The Effect Of Board Heterogeneity And Industry Environment On Strategic Change

In recent years the business environment of Chinese enterprises is becoming increasingly complex, strategic change has become the norm. In this context, on the basis of reflections on traditional research of the board of directors, we proposed the contemporary research of the board of directors should around how to construct the board of directors to make the company strategy more flexible. The proposition put the Board of Directors and Strategic Change Research on the same platform, which provided an opportunity for corporate governance, strategic management research to coincides-cross. This paper made the preliminary attempt in this direction. On the basis of top management team heterogeneity research, based on the resource dependence theory and strategic change theory, we developed a model which explored how board heterogeneity affects strategic change. We also recognize industry environment as a moderator of these relationships. Finally, we carried on the empirical test to the model.In the specific content, we first reviewed the prior literature and discussed domestic and overseas existing research, then explored the content of this paper, and analyzed how board heterogeneity and external environment affect strategic change in detail. Using financial data of A-share listed manufacturing companies from 2011 to 2013, we examined the four dimensions of board heterogeneity’s influence on the company’s strategic change, and analyzed the impact of external environment on the four dimensions of board heterogeneity’s effect on the company’s strategic change. The empirical study found that the relationship between directors’ term heterogeneity and strategic change was not significant; age, functional background, education heterogeneity and strategic change were significantly positive correlated; Resource abundance has a significant negative moderating effect on the relationship between age, education heterogeneity and strategic change; Complexity of industry has a significant positive moderating effect on the relationship between age, education heterogeneity and strategic change; The volatility of industry has a significant negative moderating effect on the relationship between age, education heterogeneity and strategic change; The moderating effect of industry volatility opposed to our hypothesis. Most of our hypotheses were supported by empirical test. The empirical conclusions of this study, on the one hand,help to make up for the inadequacy of the domestic scholars’ research on heterogeneity of board of directors; on the other hand, provide reference for the listed manufacturing companies in China to improve the level of corporate governance and corporate strategymanagement by optimizing the board’s heterogeneity.