\u3cem\u3eThe Modern Corporation\u3c/em\u3e as Social Construction

Classic works, Mark Mizruchi and Lisa Fein argued, share a particular fate. Authors often cite classic works without reading them—or without reading them carefully. . . . Yet perhaps no single work fits the above description better than one of the most important books on the large corporation ever published: Adolf Berle and Gardiner Means’s The Modern Corporation and Private Property. One can speculate that few works in the social sciences have been as often cited and as little read. As a consequence, we would expect The Modern Corporation to be a good candidate for either selective interpretation or outright misinterpretation. And as we shall demonstrate, the book did indeed receive such treatment. . . . First, we present what we see as Berle and Means’s primary contributions in The Modern Corporation. Second, we describe various interpretations of this classic and situate these interpretations in their historical contexts. Third, we discuss the extent to which these interpretations provided an accurate account of the state of the American corporation and American business in the post-World War II period. We argue that these interpretations can be reconciled when we take into account the countervailing forces of the state, labor, and the financial community that created the conditions for a moderate, pragmatic approach to corporate governance. Finally, we discuss the changes that have occurred since the postwar period, from the 1970s on, and assess the fate of The Modern Corporation in light of those changes

\u3cem\u3eThe Modern Corporation\u3c/em\u3e as Social Construction

Classic works, Mark Mizruchi and Lisa Fein argued, share a particular fate. Authors often cite classic works without reading them—or without reading them carefully. . . . Yet perhaps no single work fits the above description better than one of the most important books on the large corporation ever published: Adolf Berle and Gardiner Means’s The Modern Corporation and Private Property. One can speculate that few works in the social sciences have been as often cited and as little read. As a consequence, we would expect The Modern Corporation to be a good candidate for either selective interpretation or outright misinterpretation. And as we shall demonstrate, the book did indeed receive such treatment. . . . First, we present what we see as Berle and Means’s primary contributions in The Modern Corporation. Second, we describe various interpretations of this classic and situate these interpretations in their historical contexts. Third, we discuss the extent to which these interpretations provided an accurate account of the state of the American corporation and American business in the post-World War II period. We argue that these interpretations can be reconciled when we take into account the countervailing forces of the state, labor, and the financial community that created the conditions for a moderate, pragmatic approach to corporate governance. Finally, we discuss the changes that have occurred since the postwar period, from the 1970s on, and assess the fate of The Modern Corporation in light of those changes

Cohesion, equivalence, and similarity of behavior: a theoretical and empirical assessment

Network analysts have debated the extent to which cohesion versus structural equivalence serves as a source of similar behavior among actors. More recently, role equivalence has emerged as an alternative to structural equivalence. Using data on the contribution patterns of corporate political action committees, I examine the effect of various indicators of cohesion, structural equivalence, and role equivalence on the extent to which firms behave similarly. Although various operationalizations of all three concepts are correlated with similar behavior, the most consistent predictor is the joint prominence of two firms in the network. I argue that this common location in central positions is a form of role equivalence, but one that is distinct from conventional definitions of the concept. I then suggest a distinction between what I term `central' and `peripheral' role equivalence.Peer Reviewedhttp://deepblue.lib.umich.edu/bitstream/2027.42/30604/1/0000241.pd

Berle and Means revisited: The governance and power of large U.S. corporations

In The Modern Corporation and Private Property (1932), Berle and Means warned of the concentration of economic power brought on by the rise of the large corporation and the emergence of a powerful class of professional managers, insulated from the pressure not only of stockholders, but of the larger public as well. In the tradition of Thomas Jefferson, Berle and Means warned that the ascendance of management control and unchecked corporate power had potentially serious consequences for the democratic character of the United States. Social scientists who drew on Berle and Means in subsequent decades presented a far more benign interpretation of the rise of managerialism, however. For them, the separation of ownership from control actually led to an increased level of democratization in the society as a whole. Beginning in the late 1960s, sociologists and other social scientists rekindled the debate over ownership and control, culminating in a series of rigorous empirical studies on the nature of corporate power in American society. In recent years, however, sociologists have largely abandoned the topic, ceding it to finance economists, legal scholars, and corporate strategy researchers. In this article, I provide a brief history of the sociological and finance/legal/strategy debates over corporate ownership and control. I discuss some of the similarities between the two streams of thought, and I discuss the reasons that the issue was of such significance sociologically. I then argue that by neglecting this topic in recent years, sociologists have failed to contribute to an understanding of some of the key issues in contemporary business behavior. I provide brief reviews of four loosely developed current perspectives and then present an argument of my own about the changing nature of the U.S. corporate elite over the past three decades. I conclude with a call for sociologists to refocus their attention on an issue that, however fruitfully handled by scholars in other fields, cries out for sociological analysis.Peer Reviewedhttp://deepblue.lib.umich.edu/bitstream/2027.42/43654/1/11186_2004_Article_5383516.pd

The future role of the chair in Europe

This final chapter offers a forward-looking view that emerged from our research on how the chair’s role and functions will evolve over the coming decade. As is often the case in the corporate governance domain, such changes will be evolutionary rather than revolutionary, but their impact will be felt across multiple dimensions. In this chapter we identify changes pertaining to: i) the chair’s demographic profile; ii) the role, tasks and capabilities of the high-performing chair in light of key developments; and iii) the impact of technology on the way in which the chair works. This chapter focuses on an identifying and discussing three main drivers of the role and required capabilities of high-performing chairs over the next decade: a) shareholder activism and engagement, and sustainability; b) the increased frequency of business disruptions; and c) board leadership of corporate culture. These factors will combine to make the chair’s role not only more challenging and demanding, but also more important and indeed pivotal. The chair will sit at the apex of the corporate governance system overseeing a more complex, more uncertain and ambiguous environment. As the next decade progresses, the chair’s position will rise to prominence at the top of our organizations, eclipsing that of the CEO. We begin by discussing some of the demographic trends we can currently observe regarding the chair position – and which we envisage continuing in the next decade. Next we discuss the three key factors that we believe will come to shape the chair’s role and define the capabilities required to be effective in that position. A section then follows on how new technology in the boardroom will affect the chair’s role. The chapter concludes by considering the balance of the chair’s role in terms of monitoring versus stewardship

Social Network Analysis: Recent Achievements and Current Controversies

Network analysis has grown rapidly over the past two decades, but criticisms of the approach have increased as well This article focuses on several accomplishments and unresolved problems of the network approach In the first section. I illustrate the value of the network model in several substantive areas. focusing on studies of centrahty and power, network subgroups, and interorganizational relations I then discuss three issues over which the approach has provoked controversy the relation between network analysis and rational choice theory; the role of norms and culture, and the question of human agency I conclude with some examples of how network theorists are addressing these problemsPeer Reviewedhttp://deepblue.lib.umich.edu/bitstream/2027.42/68023/2/10.1177_000169939403700403.pd

Small worlds and board interlocking in Brazil: a longitudinal study of corporate networks, 1997-2007

Social Network Analysis (SNA) is an emerging research field in finance, above all in Brazil. This work is pioneering in that it is supported by reference to different areas of knowledge: social network analysis and corporate governance, for dealing with a similarly emerging topic in finance; interlocking boards, the purpose being to check the validity of the small-world model in the Brazilian capital market, and the existence of associations between the positioning of the firm in the network of corporate relationships and its worth. To do so official data relating to more than 400 companies listed in Brazil between 1997 and 2007 were used. The main results obtained suggest that the configuration of the networks of relationships between board members and companies reflects the small-world model. Furthermore, there seems to be a significant relationship between the firm’s centrality and its worth, described according to an “inverted U” curve, which suggests the existence of optimum values of social prominence in the corporate network