Interlocking Directorate and Firm's Diversification Strategy: Perspective of Strategy Learning

This study examines the influence of the social network of board interlocks on diversification strategy acknowledgement and implement. The author suggests both organizational level and individual level of interlocking directorate have an effect on board strategy decision through affecting the effects of strategy learning, and the empirical analysis proves it. Results that network density, centrality and the status of CEO Interlocks are positive related with the relationship between diversification strategy at the outside firm and the focal firm, while proportion of interlocking outside director plays negative influence. Finally, some conclusions are drawn and a discussion of future directions is given.