Networking Strategy of Boards: Correlates, Performance Effects, and Implications for Small and Medium-sized Enterprises

• Main Authors: GEORGE, Gerard, WOOD, D. Robley, KHAN, Raihan
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2001
• Subjects: Network strategy; SMEs boards; Business; Entrepreneurial and Small Business Operations; Strategic Management Policy
• Online Access: https://ink.library.smu.edu.sg/lkcsb_research/4637; https://ink.library.smu.edu.sg/context/lkcsb_research/article/5636/viewcontent/Networking_strategy_of_boards_SMEs_2001.pdf
• Institution: Singapore Management University

Development of linkages with the external environment, e.g. interlocks, is a mechanism to access scarce resources. Creating and maintaining these linkages may be an organizational capability that creates a competitive advantage for small and medium-sized enterprises (SMEs). A partial model of networking strategy is proposed, which includes measures of board composition, interlocks, entrepreneurial orientation and environmental hostility. Analysis of 70 community bank Chief Executive Officer (CEO) responses (58% response rate) lends support to the proposition that firms with a networking strategy performed better (higher return on assets (ROA) and higher return on expenditure (ROE)) than those firms that did not actively pursue the development of networks.