Transnational board interlocks: The influence of degree of internationalization and psychic distance
Cross Cultural & Strategic Management
ISSN: 2059-5794
Article publication date: 6 June 2019
Issue publication date: 18 June 2019
Abstract
Purpose
While previous studies have focused on the role of directors in the formation of transnational interlocks, this paper argues that firm strategy can also influence the development of these relationships. The purpose of this paper is to shed light on the practice of transnational interlocks by extending board interlocks theory from the national to the transnational context, and exploring aspects that are unique to the transnational level.
Design/methodology/approach
Based on the experiences of four British firms, this paper develops a conceptual framework that integrates under-examined dimensions of this networking practice at the organizational level of analysis, specifically degree of internationalization (DOI) and psychic distance (PD).
Findings
The paper argues that firms will increasingly engage in transnational interlocks as internationalization intensifies, and that expansion into psychically distant countries may result in further engagement in these connections. Further, firms will tend to form transnational received interlocks at their early stages of internationalization, and transnational sent and neutral interlocks at later stages of this process. It identifies four categories of firms: locals, extenders, explorers and cosmopolitans.
Practical implications
Directors can contribute to their firms’ success by interlocking with firms located in key foreign markets. Firms should also welcome directors with transnational board appointments to secure knowledge and resources overseas.
Originality/value
The manuscript contributes to our understanding of transnational interlocks by examining the independent and joint influence of the firm’s DOI and PD on the formation of such relationships.
Keywords
Acknowledgements
This paper received financial support from the Asociación Mexicana de Cultura, A.C.
Citation
González, C. (2019), "Transnational board interlocks: The influence of degree of internationalization and psychic distance", Cross Cultural & Strategic Management, Vol. 26 No. 2, pp. 199-222. https://doi.org/10.1108/CCSM-10-2018-0154
Publisher
:Emerald Publishing Limited
Copyright © 2019, Emerald Publishing Limited