Top executives and members of a corporation’s board of directors have different roles and responsibilities. Traditionally, executives have been responsible for determining the firm’s strategic direction and implementing strategies to achieve it, whereas the board of directors has been responsible for monitoring and controlling managerial decisions and actions. Some argue that boards should become more involved with the formulation of a firm’s strategies. How would the board’s increased involvement in the selection of strategies affect a firm’s strategic competitiveness?
What evidence would you offer to support their position
Boards play the crucial role of managing as well as controlling the major decisions for organizations (Belikov, 2019). They need to be part of the management team to ensure that there is effective long-term strategic planning. For instance, since the adoption of using digital services has become popular and preferred by consumers, the organization still has to deal with issues of cybersecurity. Therefore, if the board is part of formulating the firm’s strategies, there will be better input since the decisions will be made by experts and experienced leaders. Board involvement will increase the change or getting investors since it is aware of all the operations and how they are working to achieve the mission and vision. Besides, it will improve the business environment by implementing strategies that satisfy the consumer, motivate the employee to remain productive, and have objectives that are realistic and smart.
Change may only be rejected if it oppresses the employee or if it does not bring any fruitful results. When the board is part of the strategic planning, then there is the regular re-evaluation of strategies to ensure that the organization remains competitive. Since technology is growing fast, some organizations may have a hard time keeping up with the innovations (Rejeb, 2019). Members of the board may also have people who are experienced in traditional business strategies, and they may need the input of a young employee. It ensures that the board understands the benefits of including technology in their long terms strategies. For instance, they will understand the consumer needs by using artificial intelligence to evaluate data. It will prompt change that will ensure that consumer needs are met as the company is making its profits. Board involvement will ensure that relevant shareholders are active in strategic planning and ensure that financial engineering is prioritized since it helps the organization gain a competitive advantage (Whitler, 2020). Besides, it will ensure that there is due diligence to ensure that consumers are confident in the brand as they are making their purchases.
Belikov, I. (2019). Effective board of directors: A new approach. Journal of Corporate Finance, 13(1), 20-30.
Rejeb, W. B., Berraies, S., & Talbi, D. (2019). The contribution of board of directors’ roles to ambidextrous innovation. European Journal of Innovation Management.
Whitler, K. A., & Puto, C. P. (2020). The influence of the board of directors on outside-in strategy. Industrial Marketing Management, 90, 143-154.
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