MANAGEMENT & ORGANIZATIONS
John L. & Helen Kellogg Professor of Management & Organizations
His research links organizational politics, cognition, and culture with the study of strategic processes, corporate governance, and organizational and institutional change. His varied research interests are brought together by a focus on explaining both the determinants of organizational and industry attention and its consequences for stability and change in organizations and institutions. Currently he is studying the determinants and consequences of attention through a variety of mechanisms including specialized vocabularies of organizing, decision making structures and processes, and the development and deployment of political capital by organizational executives. His research has been published in the Administrative Science Quarterly, American Journal of Sociology, Organization Science, Organization Studies, Research in Organizational Behavior, and Strategic Management Journal. In 2000, he won the W. Richard Scott Award for from the American Sociological Association for the Best Paper published in the area of Organizations, Occupations, and Work during the previous three years. He serves on the Editorial Boards of the Administrative Science Quarterly, Management Research, and Organization Science.
At the MBA level he teaches Power in Organizations. This innovative course brings together a political capital perspective on managerial power with a focus on how the value of polical capital is shaped by the organization's culture. For executives he teaches Political Capital, Managing Organizational Change, and Strategic Processes. His teaching philosophy is to provide students with frameworks that will foster critical thinking skills that will make them better managers and leaders in organizations. At the Ph.D. level he teaches a Seminar on Behavior in Organizational Systems.
Prior to becoming an academic, he served as Executive Director of the Governor's Economic Advisory Council in Puerto Rico from 1986-1990. A native of Mayaguez, Puerto Rico he lives in downtown Chicago.
Building on his research and organizational experience he provides consulting services, executive education, and expert testimony to Fortune 500 firms, law firms as well as to federal and state governments.
Political Economy/Design
Although corporate hierarchies are a dominant organizational form in U.S. industry, their effects on the survival of component business units remains relatively understudied. We examine the effects of market diversification and vertical integration at the business-unit level and industry diversification at the corporate level on business-unit survival in a sample of independent and subunit higher education publishing firms from 1958 to 1990. We find that market diversification at the business-unit level increases the exit rate for both independent and subunit businesses, while we find partial support for the hypothesis that industry diversification at the corporate level decreases the exit rate for subunit businesses. For independent and subunit businesses, exit rates are lower for business units with vertically integrated marketing and distribution than for those with contractual relationships. The effects of corporate hierarchies on the survival of business units are contingent on the specialization of information processing at both the business-unit and corporate-parent levels. The results suggest a view of corporate hierarchies as information-processing systems in which market specialization has long term benefits for firms in industries characterized by market intermediation.
This study advances a view of the firm as a political coalition by theorizing and testing hypotheses on how political settlements among board factions regarding board independence shapes insider participation on the board. We suggest that insider board participation is determined not only by the conflict among elites, but also by their ability to establish tacit agreement. The idea of settlement is important because it provides a window to understanding the processes of restrained partisanship and stability at the top of U.S. corporations. We contribute to the theoretical body of work on coalitions, boards and settlements by considering the role of three distinct coalitions -- CEOs, insiders and outsiders - and the effects of critical events, formal roles and informal power across on the creation and maintenance of board structural arrangements. We study an unexplored structural form and build on the nascent body of empirical work on settlements by offering a quantitative analysis boards characterized by a single inside director -- the CEO. We find that CEO succession, formal authority derived from insider board roles and informal power of both outsiders and insiders impact the settlements and the adoption of a CEO-only insider structure.
We develop a grounded theory to explain the evolution of vocabularies of corporate governance. We combine historical analysis of events and language use with interpretation of texts and quantitative content analysis of word co-occurrences. We find that the term corporate governance emerged in the 1970s as frame to explain contemporary corporate scandals. While the word has increased in usage and became institutionalized, its meaning has evolved, as other words that co-occur in the vocabulary have shifted both in response to subsequent environmental events and to framing processes. We propose an evolutionary theory of cultural adaptation as meanings evolve through (1) path-dependent conceptual blending (variation), differential adoption shaped by the cultural resonance of words (selection), and a more likely to persist due to institutionalized theorization (retention). Our evolutionary theory of cultural adaptation posits a recursive relationship between culture and the economy, where why cultures adopt to economic change, the “stickiness” of culture and path dependence results in its relative autonomy as an explanatory force in economic change.
Many organizations are made up of other organizations that have decided to act collectively as with research and development consortia, industrial alliances, trade associations, and formal political coalitions. These collective organizations can be characterized by their differing strategies: some are general in scope, while others specialize on a more narrow purpose. What explains the prevalence of generalism and specialism among collective organizations? We develop an ecological model in which collective organizations compete over member organizations. Assuming that an organization joins a collective when its objectives match that of the collective, our model predicts a generalism bias in the ecology of founding and growth among collective organizations. This outcome is predicted to be path dependent, however, emerging over time according to relatively minor differences in initial conditions. These predictions are supported in an analysis of founding and growth rates among US R&D consortia, and the model helps to account for the numbers, sizes, and strategic diversity of these consortia.
This paper follows an institutional theory of action in exploring the consequences of formal and informal rules on the chief executive officer (CEO) succession process. An analysis of the competing risks of insider versus outsider CEO succession in U.S. industrial corporations provides evidence that boards rely on both past precedents and formal internal labor markets for executive succession and the selection of insiders versus outsiders as CEOs. To exclude alternative explanations that view rules as epiphenomenal, I examine the moderating effects of performance, late CEO departures, the founder's power, and board structure on reliance on rules. The results show substantial inertia in the rules of CEO succession, consistent with an institutionalized action perspective. The findings suggest that rules both enable and constrain board decision making.
The authors develop a conceptual model of the circulation of corporate control--the instability in formal authority at the top of large corporations. According to their model, chief executive officer (CEO) selection is both a political contest for the top executive position and an ideological struggle among members of the firm's political coalition over defining the corporate agenda and strategy. The authors apply the model to analyze the selection of functional backgrounds of 275 new CEOs in large U.S. manufacturing firms from 1981 to 1992. Results show that the circulation of control adds to previous explanations based on strategic contingencies and institutional isomorphism. Furthermore, the authors find evidence of an ideological and political obsolescence of financial CEOs and a change in the strategic contingencies that previously favored finance and the financial conception of control. Results suggest that conceptions of control are best understood as styles, rather than institutions, as these conceptions are neither taken for granted nor isomorphic across industries or the manufacturing sector, but are subject to sectoral variation, contestation, and change.
The central argument is that firm behavior is the result of how firms channel and distribute the attention of their decision-makers. What decision-makers do depends on what issues and answers they focus their attention on. What issues and answers they focus on depends on the specific situation and on how the firm's rules, resources, and relationships distribute various issues, answers, and decision-makers into specific communications and procedures. The paper develops these theoretical principles into a model of firm behavior and presents its implications for explaining firm behavior and adaptation.
Presents a cross-level theory of how organizations enact and respond to economic adversity, and provides a theoretical reconciliation of theories of failure-induced change and threat-rigidity. Association between economic adversity and the allocation of attention; Review of theories of failure-induced change and threat-rigidity in organizations; Structure of organizational groups.
To explain patterns of political dynamics, this paper develops a model of the circulation of power and compares it with an alternative model, the institutionalization of power, in an event history analysis of CEO succession. The circulation of power emphasizes the internal contests for control and opposition to the CEO that emerge with increased executive tenure and under conditions of economic adversity. The study finds support for an increasing rate of CEO succession during the first decade of tenure, consistent with the model of circulation, followed by a slow decline afterward, consistent with institutionalization. The effects of economic adversity were found to trigger circulation when combined with long prior board tenure and large board size. Also, contrary to conventional views, under economic adversity, more inside board members increase CEO succession.
This study examines how the activation of power among board members influences decisions to adopt a structure with the CEO as the only inside director. Our theory proposes that power activation increases under threats of power loss for board coalitions, and within windows of opportunity for power gain. Using data from a sample of major U.S. corporations from 1980-2003, we apply the theory to show that size and power of coalitions of inside directors other than the CEO decrease the likelihood of a CEO-insider only structure, and that CEO succession, adoption of CEO-Chair duality, and performance-driven change provide decision opportunities that increase it. The findings suggest that insider coalitions can constrain the CEO’s power on the board, and that power activation better explains board decision making than a constant force model of power.
In this study, we examine how local search affects changes to corporate governance structures. The principle thesis is that in evaluating changes to board structure, boards are influenced by historical experience and search in the neighborhood of their current or recent expertise. We assert that structural changes have not only to do with institutional pressures, but also with minor deviations in routines that are part of sequence of adaptation. Specifically, we?re interested in changes to the board where the roles of Chairman and CEOs are separated. In our empirical analysis, we utilize a discrete-time multinomial logit regression to model three types of separation: 1) Relay change whereby the chief executive loses the CEO title but retains the title of Chairman; 2) Regime change, where the dual Chairman/CEO departs, the roles are split and the titles are given to two different individuals; and 3) ?Declarations of Independence? whereby the chief executive loses the Chairman title but retains the CEO title.
This paper applies culture as toolkit perspective (Swidler, 1986, 2000) to the study of CEO succession in large Japanese firms. Japanese CEO succession is full of irony. CEO succession happens when performance is good. CEO succession happens when performance is bad. CEOs follows tenure rule, or they retire early. All these things happen without vigilant boards, without active stock market, and without dominant stakeholders. These puzzling practices of CEO succession in Japan, however, have unique names. They are hanamichi (flower way), insekijinin (resigning to take responsibility), ninki (tenure rule), and wakagaeri (rejuvenation). Taking these specialized vocabularies as cultural repertoires for action for Japanese CEOs, we have identified the conditions where performance might have differential effects on CEO succession. We hypothesize that good performance will facilitate CEO succession during the tenure milestone period, especially when CEO is retiring as a chairman, while poor performance will lead to CEO succession in other times. We also examined rejuvenation rhetoric by studying the successor age. We hypothesized that poor performance will lower the successor age, while old age of retiring CEO and the earlier than expected CEO change will increase the successor age. We tested these hypotheses on CEO succession events of top 200 firms during the 1955-1995 period. We found that performance had differential effect for timing of CEO change, and also found interesting dynamics between performance and the age of retiring CEO that affected successor age. Our study illustrates the power of applying culture as toolkit perspective in understanding organizational decision making.
In this paper we develop a political capital theory that goes beyond exchange theory and resource dependence approaches to power. At the socio-behavioral level we identify three analytically distinct sources of power in social interactions: relative dependence, social status, and identification. We view political capital as the varied set of resources available to individuals in organizational settings to influence the actions and ideas of others, despite resistance. We develop a typology of sources of political capital: human, social, symbolic, reputational, economic, organizational, and cultural, and explore the social and behavioral mechanism by which these resources affect others. These social resources are subject to accumulation, leverage, depletion, and depreciation, as individual engage in social interactions in organizations. We examine how these various forms of political capital affect relative dependence, social status, and identification. Relying on both macro (Bourdieu) and micro (Lewin) field theory perspectives, we posit that the value of the sources of political capital is shaped by the cultural and economic processes in the organization and organizational field. Power at the level of social interactions is a result of the activation and deployment of the various sources of political capital in social interactions.
This study advances an attention-based view of corporate strategy and explores its implications for organizational design. We examine the governance of resource allocation in a multi-business organization through the firm’s network of decision-making and communication channels. Using both primary and secondary sources, we analyze the changes in the decision-making channels at General Electric (GE) over a 51-year period across four CEO regimes: Ralph J. Cordiner, Fred J. Borch, Reginald H. Jones and John F. Welch. We identify four distinct channel functions: reporting, staff, control and agenda management. Through our analysis, we find that strategy does not emerge from any unitary, bounded process but from the pattern that emerges from a network of tightly and loosely coupled channels operating simultaneously.
This course considers theory construction, with an effort at verification, drawing on empirical studies. The focus is on problems of internal organizational systems such as goals, structure, roles, power, authority, decision making communications and controls.
This course counts toward the following majors: Entrepreneurship & Innovation, Human Resource Management, Management & Organizations.
Power dynamics are fundamental to the effective exercise of leadership in organizations. This course develops your ability to create and use sources of power beyond formal authority, to formulate strategies and tactics of political and social influence, and to exercise skills that make you a more effective organizational leader. Readings, case materials, course assignments and a field action project focus on the challenge of sustainable political advantage in organizations - the rules of the game, basic power diagnostics, the management of strategic dependencies and persuasion processes, and working in entrepreneurial contexts. Throughout, the course raises issues of career dynamics in the context of the development of your leadership abilities.
Prerequisite: MORS-430.
Management of Organizational Change provides knowledge that will help students diagnose and implement organizational change.
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