Board Effectiveness, Entrepreneurial Orientation and Corporate Culture: Evidence from an Emerging Economy

Abstract

There is a dearth and mixed empirical evidence regarding the relationship between corporate board effectiveness and entrepreneurial orientation in a large-scale organizational setting. The purpose of this paper is to address this deficiency by investigating the link between board effectiveness and entrepreneurial orientation including the possible moderators that influence such a connection in an emerging country context. A quantitative survey was conducted representing the top 100 listed non-financial companies in Sri Lanka. Correlation and hierarchical regression analysis were employed in testing the hypotheses of the study. Study findings indicated that entrepreneurial orientation is significantly associated and predicted by board effectiveness in Sri Lankan context. The relationship between board effectiveness and firm innovative behavior is significantly moderated by the corporate cultural characteristics measured via competing value framework. The study is noteworthy due to, (1) the adoption of a multi-theoretic perspective to conceptualize board effectiveness, (2) an attempt to link resource-dependency theory and the resource-based view of entrepreneurship to understand the aforementioned link between board effectiveness and entrepreneurial orientation, (3) an attempt to understand the role of corporate culture to strengthen the aforementioned link. The study has a momentous value for theoretical advancement in corporate governance and entrepreneurship literature. The study findings provide a notable practical value for board members, senior decision-makers, and policymakers in emerging countries.