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Boardroom Strategic Decision-Making Style: Understanding the Antecedents

Authors

  • Bernard C. Bailey,

  • Simon I. Peck


Address for correspondence: Bernard C. Bailey, Weatherhead School of Management, Case Western Reserve University, Cleveland, OH 44106, USA. Tel: 469-737-4033; Fax: 469-737-4405; E-mail: bcb34@case.edu

Abstract

Manuscript Type

Empirical

Research Issue

The purpose of this study is to develop an understanding of the antecedents that lead to boards embracing either procedural rationality or political behaviors as a particular style of strategic decision making.

Research Findings

Semi-structured interviews with 29 directors and officers of eight publicly-traded US companies were conducted. Of the eight boards analyzed, there were clear differences in the predominant style of decision making operationalized by each. More importantly, however, the variance between boards that tended towards procedural rationality versus political behaviors as the predominant style of strategic decision making was explained by three primary factors. These included: (1) shared mental models; (2) balanced power relationships between the board members and CEO, as well as amongst individual board members; and (3) board chair leadership skills. Our data allow us to identify important antecedents of these factors.

Theoretical Implications

We add to the work seeking to understand the processes associated with board level strategic decision making. We augment decision-making theories relating to procedural rationality and political behaviors with board-specific factors and their characteristics.

Practitioner Implications

We isolate a number of antecedents relating to the conduct of boards and the environment of board decision making. We also highlight the roles of the board chair and the CEO for creating a boardroom environment conducive to engaging in quality decision-making processes.

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