Gerald F. Davis

A Social Movement Perspective on Corporate Control

Volume: 39 Issue: 1 Start Page: 141 ISSN: 00018392 Subject Terms: Studies Shareholder relations Interest groups Corporate governance Corporate culture Shareholder relations Organizational structure Management Classification Codes: 9190: US 9130: Experimental/theoretical treatment 2500: Organizational behavior 2400: Public relations Geographic Names: US Abstract: A study argues that efficiency-oriented approaches to corporate governance and law are limited in their ability to explain the politics of corporate control and, in particular, the rise of shareholder activism. Politics, like other social action, is embedded in social structures that influence whether, when, and how collective action is accomplished by interest groups. A social movement framework is used to explain the changing capacities of shareholders and managers as members of classes to act on their interests in control at the firm, state, and federal level. This framework is illustrated by showing how activist shareholders increased their influence in corporate governance in the early 1990s.

Evolutionary dynamics of organizations

The book presents the latest research and theory about evolutionary change in organizations. It brings together the work of organizational theorists who have challenged the orthodox adaptation views that prevailed until the beginning of the 1980s. It emphasizes multiple levels of change - distinguishing change at the intraorganizational level, the organizational level, the population level, and the community level. The book is organized in a way that gives order and coherence to what has been a diverse and multidisciplinary field. (The book had its inception at a conference held at the Stern School of Business, New York University, January 1992.)

Social movements and organization theory

Part I. Creating a Common Framework: 1. Organizations and movements Doug McAdam and W. Richard Scott 2. Where do we stand? Common mechanisms in organizations and social movements research John L. Campbell Part II. Political and Mobilization Context: 3. Institutional variation in the evolution of social movements: competing logics and the spread of recycling advocacy groups Michael Lounsbury 4. Elite mobilizations for antitakeover legislation, 1982-1990 Timothy Vogus and Gerald F. Davis 5. Institutionalization as a contested, multilevel process: the case of rate regulation in American fire insurance Marc Schneiberg and Sarah A. Soule 6. From struggle to settlement: the crystallization of a field of lesbian/gay organizations in San Francisco, 1969-1973 Elizabeth Armstrong Part III. Social Movement Organizations: Form and Structure: 7. Persistence and change among federated social movement organizations John McCarthy 8. Globalization and transnational social movement organizations Jackie Smith Part IV. Movements Penetrating Organizations: 9. How do social movements penetrate organizations? Environmental impact and organizational response Mayer N. Zald, Calvin Morrill, and Hayagreeva Rao 10. Organizational change as an orchestrated social movement: recruitment to a corporate quality initiative David Strang and Dong-Il Jung 11. Subventing our stories of subversion Maureen A. Scully and W. E. Douglas Creed Part V. Conclusion: 12. Social change, social theory, and the convergence of movements and organizations Gerald F. Davis and Mayer N. Zald 12. Two kinds of stuff: the current encounter of social movements and organizations Elizabeth Clemens.

The Small World of the American Corporate Elite, 1982-2001

This paper examines the degree of stability in the structure of the corporate elite network in the US during the 1980s and 1990s. Several studies have documented that board-to-board ties serve as a mechanism for the diffusion of corporate practices, strategies, and structures; thus, the overall structure of the network can shape the nature and rate of aggregate corporate change. But upheavals in the nature of corporate governance and nearly complete turnover in the firms and directors at the core of the network since 1980 prompt a reassessment of the networks topography. We find that the aggregate connec tivity of the network is remarkably stable and appears to be an intrinsic property of the interlock network, resilient to major changes in corporate governance. After a brief review of elite studies in the US, we take advantage of the recent advances in the theoretical and methodological tools for analyzing network structures to examine the network properties of the directors and companies in 1982, 1990, and 1999. We use concepts from small-world analysis to explain our finding that the structure of the corporate elite is resilient to macro and micro changes affecting corporate governance.

Prospects for Organization Theory in the Early Twenty-First Century: Institutional Fields and Mechanisms

This paper argues that research in organization theory has seen a shift in orientation from paradigm-driven work to problem-driven work since the late 1980s. A number of paradigms for the study of organizations were elaborated during the mid-1970s, including transaction cost economics, resource dependence theory, organizational ecology, new institutional theory, and agency theory in financial economics. These approaches reflected the dominant trends of the large corporations of their time: increasing concentration, diversification, and bureaucratization. However, subsequent shifts in organizational boundaries, the increased use of alliances and network forms, and the expanding role of financial markets in shaping organizational decision making all make normal science driven by the internally derived questions from these paradigms less fruitful. Instead, we argue that problem-driven work that uses mechanism-based theorizing and research that takes the field rather than the organization as the unit of analysis are the most appropriate styles of organizational research under conditions of major economic change-such as our own era. This sort of work is best exemplified by various studies under the rubric of institutional theory in the past 15 years, which are reviewed here.

Fool's Gold: Social Proof in the Initiation and Abandonment of Coverage by Wall Street Analysts

This paper examines the dynamics of social influence in the choices of securities analysts to initiate and abandon coverage of firms listed on the NASDAQ national market. We show that social proof—using the actions of others to infer the value of a course of action—creates information cascades in which decision makers initiate coverage of a firm when peers have recently begun coverage. Analysts that initiate coverage of a firm in the wake of a cascade are particularly prone to overestimating the firms future profitability, however, and they are subsequently more likely than other analysts to abandon coverage of the firm. We thus find evidence for a cycle of imitation-driven choice followed by disappointment and abandonment. Our account suggests that institutionalization rooted in imitation is likely to be fragile.

Embeddedness, Social Identity and Mobility: Why Firms Leave the NASDAQ and Join the New York Stock Exchange

Organizations derive their social identity from membership in formal groups and strive to maintain a positive social identity. When their social identity is threatened and group boundaries are permeable, organizations defect to other groups. This paper suggests that organizations receive identity-discrepant cues when in-group members defect to an out-group, but how organizations respond to such cues hinges on their social affiliations to the in-group, out-group, and defectors. A study of organizations that migrated from the NASDAQ stock market to the New York Stock Exchange reveals that strong ties to in-group members (NASDAQ members) reduced the impact of identity-discrepant cues and diminished defections. Conversely, strong ties to out-group members (NYSE members) enhanced the impact of identity-discrepant cues and increased defection. Proximity to defectors increased cross-overs—organizations followed defectors to whom they had direct ties. Implications for the study of embeddedness are outlined.

The Money Center Cannot Hold: Commercial Banks in the U.S. System of Corporate Governance

This paper examines how the place of banks in the intercorporate network has changed as a result of their decreasing role as financial intermediaries in the U.S. economy. An analysis of comprehensive data on the boards of the fifty largest banks and their connections with the several hundred largest nonbank corporations from 1982 to 1994 shows that the centrality of banks has significantly declined as executives of major corporations, particularly those representing central firms, joined bank boards at a substantially lower rate. Declining centrality reflects a strategic choice on the part of the banks: as the returns available from lending to major corporations have declined, the largest banks have moved into other forms of business and reduced their recruiting of centrally located directors. We conclude with a discussion of the role of financial intermediation in shaping the social organization of the economy.

Resource Dependence Theory: Past and future

This chapter reviews the origins and primary arguments of resource dependence theory and traces its influence on the subsequent literatures in multiple social science and professional disciplines, contrasting it with Emersons power-dependence theory. Recent years have seen an upsurge in the theorys citations in the literature, which we attribute in part to Stanfords position of power in the network of academic exchange. We conclude with a review of some promising lines of recent research that extend and qualify resource dependence theorys insights, and outline potentially fruitful areas of future research.

Policy as Myth and Ceremony? The Global Spread of Stock Exchanges, 1980-2005

We examine the antecedents and consequences in developing countries of creating a national stock exchange, a core technology of financial globalization. We study local conditions and global institutional pressures in the rapid spread of exchanges since the 1980s and examine how conditions at the point of adoption affected exchanges’ subsequent vibrancy. Little prior research connects the process of diffusion with the operational performance of adopted policies. We find that international coercion was associated with more ceremonial adoption but that, contrary to expectations common in institutional research, contagion processes via peer groups and normative emulation of prestigious actors enhanced vibrancy.