Corporate linkages and organizational environment: A test of the resource dependence model

Two comnpeting mlodels of corporate boards are presented. Managenment control proposes that the board is a rubber stamp for management, and plays a minor role in strategic managemlent, while resolurce dependence asserts that the board is a tool used to manage environmnental uncertainty. A struictural model was developed to determine whether corporate boards respond to different types of environmental uncertainty, using data on 147 companies from nine induistry groups. It was found that boards tended to be smaller in a more uncertain environient, while having an increased nunmber of interlocks. This relationship was stronger in high -performing firms.

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