The Interaction Between Top Management Teams and Board of Directors in Dynamic Capabilities

Abstract

The board of directors plays an important role in influencing top management team’s decision-making. We explain how different roles of the board of directors affect dynamic capability deployment, and ultimately firm performance, by improving our understanding about dynamic managerial capabilities applied to the top management team. We identify the board of directors’ controlling and services roles as two main roles that influence the way a top management team’s dynamic managerial capabilities condition dynamic capability deployment. Specifically, we explain how certain roles of the board of directors can weaken or strengthen a top management team’s impact on dynamic capabilities deployment. In doing so, we advance current understanding of the dynamic capabilities framework through going beyond only accounting for the role of senior management in the deployment of dynamic capabilities to explicitly accounting for the role of board of directors.