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| Research on the Impact of Board Status Faultline on Enterprise Strategic Change |
| CAO Xiaofang，ZHANG Yulin，LIU Xuexin，LYU Bo |
| 1. Beijing Wuzi University， Beijing， China；2. Yantai University， Yantai， Shandong， China；3. Capital University of Economics and Business， Beijing， China |
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Abstract Based on the faultline theory, subgroup theory and status hierarchy theory, we explored the impact of board status faultline on enterprise strategic change. Our study used the data of A-share listed companies in Shanghai and Shenzhen and found that the board status faultline has a positive effect on the company strategic change. Further research found that the board ability promotes the status identification among subgroups and enhances the positive influence of the board status faultline. Second, political embedding strengthens the status gap between subgroups, helps the formation of status hierarchy and the integration of internal resources, and enhances the positive impact of the board status faultline on strategic change. Third, combined with company’s external governance mechanism, compared with high marketization regions, the board status faultline has a more significant influence on the strategic change in low marketization regions. Fourth, compared with non-state-owned enterprises, the board status of state-owned enterprises has a more significant governance effect. Last, compared with the Southern China, the concept of status hierarchy in the Northern China is stronger, and the governance effect of board status faultline is more obvious.
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Received: 03 June 2021
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