Labor unions’ decline since the 1980s has given corporate management a free hand to make massive, permanent layoffs.

Until the 1980s most large corporate layoffs meant the temporary suspension of employment, rather than the more permanent downsizing which we know today. In new research which examines nearly 700 layoff announcements over 16 years, Jiwook Jung examines what led to this change in corporate policy. He finds that the decline of industrial unions led what were once temporary layoffs, which were often followed by recall in better economic times, to become permanent. Though labor unions resisted this shift, their decline meant that firm managers were able to gain an upper hand in making decisions about layoffs

Agency Theory as Prophecy: How Boards, Analysts, and Fund Managers Perform Their Roles

In 1976, Michael Jensen and William Meckling published a paper reintroducing agency theory that explained how the modern corporation is structured to serve dispersed shareholders. They purported to describe the world as it exists but, in fact, they described a utopia, and their piece was read as a blueprint for that utopia. We take a page from the sociology of knowledge to argue that, in the modern world, economic theories function as prescriptions for behavior as much as they function as descriptions. Economists and management theorists often act as prophets rather than scientists, describing the world not as it is, but as it could be. And when new theories take hold, people tend to perform the roles economists script for them

Agency Theory as Prophecy: How Boards, Analysts, and Fund Managers Perform Their Roles

In 1976, Michael Jensen and William Meckling published a paper reintroducing agency theory that explained how the modern corporation is structured to serve dispersed shareholders. They purported to describe the world as it exists but, in fact, they described a utopia, and their piece was read as a blueprint for that utopia. We take a page from the sociology of knowledge to argue that, in the modern world, economic theories function as prescriptions for behavior as much as they function as descriptions. Economists and management theorists often act as prophets rather than scientists, describing the world not as it is, but as it could be. And when new theories take hold, people tend to perform the roles economists script for them

Light-Responsive Polymeric Micellar Nanoparticles with Enhanced Formulation Stability.

Light-sensitive polymeric micelles have recently emerged as promising drug delivery systems for spatiotemporally controlled release of payload at target sites. Here, we developed diazonaphthoquinone (DNQ)-conjugated micellar nanoparticles that showed a change in polarity of the micellar core from hydrophobic to hydrophilic under UV light, releasing the encapsulated anti-cancer drug, doxetaxel (DTX). The micelles exhibited a low critical micelle concentration and high stability in the presence of bovine serum albumin (BSA) solution due to the hydrophobic and π-π stacking interactions in the micellar core. Cell studies showed enhanced cytotoxicity of DTX-loaded micellar nanoparticles upon irradiation. The enhanced stability would increase the circulation time of the micellar nanoparticles in blood, and enhance the therapeutic effectiveness for cancer therapy

Occupations, workplaces or jobs? An exploration of stratification contexts using administrative data

Occupations have long been held by sociologists, from the older status attainment tradition to the more recent micro-class tradition, to be at the center of stratification writ large. Occupations are specifically argued to be central to shaping wages. Indeed, this has been understood as the comparative advantage of sociology relative to economics in understanding wage setting. However, an undercurrent has for decades existed in sociology that suggests other contexts, mainly workplaces and jobs, may be as important if not more important stratification contexts. Until recently data with the capacity to simultaneously assess all three contexts has been virtually non-existent. In this paper we use administrative data from five countries (Denmark, Finland, Germany, Japan, and South Korea) to assess the relative contributions of occupations, establishments, and jobs to wages. Our core finding is that there is no universal link between occupations and wages, with occupations explaining between 30 and 56 % of wage variance across country-years. As well, in all countries except Finland establishments explain more of the variance in wages than do occupations. Jobs and establishment figure prominently in the social organization of wages, and must be included in theoretical models and whenever possible in empirical analyses of social stratification

Workplace volatility and gender inequality:a comparison of the Netherlands and South Korea

Workplaces have become more unstable in recent decades, but how such instability shapes categorical inequalities remains little understood. This study explores how the rise of employment precarity, re-conceptualized as an attribute of workplaces, affects gender inequality. We argue that gender inequality increases in volatile workplaces where employee tenure is short and turnover is common. In such workplaces, gender stereotyping and opportunity hoarding by men may become prevalent, because members have little incentive to acquire individualized information about each other and those who are not satisfied with unequal distribution of rewards simply leave rather than raising their voice. To test our argument, we analyze the effect of workplace volatility on the gender-wage gap, using employer–employee linked data from two separate national contexts: South Korea and the Netherlands. Leveraging on the different institutional contexts of the two countries, we also examine the moderating roles of unionization and public sector employment. Our theory and empirical findings contribute to our understanding of the workplace-level mechanisms of inequality, especially in the context of recent structural changes in the labor market

Finance and Institutional Investors

Institutional investors have come to play a central role in financial markets since the early 1970s. They controlled about three out of ten shares of Fortune 500 companies in 1970. Today they control seven out of ten. The aging of the baby boom generation, coupled with new fiduciary requirements for defined benefit pension plans, contributed to this change. Agency theory offered a litany of innovations designed to ensure that executives pursued the interests of shareholders, rather than feathering their own nests. Institutional investors promoted the theory with a vengeance, encouraging firms through shareholder proposals and private bidding to put its prescriptions into place. This article examines the role of institutional investors in promoting changes in corporate management under the banner of shareholder value. It reviews evidence that these changes did little to promote share value and that they resulted in several disadvantages for the American worker-owner.Sociolog

Corporate Board Gender Diversity and Stock Performance: The Competence Gap or Institutional Investor Bias?

Women now make up a sixth of corporate board members in the Fortune 500. Some scholars suggest that women board members boost financial performance, and thus stock price, by making boards more effective. Indeed, early studies showed a correlation between women on boards and both profits and stock price. But more rigorous studies have suggested that women have little effect on profits and may have negative effects on stock price. In a quantitative study of the consequences of female board member appointments, using data from over 400 leading corporations for the period 1997 to 2005, we find little evidence that women undermine board effectiveness but some evidence that institutional investors disfavor firms that appoint women board members. Following the appointment of a woman board member, firms do not experience decreases in profitability but do see decreases in share value. We then explore the effects of female appointments on shareholding by different groups of institutional investors. We predict that fund managers holding large positions in leading firms, whose actions are followed by the investment community, will take care not to sell off stock following accession of women to boards. We predict that the same will be true of all public pension fund managers, who have long been advocates of board diversity. But we suggest that small-holding institutional investors, and investors that do not manage public pension funds, may react negatively to the appointment of women to boards due to unwitting bias. The statistical results are consistent with the interpretation that bias among institutional investors who do not carefully scrutinize their own motives leads to reductions in shareholding after firms appoint women board members, and ensuing declines in share price.Sociolog

The misapplication of Mr. Michael Jensen: how agency theory brought down the economy and why it might again

Agency theorists diagnosed the economic malaise of the 1970s as the result of executive obsession with corporate stability over profitability. Management swallowed many of the pills agency theorists prescribed to increase entrepreneurialism and risk-taking; stock options, dediversification, debt financing, and outsider board members. Management did not swallow the pills prescribed to moderate risk: executive equity holding and independent boards. Thus, in practice, the remedy heightened corporate risk-taking without imposing constraints. Both recessions of the new millennium can be traced directly to these changes in strategy. To date, regulators have proposed nothing to undo the perverse incentives of the new “shareholder value” system.Sociolog