this paper is reflected in the following four areas:(1) divide the interlocking directorate into interlocking directorate network and internal governance, analyze the nature process of interlocking directorate's effect on enterprise performance deeply, which has complement the existing studies; (2)The system constructed and verified two analytical models that are "interlocking directorate-firm performance" and "interlocking directorate-diversification strategy-firm performance'" It pointed that interlocking directorate has effect on firm performance by two influence path which are direct influence and indirect influence. The interlocking directorate mechanism of action of firm performance has been pointed out comprehensively and systematically. (3) The paper fully reveals that the difference of the effect mechanism of different features of interlocking directorates on firm performance under the regulation in dynamic environment. It provides important theoretical reference on how interlocking directorate can play a better role. (4) It explained the effect mechanism of interlocking directorates on diversification strategy and brought strategic study analysis framework from the angle of organizational connectivity and social capital to analyse the relationship between the top of management and diversification strategy, which expanded the research on diversified motivation theory.Of course, regardless of the author's academic ability, there are still several shortages. In the last past of this paper, the author point out the limitations of the paper and the issues that could be analysised in the future.