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Corporate governance and strategic change in SMEs: The effect of ownership, board composition and top management teams
Jönköping University.
Jönköping University.
Jönköping University.
2007 (English)In: Small Business Economics, Vol. 29, no 3, 295-308 p.Article in journal (Refereed) Published
Abstract [en]

This paper investigates how governance mechanisms affect the ability of small- and medium-sized enterprises (SMEs) to introduce strategic change. Previous research typically assumes that governance mechanisms operate independently of each other. Building on agency theory and insights from the literature on small firm governance, we hypothesize that governance variables related to ownership, the board of directors and the top management team all affect strategic change and that it is important to examine the interaction effects of these governance mechanisms. Using a longitudinal sample of over 800 SMEs, our general logic and hypotheses are supported by the analyses. We find that closely held firms exhibit less strategic change than do SMEs relying on more widespread ownership structures. However, to some extent, closely held firms can overcome these weaknesses and achieve strategic change by utilizing outside directors on the board and/or extending the size of the top management teams. Implications for theory and management practice in SMEs are discussed.

Place, publisher, year, edition, pages
Springer New York LLC , 2007. Vol. 29, no 3, 295-308 p.
Keyword [en]
corporate governance, small- and mediumsized enterprises, strategic change, board of directors, top management team
National Category
Business Administration
Research subject
Bussiness and IT
Identifiers
URN: urn:nbn:se:hb:diva-7976DOI: 10.1007/s11187-006-9021-2Local ID: 2320/8868ISBN: 0921-898X OAI: oai:DiVA.org:hb-7976DiVA: diva2:888859
Available from: 2015-12-22 Created: 2015-12-22 Last updated: 2017-02-02Bibliographically approved

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CiteExportLink to record
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Citation style
  • apa
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