Boarding the Sinking Boat: A Resource Dependence Model of Outside Director Appointment in Declining Firms
Time：July 7th (Thursday) 10:30 -12noon
Location: Zhifuxuan, National School of Development, Peking U.
Speaker: Han Jiang, Assistant Professor, Arizona University
It has been widely noted that upper-echelon administrators, such as executives and directors, will voluntarily or involuntarily exit from declining firms that encounter severe performance recession. However, little is known about the natural counterpart of the above phenomenon: Who will choose to join these declining firms as new upper-echelon administrators? Drawing on the perspective of resource dependence theory, we highlight the potential mechanisms of new outside director appointment of declining firms. We posit that director candidates with moderate levels of social and human capital endowments are most likely to join declining firms as new directors. Moreover, the effects of social and human capital tend to be distinctively affected by the focal declining firm’s organizational status. Historical evidence from 129 Chinese *ST firms largely support our predictions.
Han Jiang (姜翰, PhD, Arizona State University) is an assistant professor in strategy and organization theory in Department of Management and Organizations, Eller College of Management at The University of Arizona. His research mainly focuses on the social network and social capital of top executives and directors, as well we their implications for upper-echelon decision making and interfirm relationships. His research has been published on top management journals such as Strategic Management Journal and Journal of Management.