Search results

Interest in developing institutional explanations of political and economic behavior has blossomed among social scientists since the early 1980s. Three intellectual perspectives are now prevalent: rational choice theory, historical institutionalism and a new school of organizational analysis. This paper summarizes, compares and contrasts these views and suggests ways in which cross‐fertilization may be achieved. Particular attention is paid to how the insights of organizational analysis and historical institutionalism can be blended to provide fruitful avenues of research and theorizing, especially with regard to the production, adoption, and mobilization of ideas by decision makers.

Draws on Neo‐Weberian theory to argue that commodification is itself a cultural process, whilst not discounting the potentially negative effect of commercialisation. Examines product conception in the early US recording industry citing three disparate periods. Shows that in the late 1870s, recording firms sold and leased phonographs to entrepreneurs for public exhibitions, the the late 1880s firms leased phonographs and graphophones for dictation purpose and in the 1890s, firms exploited the phonograph by offering musical recordings. Concludes that structural power helped shape the product concepts of the industry.

Of late, the business news has battered the reputation of modern capitalism as rational and efficient. As portrayed in the headlines, leaders of industry appear driven by status anxiety and hormones and pride, as well as greed of impressive proportions, rather than the pursuit of efficient production and expanded market share. In “Corporate Malfeasance and the Myth of Shareholder Value,” Frank Dobbin and Dirk Zorn explore the sources of this latest outbreak of speculation and fraud. They locate the source in the new power of business professionals, specifically stock analysts, in constructing a metric of value driven by the expected earnings (or losses) of publicly held companies. As executive compensation included ever-larger quantities of stock options, executives and stock analysts, along with institutional investors, have become entwined in a system of incentives which encourages the manipulation of these expectations, often at the expense of sustaining a productive and profitable enterprise. Rather than being driven by status anxiety, hormones or greed, financial misbehavior is both rational and rewarding.

Frank Dobbin and Dirk Zorn have admirably summed up what we know about how large U.S. corporations have been governed in the past 20 years. As such, I do not have many quibbles with their story. Instead, I would like to argue that the era of shareholder value has now come to a close. This is for two reasons. First, and most importantly, the methods and practices of financial engineering Dobbin and Zorn describe, have reached an endpoint in their ability to make corporations more profitable. The recent stock market crash is at least in part a result of investors becoming convinced that firms could not sustain the upward profit path. Second, the financial scandals of the early 1980s show the limits of these tactics. Firms like Enron and Worldcom were aggressively pursuing exotic forms of financial engineering with the help of their accountants and the forbearance of financial analysts. They, of course, veered from legality into illegality as they tried to convince investors that their futures were bright. The Oxley–Sarbanes Act has made it more difficult for CEOs to cook their books and it has pushed accounting firms out of the business of selling such advice. Financialization in the pursuit of increasing shareholder value has been given a bad name from which it is unlikely to recover. In this article, I would like to briefly describe why I think this is so. Then, I will briefly illustrate some of this through the Enron case. I conclude with some speculation about the future of the American economy.

In their original invitation, editors Kaye Schoonhoven and Frank Dobbin urged the contributors to this volume to be substantive and scholarly in their approach to their essays. I have tried to honor their request by summarizing the results of a programmatic line of scholarly inquiry on a thorny academic problem. It is also a problem of enormous and enduring real-world importance: As the world continues to confront divisive and escalating conflicts over how to share increasingly scarce global resources, we need to have a better understanding of when and why people are willing to cooperate to solve such problems.

Nine months later, after four days and nights on a bus, I was dropped off on El Camino Real, walked into campus with my backpack, and navigated my way to the Sociology Department, temporarily housed in three residential buildings, a volleyball net outside. Wow, now this is laid back, which was totally fine with me as a then legal resident of ski area. So I thought, until I started talking in more depth to Larry Wu, with whom I was rooming for the first few days. Larry had come from Harrison White's group at Harvard. Like others from that group (e.g., David Strang), he already had essentially completed a math major, along with several math-social science courses. My heart sank. Lucky, I thought, that Stanford is willing to give a Master's degrees to those who want to leave Ph.D. program!

The 1980s and 1990s at Stanford University were a uniquely productive era for research on organizations and labor markets. I describe three important, interconnected themes that characterize the research on organizations and labor markets that emerged from Stanford during this era: the central role of the firm in a multi-level system that determines labor market outcomes, the role of institutions in both creating and constraining labor market outcomes, and the dynamic, often unexpected, consequences of labor market outcomes. I describe the genesis and development of each theme and conclude by discussing what lessons can be learned from this era about creating an innovative and productive research culture.