Paying for the Dream of Public Ownership: Case Studies on Corruption and Privatization in China

The proceeding of privatization is a tradeoff between short-term equality and long-term efficiency. Under the existing structures of enterprise management and government powers, enterprise managers are likely to conspire with government officials to decide the way of ownership transformation and share the benefits from there. The transformation of ownership will enhance the efficiency of the company. Corruption indeed presses ahead the transformation of company ownership, whereas inequality is also aggravated during the process. Case studies are provided to demonstrate the relationship between corruption and privatization in China. Corruption and inequality are what the country pays for their dream of public ownership in 1950s. Equality, efficiency and maintaining current social and political structure cannot be achieved simultaneously during enterprise restructuring.

The Effect of Absentee Ownership on Local Employment Change

Abstract

To determine whether absentee-owned firms destabilize local economies, we examine the relationship between absentee ownership of manufacturing companies and employment change in manufacturing for 109 Pennsylvania towns. This issue arises because some earlier studies find that corporate connections through absentee-owned firms are positively related to local employment growth, whereas other work claims that locally owned operations are more stable. We attempt to reconcile these findings by arguing that absentee ownership is destabilizing only in the case of non-conglomerate firms. Our results show that absentee ownership in fact increases the closure rate of firms, thereby negatively affecting manufacturing employment change. Yet, this relationship differs by the parent company's organizational structure. Employment in branches of non-conglomerate firms is more detrimental than employment in branches of conglomerates — an important qualification of the argument that the “conglomeratization” of advanced industrial societies negatively affects communities.     

My company or my career: managerial achievement and loyalty

This article examines the objective and subjective aspects of managerial careers in six large firms that have experienced organizational restructuring. We begin by assessing the dominant models of change in career structures, particularly those which emphasize the 'portfolio' route to career success. Although elements of the bureaucratic career remain, we find some evidence of the shift predicted by these models amongst the younger generation of managers. However, it is striking that not all young managers are able to take advantage of the opportunities offered by the new career model. Indeed, cultural capital has an increasing impact on career achievement. Younger managers are responding by reorienting away from organizational loyalty towards a concern with individual career projects.     

The geography of corporate production: Urban,industrial, and organizational systems

This paper examines how the territorial organization of corporate production — the extent to which firms connect places in the city system through intraorganizational relationships of ownership and control — is shaped by urban, industrial, and organization factors. Specifically, we study the determinants of the dispersion of corporate production facilities in the U.S. urban system. We analyze the number of U.S. cities and states in which the largest 500 industrial corporations operated plants in 1964 as a function of the characteristics of the location of the corporate headquarters, the predominant industries in which their plants produce, and their organizational structure. We find that corporate dispersion is shaped by some of the same factors that have been shown to organize the market-based territorial division of labor — the size and functional specialization of cities and the locational requirements of industry. But in addition, organizational attributes — a firm's industrial diversity, its age, and the extent to which it is controlled by families as opposed to managerial coalitions — also influence its geographic dispersion.An earlier version of this paper was presented at the 1983 annual meetings of the American Sociological Association in Detroit, Michigan.     

The Walking Wounded: Employees’Perspectives on Mergers and Acquisitions*

Several popular and academic works have reiterated Marx's concern over the issue of social class polarization in capitalist societies. Marx characterized this polarization as the increasing concentration of wealth and poverty in the upper and lower classes, respectively, coupled with a disappearing middle class. Building on these ideas, other work suggests a process of fragmented polarization with an increasing economic, political, social, and psychological diversity within each social class. This paper illustrates this process of class fragmentation, and shows that even though the upper class is gaining overall, there are segments which are beginning to feel the effects of economic restructuring. We address corporate restructuring in the form of mergers and acquisitions and how upper- and-middle managers perceive these processes and outcomes. We conducted 33 interviews with individuals from different organizational levels, involved in four different mergers or acquisitions. We focus on the meaning these individuals attribute to these processes and changes. Although most respondents remained with the new company, all were faced with major changes in their work environment. Respondents often experienced a breach of social contract, a dramatically altered perception of managerial control and decision making, a shift from corporate loyalty to self-interest, and new forms of power and resistance. We conclude by discussing the implications of such class fragmentation, and suggest directions for future research and policy.     

The Relationship Between Corporate Volunteering and Employee Civic Engagement Outside the Workplace in Russia

This paper discusses the relationship between corporate volunteering and civic engagement outside the workplace in Russia, proceeding from a mixed-method approach. The quantitative findings are based on a comparison between employees in 37 Russian companies who participated in corporate volunteering (N = 399) and those who did not (N = 402). Using binary logistic regression analysis, we demonstrate that employee participation in corporate volunteering is positively related to four forms of civic engagement outside the workplace: informal volunteering, formal volunteering, formal monetary donation, and informal monetary donation. In addition, we draw on information obtained from interviews with 10 corporate volunteers, as well as with all 37 company corporate volunteering managers, to develop a general explanation for why corporate volunteering might lead to civic engagement. We identify three primary explanations. First, trust in companies can be converted into increased trust in social institutions. Second, corporate volunteering can expose employees to other realities, thereby leading them to rethink their priorities. Third, corporate volunteering socializes employees to volunteering, thus making them more likely to incorporate volunteering into their personal repertoires of activities. Corporate volunteering appears to be an effective mechanism for stimulating civic engagement and volunteering infrastructure in post-communist countries.     

The origins and early diffusion of “shareholder value” in the United States

The shareholder value conception of the firm and its consequences for the functioning of corporations have been studied from a variety of disciplinary and theoretical perspectives. In this article we examine in more detail than has been done sofar the origins and early adoption of this particular conception. By investigating public business sources from the perspective of field theory, we argue that the rise and early diffusion of “shareholder value” are best understood as a function of the changing power relations in the economic field during the first half of the 1980s. The deep economic recession at the end of the 1970s and early 1980s led to a crisis in the prevailing management beliefs, offering newcomers the opportunity to promote alternative business strategies, among which the shareholder value conception became dominant. The sources studied indicate that the spokespersons of the new business conception were initially wealthy outsiders, corporate “raiders,” who used the economic crisis to oppose management and acquire shares in undervalued firms with the threat of restructuring and selling parts of them in the name of shareholders’ interests. Although these hostile take-overs, or threats of take-overs, were widely contested, the Reagan administration blocked regulation and stimulated the take-over market. The rivalry between “raiders” and public pension funds over the profits of these takeovers led to the founding the Council of Institutional Investors (1985), which adopted the shareholder value doctrine inaugurating the organized activism of public pension funds with regard to the management of firms. It was thus in all likelihood the competition and conflict among different groups of shareholders, primarily corporate raiders and pension funds, that triggered the shift in the balance of power between managers and shareholders. Since managers found profitable ways to adapt to the new balance of power, the shareholder value ideology spread rapidly through the economic field, becoming the dominant business model of North American firms in the second half of the 1980s.     

Strategy and structure in the human firm: Beyond hierarchy,toward flexibility and integration

In response to global competition and a rapidly changing business environment, corporate strategies and structures are becoming more flexible and integrated. This article develops a model of the flexible, integrated firm, a model that focuses on corporate strategy and organizational structure. The flexible-integrated (FI) firm's mode of operation represents tendencies present in high performance, global companies, particularly as these companies have been understood by leading managerial thinkers. The FI-Firm's operations are contrasted with the hierarchical (H) firm. The H-Firm incorporates strategy and structure in a very different way, which reflects the dominant operating mode of the large Western corporation during much of the second half of the twentieth century. Given the nature of today's competition, there are many reasons for believing that the FI-Firm is not only more flexible but also more efficient than the H-Firm.     

What Would You Sacrifice? Access to Top Management and the Work–life Balance

This article is based on a current research, combining quantitative (human resources figures and statistics) and qualitative data (60 interviews with career managers, top managers and high potential talents, both men and women), conducted in a major French utility company on the subject of diversity and more specifically on the issue of women's access to top management positions. The main purpose of this research is to understand the difficulties women may encounter in the course of their occupational career linked to organizational aspects, including the ‘glass ceiling’ processes, informal norms related to management positions (such as time and mobility constraints) and social and cultural representations attached to leadership. The other perspective of this research focuses on the different strategies women and men build either to conform to the organizational norms or bypass them. The issue of work–life balance are therefore addressed both from a corporate/organizational standpoint and an individual and family perspective.     

It's Not What You Do,But Who You Are: Informal Social Control,Social Status,and Normative Seriousness in Organizations

This paper analyzes the impact of managerial social status on the normative evaluation of managerial acts in organizational contexts. We test several propositions on the relationship between social status and normative evaluation derived from Donald Black's theoretical framework on social control. The research design consists of a factorial survey of 200 managers. Each respondent evaluated the seriousness of a normatively questionable managerial act. In each vignette, the perpetrator's social status was systematically manipulated in either a high or a low condition. The results generally support the argument that the higher a manager's social status the less vulnerable that individual is to unfavorable normative evaluations, holding constant the act. The paper closes with discussion of our findings in light of social structural and rational choice perspectives on informal social control in organizations. Additionally, we discuss methodological issues related to experimental research on informal social control in organizations, the consistency of our findings with those from previous studies of social control across diverse settings, potential theoretical applications and extensions of Black's framework in organizational contexts, and practical implications for the implementation of corporate codes of conduct and corporate dispute resolution systems.     

Flexible work schedules, older workers, and retirement

Older workers in the United States indicate that they would prefer flexible work arrangements rather than abrupt retirement, yet management has done very little to make this possible. A review of two bodies of literature from the late 1980s is presented: social science writings including sociological, gerontological, and economic literature, and business and management literature. There is a clash between the way jobs are traditionally scheduled and the needs of growing numbers of older workers. Workers continue to be subject to obstacles to phased retirement due to the structuring of health care and pension benefits, downsizing, organizational inflexibility, and "corporate culture." Thus, general views among social scientists regarding the desirability of flexible schedules toward retirement will not produce real changes unless management becomes committed to such changes and they are securely embedded in company policies.     

THE IMPACT OF FINANCIAL RESTRUCTURING AND CHANGES IN CORPORATE CONTROL ON INVESTMENT AND EMPLOYMENT IN THE U.S. PETROLEUM INDUSTRY

This article investigates the effects of changes in market conditions and the financial structure of domestic petroleum firms on employment and investment in offshore oil leases. Important theoretical issues include the extent to which managerial power in firms has been challenged by intervention from financial markets and institutional investors and the effects of changes in financial control on employment and inventory investment. A pooled cross-section time series data set was assembled for forty large oil companies for 1978–1989. A dynamic analysis of company employment levels and investment in offshore oil leases in the Central Gulf of Mexico reveals that falling oil prices and lower domestic oil consumption reduced spending on offshore leases. Some support was found for the agency theory's claim that lower free cash flow reduced spending on offshore leases in the late eighties. Support was also found for an executive defense strategy (Useem 1993), where petroleum company managers reduced lease spending and employment as an adaptation to changes in market fundamentals and external threats from capital markets and institutional investors.     

WORKERS, FIRMS, AND THE DOMINANT IDEOLOGY:

Theorists of work and class relations have argued that organizational processes within the monopoly 'core' induce employees to identify with the firm and consent to the social relations of production. The adequacy of this 'hegemony' thesis is evaluated using data from two Bell operating companies, whose workers hold relatively high-paying primary sector jobs and are exposed to a strong corporate culture. Although these factors should favor the thesis of managerial hegemony, the data provide only limited support. In fact, an oppositional consciousness is fairly common among the workers, but with marked variations between occupational groups. The data indicate that hegemony theory inflates the role of ideological mechanisms in the reproduction of managerial control and underestimates workers' capacity to form a critical consciousness of the employment relationship. Worker consent should be viewed as problematic—that is, as exceptional, occurring only under specific social and organizational conditions.     

Liability of Foreignness and the Uses of Expatriates in Japanese Multinational Corporations in the United States

This paper examines the factors which determine the use of expatriates (parent company managers) in Japanese multinational corporations in the United States, addressing the issue of "liability of foreignness" in establishing new ventures in an international context. The paper attempts to explain theoretically the variance in the proportion of expatriates used across these United States subsidiaries, drawing on the resource dependence theory. Previous research suggests that when liabilities of foreignness are high, and when there is a need to develop organizational forms that insure reliable resource flows to coordinate activities, then Japanese multinational corporations will substitute expatriates for local personnel. Data on 3,119 corporate establishments are derived from the section on the United States of Kaigai Shinshutsu Kigyo Soran [List of Japanese-Owned Firms Abroad] (Toyokeizai 1995), seeing Japanese expatriates as agents who engage in transactions of necessary resources with surrounding corporations and with the parent companies.     

Organizational Restructuring and the Achievement of an Equal Opportunity Culture

The Opportunity 2000 Campaign has recognized that equal opportunity policy change has to be accompanied by a process of culture change in organizations. However, sustaining commitment to an equal opportunity culture may be a difficult task in times of rapid and varied organizational change. In particular, the volume and scope of ‘restructuring’ that follow mergers, acquisitions, divestment, the introduction of internal markets, and other changes in business strategy often lead to ‘downsizing’, ‘delayering’, and outsourcing of business functions. This can have very variable outcomes for the careers of women managers. For them the experience of organizational restructuring is akin to participation in a lottery in which they are occasionally winners, but usually losers. This is the main finding from in-depth case studies of three large organizations in the public sector, pharmaceuticals, and financial services, which have all experienced some form of ‘restructuring’ over the last five years. The main conclusion of this research is that unless restructuring involves an expansion of managerial positions it is likely to disadvantage women managers. The reasons for this are that it leads to job losses in functions where women are concentrated; highlights the disadvantages of poor line manager support; reinforces exclusion from the valuable informal organizational networks that provide access to career development opportunities; and renders formal equal opportunity policy monitoring ineffective. These findings have considerable implications for organizational and national policy initiatives to achieve an equal opportunity business culture.     

Inclusion of persons with disabilities in mainstream employment: is it really all about the money? A case study of four large companies in Norway and Sweden

This study investigates how large companies respond to public policy measures to ensure the inclusion of persons with disabilities in mainstream employment based on a case study of four companies in Norway and Sweden. The qualitative interviews, which were conducted with company managers, government representatives in Norway, and non-governmental organisations in Sweden, revealed three overarching themes: (1) ‘legitimacy’, (2) ‘financial interests’ and (3) ‘non-financial support’. The results indicate a more proactive response from the Swedish companies, especially regarding persons with intellectual and learning difficulties. The Norwegian companies reveal a high commitment to their own employees. These findings cannot be explained solely using neo-institutional theory, which holds that organisations demonstrate ‘conformity with powerful institutional myths to strengthen support and secure survival'. The results indicate that inclusive targeted corporate policies and programmes, advisory support, and the agency and value choices of the management might matter more.     

Baoren Baoguo: Zhongguo Xinwenshi De Lingyizhong Dufa [To Serve the Nation: Journalists as Prisms of Chinese Press History] edited by CHIN-CHUAN LEE

Social networking sites (SNS) have become an important vehicle for corporate communication. However, there has been little research on how East Asian firms use international SNSs to communicate with global stakeholders. This study compares the communication strategies of Chinese and Japanese companies on Facebook and Twitter and analyzes the public responses and complaints on these corporate SNSs. The results revealed that in addition to the traditional strategies of corporate ability (CA) and corporate social responsibility (CSR), Chinese and Japanese firms adopted the human interest (HI) strategy. The results showed that the Chinese companies in the study sample had a stronger preference for the CSR and interactive strategies, and they responded faster to online complaints compared with the Japanese firms, which were more likely to adopt the strategy of transferring in handling complaints. Moreover, “inviting participation into events” and “seeking specific feedback” were two types of interactive messages that received the highest numbers of responses from the public on Facebook, whereas “promoting sales” showed the highest engagement on Twitter. This study is the first to compare the effectiveness of different corporate response strategies for specific complaint topics on social media. Thus, it contributes to the literature on stakeholder–company interactions.     

From old school hunches to departmental lunches*

Despite the steady supply of books on management we still have very few sociological accounts of managerial work and organisation within particular firms and industries. Through first-hand observation and over twelve months intensive interviewing, the authors were able to uncover a virtual anthropology of managerial ideology, generational conflict, career and intra-managerial politics and arbitration in four manufacturing firms. One such case-study firm is presented here. Despite being riven with conflict between an Old School and a New School ascendant, and between conflicting patterns of industrial bureaucracy, ‘Parkers’ is a highly successful company. The use of an external firm of management consultants has helped keep the peace, but beneath the surface there is persistent instability, barely concealed by official euphemisms. Under pressure from the trade unions, from instrumental young managers, and above all from external control by overseas HQ, the Old School believed it is making its last stand. All names and places have of course been changed.     

Public Relations Practitioner Role Enactment at the Senior Management Level Within U.K. Companies

This article presents the findings of an initial investigation into the role that the public relations function plays in some of the leading companies in the United Kingdom. The study sought to uncover the pattern of practitioner role enactment within these companies and, in particular, the extent to which practitioners are involved directly in the formulation and implementation of corporate and business strategies. The study revealed considerable differences in the level of practitioner involvement in strategic decision making, with some practitioners fulfilling primarily technical roles and others enacting a more significant managerial role, advising senior executives on policy issues and assisting in the implementation of strategies. Factors such as the industry and organizational context, management expectations of public relations, and the perceived professional competence of practitioners emerged as important determinants of the level of practitioner involvement in strategic decision making. Drawing on the study's findings, a number of propositions have been advanced that may help to guide future inquiries into practitioner role enactment, particularly at the senior management level within organizations.     

TAKEOVERS: MANAGERIAL INCOMPETENCE OR MANAGERIAL SHIRKING?

Agency theory identifies managerial shirking as the cause for takeovers, while other explanations focus on low ability managers. This paper formalizes Jensen's free cash flow variant of agency theory by constructing a simple two-period game which captures the distinctive empirical implications of the two theories.
Using data for petroleum firms following the oil price shock of 1979-80, we find that firms undergoing financial restructuring exhibited higher values of Tobin's q. Additionally, evidence of management turnover and workforce cuts emphasizes that takeovers appear primarily designed to address agency concerns.