Edward J. Zajac

Perceptual and Archival Measures of Miles and Snow's Strategic Types: A Comprehensive Assessment of Reliability and Validity

Despite the widespread research use of Miles and Snows typology of strategic orientations, there have been no systematic attempts to assess the reliability and validity of its various measures. The present work provides such an assessment using data collected at two points from over 400 organizations in the hospital industry. We examined dimensions of the typology using both perceptual self-typing and archival data from multiple sources. The results generally support predictions across a variety of measures. Implications for further testing and research are discussed.

The Diffusion of Ideas Over Contested Terrain: The (Non) Adoption of a Shareholder Value Orientation Among German Firms

This study offers a sociopolitical perspective on the international spread of corporate governance models. We unpack the heterogeneity of interests and preferences across and within types of shareholders and senior managers over time in an analysis of the adoption of a shareholder value orientation among contemporary German firms. Using extensive data on more than 100 of the largest publicly traded German companies from 1990 to 2000, we find that the influence of major shareholder groups (e.g., banks, industrial corporations, governments, and families) and senior manager types (differing educational backgrounds and ages) can be clearly observed only after redefining these key actors according to common interests and preferences. We also find evidence that German firms engage in decoupling by espousing but not implementing a shareholder value orientation but show that the presence of more powerful and more committed key actors reduces the likelihood of decoupling. We discuss the implications of our findings for research on symbolic management, the diffusion of corporate practices, and the debate over the convergence of national governance systems. *

The symbolic management of strategic change: Sensegiving via framing and decoupling

This study develops a symbolic management perspective on strategic change to predict and test the antecedents and consequences of how firms frame strategic change. Using data from a sample of contemporary German corporations, we find support for our predictions that firms (1) use specific framing language that fits better with their divergent stakeholder preferences, (2) use language that decouples espousal and actual implementation of strategic change, and (3) realize positive market responses to institutionally appropriate frames of change.

Director Reputation, CEO-Board Power, and the Dynamics of Board Interlocks

Both authors contributed equally to the paper. We are grateful to Jerry Davis, Ranjay Gulati, Paul Hirsch, Willie Ocasio. Toby Stuart, Brian Uzzi, and seminar participants at Carnegie Mellon University, the Harvard Business School, and UCLA for comments and suggestions on earlier versions of this paper. The paper has also benefited from the helpful comments of Mark Mizruchi and the anonymous reviewers for ASO, as well as the editorial assistance of Linda Johanson. This study advances research on CEO-board relationships, interlocking directorates, and director reputation by examining how contests for intraorganizational power can affect interorganizational ties. We propose that powerful top managers seek to maintain their control by selecting and retaining board members with experience on other, passive boards and excluding individuals with experience on more active boards. We also propose that powerful boards similarly seek to maintain their control by favoring directors with a reputation for more actively monitoring management and avoiding directors with experience on passive boards. Hypotheses are tested longitudinally using CEO-board data taken from 491 of the largest U.S. corporations over a recent seven-year period. The findings suggest that variation in CEO-board power relationships across organizations has contributed to a segmentation of the corporate director network. We discuss how our perspective can reconcile contrary views and debates on whether increased board control has diffused across large U.S. corporations.*

Who Shall Succeed? How CEO/Board Preferences and Power Affect the Choice of New CEOs

This study shows how social psychological and sociopolitical factors can create divergence in the preferences of an incumbent CEO and existing board regarding the desired characteristics of a new CEO, and how relative CEO/board power can predict whose preferences are realized. Using extensive longitudinal data, we found that more powerful boards are more likely to change CEO characteristics in the direction of their own demographic profile. Outside successors are also typically demographically different from their CEO predecessors but demographically similar to the boards.

Status Evolution and Competition: Theory and Evidence

In this study, we (1) clarify and distinguish the concept of status, (2) identify and analyze the institutional and organizational factors that can lead to differences in organizational status over...

The Social Construction of Market Value: Institutionalization and Learning Perspectives on Stock Market Reactions

This study advances a social constructionist view of financial market behavior. The paper suggests that the markets reaction to particular corporate practices, such as stock repurchase plans, are not, as financial economists contend, simply a function of the inherent efficiency of such practices. Rather, stock market reactions are also influenced by the prevailing institutional logic and the degree of institutionalization of the practice. The theory first predicts that the emergence of the agency perspective on corporate governance in the mid-1980s represented a powerful new institutional logic that would lead the market to reverse its prior aggregate reaction to stock repurchase plans in the United States. The paper then considers the potential for institutional decoupling of repurchase plans and develops competing hypotheses about how the market value of these policies might have changed as more firms formally adopted, but did not implement, the plans over time. In contrast to a financial economic perspective on market valuation, which suggests that markets should discount the value of a policy as evidence of non-implementation accumulates, this study posits that institutionalization processes might increase the market value of a policy as more firms adopt it, despite growing evidence of decoupling. Implications for institutional theory and theoretical perspectives on capital markets are discussed.

New Directions in Corporate Governance Research

In this essay, we seek to identify the contributions that strategy and organizational researchers have made, and continue to make, in enhancing our understanding of a wide variety of important corporate governance questions. We begin by discussing how these research contributions stem from a willingness to draw from and contribute to different streams of intellectual thought, and we provide an orienting framework to situate this work.

Interlocking Directorates as An Interorganizational Strategy: A Test of Critical Assumptions

The article presents a study which identified some critical assumptions underlying the view that interlocking directorates are vehicles for interorganizational coordination or control. A discussion...

A Behavioral Theory of Corporate Governance: Explicating the Mechanisms of Socially Situated and Socially Constituted Agency

We propose a behavioral theory of corporate governance based on an ontological foundation of socially situated and socially constituted agency. More specifically, we advance a multi-level, mechanism-based, theory of governance that is socially informed yet actor-centric, and thus offers a distinct alternative to under-socialized governance theories, such as agency theory. We highlight the contributions of recent governance research in providing the foundation for such a behavioral theory, with particular emphasis on our prior work that demonstrated the relevance of social structural relationships, institutional processes, and social cognition. We conclude with a discussion of the central themes that emerge from our perspective.