How To Bridge The Gap? Board Faultline, Behavioral Integration Mechanisms And Entrepreneurial Orientation

The global financial crisis occurred in 2008 has greatly impacted China's economy,and has exposed many problems which were concealedbecause of the demographic dividend and low labor cost.In such a tough environment,how to survive and/or sustain the development is considered as one of the critical questions facing Chinese enterprises.A range of success stories of entrepreneurial enterprises as well as the promulgation of many preferential policies by governments have shown that corporate entrepreneurship is a vital means for Chinese enterprises to get out of the trouble.As a result,we need to know antecedents that lead Chinese enterprises to engage in corporate entrepreneurship.Why do some firms have higher levels of entrepreneurial orientation(EO)while others have lower levels of EO? Put differently,why is there heterogeneity in the levels of entrepreneurial orientation among firms? These questions lead us to examine the antecedent ofentrepreneurial orientation.In prior research,the antecedents of EO were explored from several perspectives such as corporate governance,resource-based view and institutional theory.However,only a few researchers have focused on the key decision-makers of entrepreneurship-the board of directors or the top management team(TMT).The extant research regarding this subject mainly discusses the relationship between the TMTheterogeneity and entrepreneurial performance.Since the consequence of a single attribute dimension of TMT can only be examined at one timeby this research approach,the conclusionsare mixed.Giventhis gap in the literature,this study builds upon the concept of faultline and seeks to unveil the driving factors of EO from the upper echelon theory.Researchers have found that faultlines would influence a groups' performance by splitting it.Therefore,it is important to know how to mitigatethe negative impacts of group faultlines.In this study,we propose and substantiate that two behavioral integrationmechanisms(i.e.,the co-working experience of board members as well as the chairmen who have various functional backgrounds)counteract the negative effects of faultlines and moderate the relationship between board faultlinesand EO.Based on 625 firm-year observations from China's information transmission,software and information services industries from 2012 through 2015,this study tested the proposed hypotheses.Specifically,employing random-effect analyses,this study examined the relationship between board faultlines andEO,as well as the moderating roleof overlapping tenure within the board and chairman functional diversityon the link of board faultlines andEO.It comes to the results as follows:(1)board faultlines has a negative impact on EO;(2)both the overlapping tenure within the board and chairman functional diversity have positive moderating effects on the association of board faultlines and EO.Based on the above findings,this study proposes the following practical implications for enterprises that committed to raising entrepreneurial orientation:(1)Paying attention to the composition of the board of directors.When nominating of directors,we need not only to consider the candidates' ability,but also to concern about other characteristics.(2)To avoid frequent replacement of directors to maintain the stability of the board,enhancing the communications and interactions among board members.(3)To facilitate collaboration among subgroups of the board on entrepreneurial issues by appointing chairmen with multiple functional backgrounds.