Skip to main content
Collapse Menu
Sebastian and Pitosh

Too Busy to Balance? Research Seminar by Pitosh Heyden and Sebastian Fourné

Please join us for the next Lazaridis Institute Research Seminar!

Where? Lazaridis Hall, Pollock Family Boardroom
When? Wednesday, 5 September, 1-3 pm
Who? Mariano (Pitosh) Heyden (Monash University; Lazaridis Visiting Professor) and Sebastian Fourné (Lazaridis School)

TOO BUSY TO BALANCE?
A LONGITUDINAL ANALYSIS OF BUSY DIRECTORS AND FIRM AMBIDEXTROUS ORIENTATION

Abstract:

We examine the relation between busy boards and ambidexterity –the integrative pursuit of exploratory and exploitative strategies. Boards are expected to play an active role in shaping the strategic orientation of firms. As such, an organization’s board is a source of competitive differentiation and there is increasing demand for capable and well-connected directors. Although studies have highlighted the benefits of the board’s connections to its external environment, we introduce a microfoundational boundary condition to their privileged access to outside information –director busyness.

Adopting a bounded rationality lens, we argue that busyness may pose particular challenges for boards in the crafting of ambidextrous strategies, which require paradoxical problem solving and high cognitive involvement of directors in strategy making. Further acknowledging the heterogeneity in types of directors on board, our longitudinal panel analysis of publicly listed UK firms provides evidence that busy non-executives have a negative influence on ambidextrous orientation of firms, whereas busy executive directors do not seem to exert an influence. Interestingly, busy female directors show an inverted U-shaped relation with ambidextrous orientation.

Our theorizing and findings highlight the need to manage the external workload of directors to ensure they can contribute to balancing the competing demands of exploration and exploitation. We discuss implications for understanding boards as a microfoundational antecedent of ambidexterity, tradeoffs of having high quality directors, and highlight practical implications of how to compose boards that balance the external workloads and internal effectiveness of different directors.
Unknown Spif - $key