The Influence Of Interlocking Directorates On Innovation Strategy

With competition's globalization and increasingly volatile environment, the innovation of organizations increasingly become one of the key factors which determine the success of the organization. The ability of innovation for a company determines the effectiveness of technology investments, it is the basis of creating a new product or service. The size of the ability of the enterprise's innovation is largely depended on the extent of its innovation strategy. The resource for an enterprise itself is the foundation to improve the degree of innovation strategy. Making full use of resources and constantly update is the key to the effective implementation of the innovation strategy. With the evolution of social networks, competition among enterprises has intensified networking, enterprise interlocking directorates has become a universal phenomenon, and become an important way for enterprises to obtain external resources.This study investigated how interlocking directorate affects the company's innovation strategy. From two different types of industry point of view, traditional industries and high-tech industries, respectively, discussed the impact of the location for a company in the interlocking director network for the degree of innovation strategies. This study selected the A-share listed companies of Shanghai and Shenzhen as samples, focus on three issues:(1) The companies which have the relationship of interlocking directorate whether has similarities in the innovation strategic decision; (2) Based on the differences between sectors, respectively, this paper analyzes the degree of centrality, betweenness centrality and closeness centrality in the interlocking directorates network of the sample companies from traditional industry and high-tech industry, and their impact on the degree of innovation strategy based; (3) Compared with the sample companies from the traditional industry and high-tech industry,analyzing the differences on the relationship of network location and the degree of innovation strategy, in order to obtain more relevant conclusions.This study uses the methods of social network analysis, global spatial autocorrelation analysis and BP neural network, based on theoretical research and empirical analysis getting the following conclusions:(1) There is a weak positive correlation between the relationship of interlocking directors and innovation strategy, but it is not statistically significant; (2) For the traditional industry, the degree of centrality and betweenness of centrality have a positive impact on the degree of innovation, but closeness of centrality has a negative impact on the degree of innovation strategy; (3) For the high technology industry, the betweenness of centrality and closeness of centrality have a positive impact on the innovation strategy, but the degree of centrality has a negative impact on the degree of innovation strategy. Finally, according to the results of empirical analysis, this paper puts forward some countermeasures and suggestions on how to make good use of the relations of interlocking director network.