A social stratification perspective on director turnover in family firms

Abstract

This dissertation advances a social stratification perspective to identify and examine the antecedents of director turnover in different subgroup backgrounds. While strategic leadership scholars have proposed multiple antecedents across different levels to explain the turnover of board directors, this has overlooked two critical issues. First, relatively little attention has been paid to the individual motivation to leave a focal board of members that belong to different subgroups. Directors of different subgroups within firms with divergent interests may leave for different motivational reasons, potentially suggesting different mechanisms and boundary conditions. Second, the literature has not fully examined how positions of power and status within a board affect director turnover in different subgroups. In this dissertation, in the context of family firms, I develop two sets of arguments in the two chapters. First, drawing upon system justification theory, I argue that power differences between family and non-family directors cause non-family directors to involve themselves in hierarchy legitimation in order to reduce epistemic uncertainty and to engage in outgroup favoritism, acquiring resources. Non-family directors are thus less likely to leave. In addition, the second chapter draws on status literature and examines status differentials in the corporate field between non-family and family directors, arguing that family and non-family directors leave a focal family board for different reasons. Family directors leave due to the cognitive dissonance caused by status inconsistency, indicating low status in the corporate field but high status in their own firms. In contrast, non-family directors leave a focal board because of their intention to prevent status leakage to family directors. Using boards of directors in family-owned publicly listed firms in China from 2003 to 2017, my hypotheses are tested. This dissertation contributes to multiple streams of literature, including the literature of strategic leadership, social stratification in firms, and family business. Key words: director turnover, power, status, subgroups, family firms

Date of Award	2021
Original language	English
Awarding Institution	The Hong Kong University of Science and Technology
Supervisor	Bilian Ni SULLIVAN (Supervisor)