Understanding Corporate Participation in Local Relational Networks: Corporate CEO Membership on Large Locally Headquartered Commercial Banks Boards in the 1960s

Abstract

Recent theory and research suggests that local relational networks among business organizations play an important role in establishing and preserving a locale's identity. Such networks facilitate the development, dissemination, and enforcement of norms and cognitive frames that guide local business behavior. They also provide a vehicle for the consolidation of local business interests and for the coordination of local business strategic action. We examine the factors that influenced the likelihood that the CEOs of large corporations sat on the board of directors of large locally headquartered commercial banks in the 1960s. We focused on the 1960s because doing so allows us to make use of an exceptional comprehensive data set on the attributes and relationships of large firms and their leaders. We examine connections to commercial banks because these banks played a crucial role in community development in the 1960s. We find that both the class attributes of corporate CEOs (as reflected in their ownership of the firm and their affiliation with elite educational, social, and policy-making institutions) and the organizational attributes of their firms (as reflected in their financial structure, geographic reach, and age) influenced a CEO's propensity to sit on the board of a locally headquartered bank. These results suggest that future research on participation in local relational networks should take into account both class and organizational theories. They also suggest that future research on the class and organizational underpinnings of relational networks should pay closer attention to spatial relations.

Citation

Palmer, D. and Zafonte, M. (2011), "Understanding Corporate Participation in Local Relational Networks: Corporate CEO Membership on Large Locally Headquartered Commercial Banks Boards in the 1960s", Marquis, C., Lounsbury, M. and Greenwood, R. (Ed.) Communities and Organizations (Research in the Sociology of Organizations, Vol. 33), Emerald Group Publishing Limited, Leeds, pp. 283-331. https://doi.org/10.1108/S0733-558X(2011)0000033012