The Influence Of Professional Capability Of Board Of Directors On The Choices Of Corporate Growth Strateg

The global development of the liquid crystal display (LCD) panel industry overthe past15years has focused on strategic decisions from upper management andboards of directors based on scaled economies. This approach has placed Taiwan ina strong position against its international competitors. However, as the industrymatures, people have begun to question whether the original equipmentmanufacturer (OEM) business model’s golden rule of “production efficiency” is stilla productive strategy. Since2007, slowing global economic activity and multipleapplications of new products has impacted the industry, and therefore, shortened theLCD panel business cycle significantly, increasingly worsening the businessenvironment. The prior rules of OEM have turned into a stumbling block today, andthe strategies and decisions of Taiwan’s LCD panel enterprises are facing severechallenges in this deteriorating climate, which is why we are looking closer at theimpact of the professional capabilities of boards of directors and how this affectsbusiness growth.From the viewpoint of strategy and performance, boards of directors’ lack ofexpertise and management capabilities in implementing long-term business plansduring the process of strategic decision making is the major factor contributing todecreasing business competitiveness. The industry is now at a crossroad wherebusinesses must move forward in an environment considering both the governmentalmacroscopic restructuring of the industry and strategic renewal of each firm’smicroscopic self-adaption.This dissertation focuses on how to optimize both effective monitoring andsupport roles of the boards of directors, to achieve the ultimate goals of resourceprovision, coordination, integration, collective resolution, and strategic developmentthroughout the strategic decision making process.Following the schema of “professional competencies of the boards ofdirectors,”“mechanism and process of strategic choices of business growth,” and“enterprise competitive advantages,” we also adapted a statistical analysis methodcombined with multiple regression analysis. The value of this approach is todemonstrate how LCD panel firms in Taiwan accomplished continuous businesssuperiority under different boards of management models. This dissertation alsoexamines panel data from Taiwan’s LCD panel industry from2000to2011. This study has several main findings: First, this dissertation resumes from theempirical findings that the LCD panel contains both difficulty in technique andcapital barriers; therefore, firms inevitably recruit and enlist both inside and outsidedirectors with substantial but differentiated substantial to reinforce professionalcompetencies. The opportunities in this industry depend particularly on the capacityof technological innovation and breakthroughs. An actively involved professionalboard of directors playing a key role in such breakthroughs and innovations hasbecome an essential factor in understanding the dynamics of this sector.Second, strategic choices for business growth have a positive and significantimpact on performance. This is a replaceable variable that contributes to competitiveadvantages and indicates that enterprises can enhance innovation abilities throughinvestments, which eventually improves business performance and a given product’scompetitive advantage. By using M&A strategies, enterprises obtain resources andcapabilities that are in shortage; these help intensify long-term business performanceand competitiveness. Strategic synergies and complementary strengths can beachieved through an internal alliance strategy with the aid of enterprise selection andexecution, which also improves the overall upgrading and immigrating ofperformance and further provides the alliance network with a greater advantage. Thisstudy concludes that internal RD and business mergers are both long-term goals forenterprises, whereas strategic alliances are often short-term tactics. To attain thelong-term strategic objective, it is inescapable to fully implement the contents of theactivity system, including asset evaluation during business acquisition performance,the cultural impingement after interaction with external firms, and full-aspectintegration. This presumption accords with the argument by Pearce (1987) thatmanagerial capabilities on boards of directors’ governance generate affirmativecompetition corporate advantages.Third, this study verifies that the professional capability of the boardsengenders a significant positive moderation effect on business growth strategiesregarding the performance of the enterprises, with the premise that strategic choice ispositively correlated to performance. A given board of directors’ professionalcapacity considerably outweighs the strategic decision itself and causes an extensivecorrelation on business performance. Different types of boards should slow agrowth-market strategy vision in favor of a strategy supporting and guiding themanagement team toward the correct and adept decision circle. Furthermore, the board should supervise the execution to ensure its leading competitive position bydiscovering new resources from feedback from the external environment andmatching the theoretical framework and logic employed in this dissertation.This dissertation reflects the author’s practical experience in the Taiwan-basedLCD panel industry. In addition to continuing previous studies, it evaluates thecritical position of the board’s strategic decision making from the perspective of theprofessional competencies to achieve the long-term and continuous growth of thisturning point.Finally, this study shows that the next5to10years will be a game-changingperiod in Taiwan’s LCD panel industry. Because of innovations and “added value”orientation of the mainstream business model, the industry will need to separateitself from the declining OEM model.