New member in the boardroom and subsequent strategic change in the product-market scope of the firm

Abstract

Purpose The purpose of this paper is to explore the linkages between the appointment of a new management board member and the following strategic change (SC) in the product-market scope of the firm. Design/methodology/approach The study is based on the whole population of Estonian firms, in total 16,941 observations and the data are retrieved from Estonian Business Register. First, the authors focus on the association between the appointment of a new board member and the likelihood of different types of SC. Second, the authors focus on the association between the new board member’s previous export experience and export-related SC. Logistic regressions are applied for all models. Findings The results indicate that there is a significant association between the appointment of a new board member and the subsequent start of exports and also continuing it, entrance into a new industry and making an SC in more broad terms, though the significance levels vary across the composed models. No significant relationship was found with the entrance into the additional geographic market(s) for already exporting firms. There was also a significant association between the previous export experience of a new board member and the subsequent start of exporting. Originality/value The authors look at SC in the product-market domain holistically by applying the same data on both geographic and product portfolio expansion options. The authors also introduce the scale and stability contexts of SCs. These aspects are usually neglected from similar studies.