The Global Spread of Stock Exchange, 1980-1998

Nations opened local stock exchanges at a rapid pace during the late 1980s and 1990s, creating a channel for investment capital from wealthy industrial nations to "emerging markets" as well as a mechanism for institutional change in local economies. This study examines the local and global processes by which exchanges spread, examining all nations "at risk" during the 1980s and 1990s. We find that local factors influencing the creation of stock exchanges included the size of the economy (overall and relative to population size); the legacy of colonialism; and a recent transition to multi-party democracy. Global factors associated with creating exchanges included levels of prior investment by multinationals; IMF "structural adjustment" aid; centrality in trade flows; and regional "contagion." In contrast to prior work in financial economics, we find no evidence for the influence of legal tradition, and contrary to the implications of dependency theory, we find no sign that foreign capital penetration affects the creation of exchanges. We also find no consistent evidence for the influence of stock exchanges on inequality or human development at the national level, above and beyond their effect on economic and population growth. The results indicate that globalization is usefully construed as a process analogous to institutional diffusion at the organization level.http://deepblue.lib.umich.edu/bitstream/2027.42/39725/3/wp341.pd

The Global Spread of Stock Exchange, 1980-1998

Nations opened local stock exchanges at a rapid pace during the late 1980s and 1990s, creating a channel for investment capital from wealthy industrial nations to "emerging markets" as well as a mechanism for institutional change in local economies. This study examines the local and global processes by which exchanges spread, examining all nations "at risk" during the 1980s and 1990s. We find that local factors influencing the creation of stock exchanges included the size of the economy (overall and relative to population size); the legacy of colonialism; and a recent transition to multi-party democracy. Global factors associated with creating exchanges included levels of prior investment by multinationals; IMF "structural adjustment" aid; centrality in trade flows; and regional "contagion." In contrast to prior work in financial economics, we find no evidence for the influence of legal tradition, and contrary to the implications of dependency theory, we find no sign that foreign capital penetration affects the creation of exchanges. We also find no consistent evidence for the influence of stock exchanges on inequality or human development at the national level, above and beyond their effect on economic and population growth. The results indicate that globalization is usefully construed as a process analogous to institutional diffusion at the organization level.globalization, contagion, financial markets

Celebrating Organization Theory: The After‐Party

Organization and management theory as a field faces criticisms from several scholars that it has an unhealthy obsession with ‘theory’, while at the same time seeing very little cumulative theoretical progress. Some have even accused the field of being mired in the 1970s. Lounsbury and Beckman counter with an expansive review of several thriving domains of contemporary organizational research that demonstrate the theoretical vibrancy of the field. This article responds by seeking to define ‘theoretical progress’ in ways that extend beyond just the volume of articles produced. It finds that 1970s‐era classics have seen a surge of citations since the turn of the twenty‐first century, consistent with a view of limited progress. It concludes by outlining three areas of problem‐driven research eminently worthy of attention from organizational researchers.Peer Reviewedhttp://deepblue.lib.umich.edu/bitstream/2027.42/110768/1/joms12094.pd

The Twilight of the Berle and Means Corporation

During the five decades after Berle and Means published The Modern Corporation and Private Property in 1932, their analysis became the dominant understanding of the American corporation. Social scientists, policymakers, and the broader interested public knew about the separation of ownership and control, the potentially fraught relations between shareholders and managers, and the image of the corporation as a social institution. Berle and Means’s view of an economy dominated by a handful of ever-larger corporations run by an unaccountable managerial class inspired scholarship from sociologists (who were convinced they were right) to financial economists (who wanted to prove them wrong) to lawyers (who contemplated the rights and obligations implied by this system). A decade into the twenty-first century, however, the public corporation may have reached its twilight in the United States. The “shareholder value” movement of the past generation has succeeded in turning managers into faithful servants of share price maximization, even when this comes at the expense of other considerations. But the shareholder value movement also brought with it a series of changes that have undone many core features of the Berle and Means corporation. Corporate ownership is no longer dispersed; the concentration of assets and employment have been in decline for three decades; and today’s largest corporations bear little resemblance to the companies analyzed by Berle and Means. Moreover, there are far fewer of them than there used to be: the United States had half as many publicly traded domestic corporations in 2009 as it did in 1997. In another generation, the Berle and Means corporation may be just a memory, overtaken by new forms of organization and financing

The Twilight of the Berle and Means Corporation

During the five decades after Berle and Means published The Modern Corporation and Private Property in 1932, their analysis became the dominant understanding of the American corporation. Social scientists, policymakers, and the broader interested public knew about the separation of ownership and control, the potentially fraught relations between shareholders and managers, and the image of the corporation as a social institution. Berle and Means’s view of an economy dominated by a handful of ever-larger corporations run by an unaccountable managerial class inspired scholarship from sociologists (who were convinced they were right) to financial economists (who wanted to prove them wrong) to lawyers (who contemplated the rights and obligations implied by this system). A decade into the twenty-first century, however, the public corporation may have reached its twilight in the United States. The “shareholder value” movement of the past generation has succeeded in turning managers into faithful servants of share price maximization, even when this comes at the expense of other considerations. But the shareholder value movement also brought with it a series of changes that have undone many core features of the Berle and Means corporation. Corporate ownership is no longer dispersed; the concentration of assets and employment have been in decline for three decades; and today’s largest corporations bear little resemblance to the companies analyzed by Berle and Means. Moreover, there are far fewer of them than there used to be: the United States had half as many publicly traded domestic corporations in 2009 as it did in 1997. In another generation, the Berle and Means corporation may be just a memory, overtaken by new forms of organization and financing

What Might Replace the Modern Corporation? Uberization and the Web Page Enterprise

The number of public corporations in the United States has been in decline for almost twenty years. Alternative forms of organization, from LLCs and benefit corporations to Linux and Wikipedia, provide robust competition to traditional corporations, while short-lived, project-based enterprises that assemble supply chains from available parts are increasingly cost effective. Yet our understanding of corporate governance has not kept pace with the new organization of the economy and we continue to treat the public corporation with dispersed ownership as the default form of doing business. Meanwhile, many of the corporations going public in recent years have abandoned traditional standards of corporate governance and give their founders extraordinary voting shares that effectively guarantee their control in perpetuity. The public corporation seems to be an increasingly anachronistic form of enterprise in the United States. Nikefication turned the corporation into a nexus-of-contracts, organizationally separating design from production and distribution. Entrepreneurs grew skilled at assembling contractors into a virtual enterprise. More recently we have seen Uberization, which allows on-demand labor to be contracted by the task via online platforms. Uberization threatens to turn jobs into tasks, to the detriment of labor. Every input into the enterprise becomes possible to rent rather than to buy, and employee-free organizations are increasingly feasible. Enterprises increasingly resemble a web page, a set of calls on resources that are assembled on demand to create a coherent performance

What Might Replace the Modern Corporation? Uberization and the Web Page Enterprise

The number of public corporations in the United States has been in decline for almost twenty years. Alternative forms of organization, from LLCs and benefit corporations to Linux and Wikipedia, provide robust competition to traditional corporations, while short-lived, project-based enterprises that assemble supply chains from available parts are increasingly cost effective. Yet our understanding of corporate governance has not kept pace with the new organization of the economy and we continue to treat the public corporation with dispersed ownership as the default form of doing business. Meanwhile, many of the corporations going public in recent years have abandoned traditional standards of corporate governance and give their founders extraordinary voting shares that effectively guarantee their control in perpetuity. The public corporation seems to be an increasingly anachronistic form of enterprise in the United States. Nikefication turned the corporation into a nexus-of-contracts, organizationally separating design from production and distribution. Entrepreneurs grew skilled at assembling contractors into a virtual enterprise. More recently we have seen Uberization, which allows on-demand labor to be contracted by the task via online platforms. Uberization threatens to turn jobs into tasks, to the detriment of labor. Every input into the enterprise becomes possible to rent rather than to buy, and employee-free organizations are increasingly feasible. Enterprises increasingly resemble a web page, a set of calls on resources that are assembled on demand to create a coherent performance

Corporations, Classes, and Social Movements After Managerialism

http://deepblue.lib.umich.edu/bitstream/2027.42/51348/1/584.pd

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 Emerson\u27s power-dependence theory. Recent years have seen an upsurge in the theory\u27s citations in the literature, which we attribute in part to Stanford\u27s 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 theory\u27s insights, and outline potentially fruitful areas of future research

Corporations and Economic Inequality Around the World: The Paradox of Hierarchy

Using time-series data from the US since 1950 and from 53 countries around the world in 2006, this chapter documents a strong negative relation between an economy’s employment concentration (that is, the proportion of the labor force employed by the largest 10, 25, or 50 firms) and its level of income inequality. Within the US, we find that trends in the relative size of the largest employers (up in the 1960s and 1970s, down in the 1980s and 1990s, up in the 2000s) are directly linked to changes in inequality, and that corporate size is a proximal cause of the extravagant increase in social inequality over the past generation. We conclude that organization theory can provide a distinctive contribution to understanding societal outcomes