How does learning intent affect interlocking directorates dynamic?

Abstract

Purpose

Literature on board interlocks agrees that these inter‐organizational ties are effective channels to exchange information and share knowledge. However, studies that consider the nature and the amount of knowledge that firms exchange are still relatively absent. Filling this gap, this paper aims to identify four types of mechanisms that can be recognised as drivers of interlocks' creation. The first two types deal more strictly with the nature of the knowledge that directors sitting on the board of other firms possess. The other two respond to the willingness of firms to increase their exposure to different sources of knowledge.

Design/methodology/approach

Through a statistical analysis the authors study the relationship between the presence of board interlocks and the type of knowledge embedded in these inter‐organizational ties. To test the hypotheses the authors conduct a longitudinal analysis of the whole population of Italian listed firms covering the period from 1998 to 2006.

Findings

It is shown that interlocking directorates are mainly associated with an exchange of knowledge in the usual domains of the firm while they are rare in the case of new knowledge. That is, ties among firms of the same industry proliferate while interlocks with organizations of different sectors are infrequent. The only exceptions are links between manufacturing and financial firms driven by the need to share sensible information typical in a borrower‐lender relationship.

Originality/value

The paper introduces and tests a knowledge exchange perspective in analysing interlocking directorates. Differently from previous studies it argues that interlocks can be seen as means to link, through shared directors, different knowledge domains. Thus the paper contributes to the understanding of formation and deletion of these kinds of inter‐organizational ties.

Citation

Simoni, M. and Caiazza, R. (2012), "How does learning intent affect interlocking directorates dynamic?", The Learning Organization, Vol. 19 No. 5, pp. 388-399. https://doi.org/10.1108/09696471211239695