Title: The effects of board competence on operational innovation: tests of universal, contingency and configurational models

Authors: Hsueh-Liang Wu, Cheng-Yu Lee

Addresses: Department of Business Administration, National Cheng Kung University, 1 Ta-Hsueh Road, Tainan 701, Taiwan, ROC. ' Department of Business Administration, National Cheng Kung University, 1 Ta-Hsueh Road, Tainan 701, Taiwan, ROC

Abstract: Although the nature and extent of agency conflicts have been extensively addressed in terms of their performance implications for firms, the impact of board effectiveness on firm risk-taking behaviour remains largely unexamined. This study uses managerial risk taking as a lens to examine the efficacy of board competence for operational innovation in a sample of 201 Taiwanese firms. Furthermore, it extends the governance–innovation relationship to the contingency and configurational perspectives and thereby shows how board competence, in concert with technological opportunity and/or a low-cost posture, codetermines the firm|s operational novelty. The results reinforce the critical role of board competence in operational innovation and suggest the governance conditions that give rise to more corporate risk preparedness.

Keywords: corporate governance; operational innovation; technological opportunity; low-cost strategy; board competence; risk taking; managerial risk; Taiwan.

DOI: 10.1504/IJTM.2007.013499

International Journal of Technology Management, 2007 Vol.39 No.3/4, pp.330 - 345

Available online: 02 May 2007 *

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