EFFECTS OF TOP MANAGEMENT TEAMS’ EXTERNAL TIES AND BOARD COMPOSITION ON THE STRATEGIC CHOICE IN LATE MOVERS

The purpose of this study is to examine how top management team’s external ties and board composition interactively influence the strategic choices of late movers. Using multiyear sample of late-mover firms from the computer industry, the study finds that top managers participating in trade associations tend to adopt a resource-imitation strategy whereas top managers imported from outside industry and/or participating in professional associations tend to adopt a resource substitution strategy. However, the tendency of top managers imported from outside industry is changed to adopt a resource-imitation strategy when they work with outsider-rich board. The outsider-rich board also changes the tendency of top managers imported from inside industry to adopt a resource-substitution strategy. These findings imply that, while top managers’ boundary spanning activities and consequent external ties directly influence the strategic choices of late mover firms, those effects can be modified by the boards.