The Influence of Top Management Team's Corporate Governance Orientation on Strategic Renewal Trajectories: A Longitudinal Analysis of Royal Dutch Shell plc, 1907–2004

Abstract

Using the upper echelons perspective together with corporate governance and strategic renewal literature, this paper investigates how top managers' corporate governance orientation influences a firm's strategic renewal trajectories over time. Through both a qualitative analysis and a quantitative analysis , we investigate this under-researched question within the context of a large incumbent firm: Royal Dutch Shell plc. Our results indicate that top managers having an Anglo-Saxon corporate governance orientation are more likely to pursue exploitative and external-growth strategic renewal trajectories, while those having a Rhine corporate governance orientation are more likely to pursue exploratory and internal-growth strategic renewal trajectories. We also found a positive moderating effect of the proportion of shareholders from the Anglo-Saxon countries on exploitative and external-growth strategic renewal trajectories. Our findings indicate that top managers' corporate governance orientation can be an important antecedent of strategic renewal and of organizational ambidexterity, both of which influence corporate longevity.

Beyond path dependence: Explorative orientation, slack resources, and managerial intentionality to internationalize in SMEs

“…Nevertheless, in the context of SMEs, our study offers empirical support for the idea that a firm's explorative orientation affects and is shared by its organizational members, especially its managers. It also provides additional evidence for the strategic-choice perspective in which managers are viewed as able to shape the strategic choices of the firm and as responsible for path-creating trajectories (Kwee et al, 2011;Vergne & Durand, 2011). Our data do not offer support for Hypotheses 2 and 3, which relate to exploitative orientation.…”

Board Background Heterogeneity and Exploration‐Exploitation: The Role of the Institutionally Adopted Board Model

“…Several complementary macro explanations can also be found in related literature. The most intuitive explanation could be that the strong shareholder protection in one‐tier systems fosters a short‐term focus on financial performance indicators opposed to employee protection (Kwee et al ., ; Moerland, ; Weimer and Pape, ) and, therewith, emphasizes exploitative activities. In turn, two‐tier boards associated with the Rhineland model generally face less shareholder pressure (Bezemer et al ., ).…”

Strategic thinking and business innovation: Abduction as cognitive element of leaders’ strategizing

“…In fact the environment and the leader's role have reciprocal impacts on SC (McKinley, 2011;Kwee et al, 2011;Shi and Prescott, 2011), and their favorable balance achieves quality in strategy making (Gavetti, 2012;Jippes et al, 2013). We thus see two opposing truths in SC: the leaders' SC influences their reference environment, and at the same time is subject to it (Porac et al, 2011).…”

“…The cognitive factors affecting strategizing include: leaders' bounded rationality (Simon, 1957), their knowledge and experience (Shi and Prescott, 2011), their dominant logic (Kwee et al, 2011) and their attitude to seizing market opportunities (Poole and Van de Ven, 1989). In addition, social factors (Rouleau and Balogun, 2011;Pandza, 2011;SantosVijande et al, 2012) and resources limitations (Bradley et al, 2011;Combs et al, 2011) also affect strategizing.…”