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.     

A global energy network? The expansion and integration of non‐triad national oil companies

It is widely perceived that the rising influence of state‐owned energy companies from outside the traditional triad (USA, EU, Japan) is transforming the structure of the global energy market and generating a new wave of resource‐nationalism. There is, however, little empirical analysis of how this process has unfolded. Addressing this empirical gap, in this article I employ a longitudinal social network analysis of the changing corporate relations of five major non‐triad state‐owned energy companies in the period 1997–2007. The findings indicate that, in terms of corporate relations, alongside the global expansion of the non‐triad state‐owned energy companies, there was also an increased integration between them and the private energy companies during this decade. This implies that apart from the resurgence of resource‐nationalism – frequently highlighted in academia and politics – this period also witnessed an increasing transnationalization of the global energy market.     

Nursing Home Ownership Trends and Their Impacts on Quality of Care: A Study Using Detailed Ownership Data From Texas

The role of ownership in the provision of nursing home care has long been a challenging issue for policy makers and researchers. Although much of the focus historically has been on differences between for-profit and not-for-profit facilities, this simple distinction has become less useful in recent years as companies have employed more complicated ownership and management structures. Using detailed ownership data from the state of Texas, we describe the evolution of nursing home corporate structures from 2000 to 2007, analyze the effect of these structures on quality of care and staffing in nursing homes, and discuss the policy implications of these changes.     

How states tighten control: a field theory perspective on journalism in contemporary Crimea

This article contributes to denationalizing Bourdieu’s field theory by analysing the relationship between a regional news media field, the state and transnational influences. The article seeks to answer the question of how a state can impose limits on the autonomy of the news media field during political transition. Field theory is applied to changes that have taken place in Crimean news media since Russia’s annexation of the peninsula in 2014. Drawing on narrative interviews with journalists who worked in Crimea in 2012–17, expert interviews, and secondary sources, I demonstrate how Crimea’s news media field went from being dominated by varied Ukrainian private news media owners to becoming dominated by the Russian state. I show that states can employ direct measures such as anti‐press violence and ownership appropriation of news media outlets in order to increase concentration of state media ownership. In addition, states can reallocate capital in the news media field, disenfranchising some journalists and outlets while favouring others. The adaptive strategies of individual journalists, who, upon losing capital, can sometimes relocate or leave their jobs, also changes the composition of news media fields. Departing from a common view of social spaces as bounded within nation‐states, I examine how the news media field of Crimea has been shaped by both transnational influences, and by the direct imposition of Russian state power through a reconstitution of national borders.     

Reclaiming the aesthetic of women: de-colonizing land ownership

ABSTRACT

This paper engages with the study of the aesthetic as an embodied form and offers a critique of the study of value and commodification that emerges in the global spatial imagination. I explore the neglected interrelationship between cultural-spatial reconstruction and land ownership as a sign of livelihood by way of a critique of development and through an investigation of the multiple traces of colonialism in Indonesia in contemporary times, after the massacres. First, land is taken from communities to be used for state and corporate industrialization, and then aesthetic acts of resistance and remembrance by members of these communities, via artistic productions and protest, are commoditized as touristic attractions by the state as a form of nationalism and fetishism of the indigenous, and by corporations as a form of corporate cultural responsibility. This new method of capitalist inclusion of the survivor in a globalized project of aestheticizing space is a neoliberal tactic in which the commoditized reappearance of the aesthetic creations of the marginalized is not, in fact, a sign of inclusion but rather of further displacement. My study follows the focus of this special issue to analyse cultural production within the complexity of multiple and converging colonial forms in historical and contemporary contexts considering the relationality, contradictions and incommensurabilities generated within converging structures of colonial and racialized violence. I locate the ways in which artistic projects within this schema may be used as acts of resistance but also possibly co-optation/ domination. Aesthetic creations intended as means of archiving may also bring insurrections into the paradigm of globalization and to its attention. This paper is an attempt to look at how the creative urge negates and also creates the possibility of resistance, inviting us to urgently rethink aesthetic projects and their representation through a genealogy of global participation.     

Web of resistance: Deleuzian digital space and hacktivism

This article argues that the Internet possesses the potential to challenge corporate and Statist domination of digital space. Mapping Gilles Deleuze and Felix Guattari’s concepts of the rhizome, smooth/striated space, and the nomad onto the idea of digital connectivity, I show how hacktivism can initiate change both online and off. In the first section, I argue that the Internet is characteristic of a rhizome. As a rhizome, the Internet’s structure affords it a flexible, morphological, and ultimately a vibrantly powerful configuration. As a result of its connective and generative power, corporate and State entities seek to control digital space. These controlling institutions stratify, segment, and claim ownership over the flat, smooth space. The second section, then, shows how the Internet becomes striated through corporate and State interests. As a remedy, the third section advocates for hacktivism as a form of nomadic action. In this section, I focus on the Distributed Denial of Service attack as a form of deterritorialization that redistributes the flow of information. Acting as a digital machine de guerre engaging in online direct action, and against the legal apparatus of the State, hacktivists create a rupture in the rhizomatic structure and form smooth spaces within a striated network. In the final section, I advocate for sustained smooth digital spaces that allow for new modes of association that radiate outward from the digital to the physical world.     

Effects of issue ownership and issue obtrusiveness on corporate reputation at two Korean corporations

This study attempts to identify the effects of issue ownership of a corporation on its reputation, and the moderating effect of issue obtrusiveness. Two representative Korean corporations (Hyundai and SK) were selected and their reputations were measured. It was shown that a corporation, which owns issues that were perceived as important by publics, has a higher corporate reputation. There was no moderating effect of issue obtrusiveness on the relationship between issue ownership and corporate reputation; however, there was a possibility of issue obtrusiveness as an independent variable. Implication for public relations research and practice was discussed.     

State-Corporate Relationships in an Era of Shifting Regime: The Case of Corporate Law Reform in Israel

Different aspects of the relationship between state and economy have traditionally been examined, yet corporate governance and specifically corporate law have received less attention. This article focuses on the legislation of the new corporate law in Israel at the end of the 1990s, which took place during regime transformation from an interventionist state to a regulatory state. The article makes specific reference to three disputes: the lifting of the corporate veil, the separation of the positions of chairman of the board and chief executive officer, and the obligation of private firms to disclose financial reports. This article suggests that despite the transformation of the regime, state actors have continuously been involved via corporate law in the governance of corporations and their relationship with the environment. However, corporate law enables corporations to constrain state power and the state's influence on property rights.     

The end of the world as we know it: Popular music's cultural mobility

Abstract

Popular music has moved to the centre of economic life, suggesting a shift in the political economy of advanced societies. The transition has been marked by a concomitant shift in the centrality of popular music in social life, assisted by new technologies. More importantly, the changes have been brought about by the reorganization of record company ownership and activity since the 1980s. This paper suggests that cultural studies could apply aspects of the research and analysis methods developed in institutional economics, to a study of the relationship between cultural and economic formations. Institutional economics, especially as proposed by Thorstein Veblen, provides a pragmatic critique for cultural industries in an era of globalization and rising corporate power. In this paper I have used institutional economics to illustrate how the shift in the organization of popular music has taken place within the corporate economy. The use of popular music as a feature of the corporate economy has involved the expansion of all forms of entertainment into the information economy. This convergence of activities and interests located in and around popular music is described by the term ‘cultural mobility’.     

Ontological Insecurity,Racial Tension,and Confidence in the Police in the Shadow of Urban Unrest

According to the theory of “ontological insecurity,” people who worry that society is in a state of decline or upheaval will also support punitive social control of deviants. I test the relationship between several measures of people's anxiety about the state of society, their perception of racial tension, and their confidence in the police (as enforcers of social control) during the period of social unrest following the death of Michael Brown in Ferguson, Missouri. I use ordinary least squares regression to analyze data from a nationally representative public opinion poll gathered for the Pew Research Center for the People and the Press during August, 2014. I find that pessimism about the state of the economy, pessimism about race relations, and the experience of personal hardship are related to decreased confidence in the police, while pessimism about the state of morals in society is related to increased confidence. I conclude that public confidence in the police is intertwined with public confidence in the stability of the country, more generally. This study supports a “neo‐Durkheimian” model of policing. The opposite findings of economic versus moral insecurity also call for refinement of the ontological insecurity theory.     

Are Latin America's corporate elites transnationally interconnected? A network analysis of interlocking directorates

Conflicting perspectives appear when thinking about the emergence of a cohesive transnational corporate network in Latin America. On the one hand, regional political integration, foreign investment growth, increased cross‐border mergers and acquisitions, and cultural and linguistic homogeneity may have fostered transnational networks among Latin America's corporate elites. On the other hand, domestic‐based business groups, family control and trade orientation to the USA may have hindered the emergence of a cohesive transnational corporate network in Latin America. Based on a network analysis of interlocking directorates among the 300 largest corporations in Latin America, I ask whether the region's corporate elites interconnect at the transnational level and form a cohesive transnational corporate network. I found few transnational interlocks, a lack of cohesion in the transnational corporate network and no regional leaders. Corporate elites in Latin America are not transnationally interconnected and so a cohesive transnational corporate network has not emerged. I discuss implications and avenues of future research.     

Of ‘Paradise’ and its underbelly: Spaces of power in the everyday of a gated enclave in Urban India

This article is set in a gated enclave of the new elite in Mysuru (formerly Mysore) city in the state of Karnataka in South India. Mysuru is a growing information technology centre that it is also undergoing urban transformation which includes international style fortified neighbourhood developments suitable for this class of highly qualified, globally mobile wealthy professionals predominantly engaged in the information technology sector. Residents in the neighbourhood seem to live in a world of their own, where they set their own rules and enforce their own sanctions. They have chosen to stay there to segregate themselves from the world outside. Ensconced in their comfortable high walled enclosures, they nevertheless allow the entry of a much polarized lower class into their homes as workers for various services, for sheer need of sustaining the grandeur of their daily lives. The neighbourhood association has become a powerful corporate and a potent tool for expression of everyday power.Using participant observation, interviews, narrative lore and other qualitative measures, the article probes the psyche of the new elite, their interaction with service classes, and the dynamics of power in the enclave. Narrating one incident as the prism that deflects several strands in the complex web of relationships, I have demonstrated the power of the residents’ welfare association as experienced, expressed and enacted in the everyday in that domain. I have argued that this power gets augmented through the fortification and essentially draws from ownership and control over spatial arrangements.     

The structure of forest ownership in Scotland: a first approximation

An attempt is made to outline the structure of forest ownership in Scotland, insofar as the available sources of information permit. Particular attention is focused on the private sector, where most recent afforestation has been concentrated and to which some forests have been transferred from the Forestry Commission in recent years. More than half of the private-sector area is now owned by personal or corporate “investment’ owners: as recently as 20 years ago the sector was almost completely dominated by the traditional landed estates. Deficiencies in sources of information are reviewed, and the importance of information on ownership, in relation to matters such as future wood production and management regimes, is discussed.     

CORPORATE CONTROL AND PERFORMANCE IN THE 1930s

This paper tests the Berle and Means thesis that the dissemination of corporate ownership has allowed corporate managers to pursue goals other than profit maximization. Using piece-wise linear regression analysis with a sample of large U.S. corporations in the 1930s, a nonlinear relation is estimated between the degree of dominant stockholder control and corporate performance. The empirical results lend some support for the Berle and Means view of the "modern" corporation. In particular, a small degree of stockholder control is found to be associated with a low level of corporate performance, ceteris paribus.     

THE TRANSFORMATION AND SURVIVAL OF FORTUNE 500 INDUSTRIAL CORPORATIONS THROUGH MERGERS AND ACQUISITIONS, 1981–1995

The 1980s leveraged buyouts followed by the 1990s stock swap mergers represent the most dynamic period in U.S. business history. Using Cox regression with time-varying covariates, we examine the relationships among changes in corporate mergers and acquisitions, changes in corporate diversification strategies, and the transition from the multidivisional form (MDF) to the multisubsidiary form (MSF) of the largest Fortune 500 U.S. parent corporations. Consistent with the political economy contingency theory of accumulation (PECTA), our findings show that acquisition risk is reduced as a function of size, product and industry diversification, and percentages of shares held by institutional investors. Acquisition risk is increased by holding units in a multidivisional rather than a multisubsidiary form, higher returns to shareholders, higher divestitures, higher production to administrative imensity, and surviving previous takeover attempts. The political-legal institutions of the state have increasingly engaged in activities that are supportive and profitable for industrial and financial corporations. The actions of the state are increasingly aligned with the interests of capital.     

The State of Media Ownership and Media Markets: Competition or Concentration and Why Should We Care?

This article presents a global overview of the state of communications media ownership and markets. The primary issue at stake is whether or not markets and ownership are becoming more or less concentrated. After reviewing contrasting views on this issue, I suggest that the question turns on whether or not we consider 'numerical diversity' (the number of channels available in any given area) versus 'source diversity' (a measure of the number of media owners in any given area). Drawing on recent data I suggest that while there is undoubtably greater 'numerical diversity', we are seeing – within countries, regionally and globally – greater concentration at the level of 'source diversity'. While new media, especially the Internet, open up unprecedented opportunities for people to access and distribute information, the emergence of a powerful nexus between both 'old' and 'new' media means that the character of media ownership and markets still matters greatly. This nexus of ownership and market power spans different segments of the media and is qualitatively different from previous times. These factors have an important influence on the evolution of media technologies and markets, the work of media professionals and the character of information and media content.     

Privatisation in Developing Countries: Performance and Ownership Effects

Over the last twenty years, privatisation, defined as the transfer of public assets (firms) from the government to private investors, has been on the reform agenda of more than 120 developing countries. The switch of ownership induces major changes in the corporate governance of firms, and in their incentives to restructure and improve efficiency and performance. This article evaluates this experience, focusing on its impact on corporate performance and governance, identifying several issues yet to be resolved.     

Business restructuring,management control,and corporate organization

Conclusions After half a century of growing dominance of the large corporation by non-owning managers, the 1980s were marked by a slowing or even reversing of their quiet revolution. Professional managers had come to control the corporation on the premise that they could more efficiently produce shareholder value than the original founder-owners. They turned shareholding into a passive investment on the same premise. As companies faced increasingly competitive pressures during the 1980s, however, the legitimacy of the rule of incumbent management came under challenge. No longer could government interference be blamed for many of the problems facing business; fingers pointed at management itself. As the criticism of corporate leadership gathered momentum, a leading diagnosis focused on one of managerial capitalism's crowning achievements: the autonomous power of professional management.The critique viewed the managerial autonomy as excessively permissive, the agency system as no longer effective. Professional managers had come to show too much concern for the social welfare of various stakeholder groups, including themselves, and too little concern for the financial welfare of the only stakeholder group that should really count — the shareholders. Many of the restructuring efforts were thus undertaken in the name of returning companies to the single-minded pursuit of ownership interests. What had stood in the way of such a pursuit was less a matter of government constraint and more a matter of inadequate stockholder vigilance by their appointed agents.Mindful of the critique, incumbent managements moved during the mid- to late-1980s to improve stockholder returns by paring the workforce and cutting other costs. Corporate acquisitions and leveraged buyouts brought new management teams to the fore where others had seemingly fallen short. The resulting restructuring reached a large proportion of the nation's major companies. Half or more of the largest companies had undergone a significant reduction in their workforce. And the dollar value of company resources changing ownership hands expanded considerably. The aggregate purchase price of mergers and acquisitions of publicly-traded firms in 1988 was nearly three times greater than in 1981. Even more striking was the sharp increase in the number of publicly-traded companies and divisions that were taken private. The aggregate dollar value of such buyouts in 1988 had increased almost 25 times over that in 1981. This opening of the market for corporate control among major U.S. firms brought a significant fraction of the nation's large corporations more directly under the immediate oversight of ownership interests.The reassertion of ownership control over large corporations was usually taken in the name of improving corporate earnings. Would be takeover groups generally promised more internal discipline and stronger financial performance. Whatever the actual financial impact of the intensification of ownership interests, available research suggests that it has had organizational impact. General company strategies may come to be more centrally guided while specific operating actions are devolved further down the organization.Ownership change and other restructuring steps have also ramified into corporate social and political action. That outreach is likely to be less vigorous and more divided. It is also being redirected. During the 1970s and early 1980s, corporate energies focused on reducing government regulation and improving community opinion. Those energies are now increasingly focused on facilitating or resisting restructuring. Companies have fought legislation that would limit the process of plant closings, but they have also sought legislation to protect themselves against hostile takeovers.The evidence also suggests that considerable managerial discretion remains in shaping company response to the restructuring pressures. Although market and organizational factors are sure to act as constraints, top management, whether a relatively autonomous non-owning management group or an owner-dominated management, retains an important independent capacity to exercise strategic choice. That choice is likely to receive special shaping by the long-term ascendance of financial managers and the decline of manufacturing personnel at the executive level.Yet corporate change must not be viewed as isolated managerial responses to changing market conditions. Companies and managements frequently look to one another for guidance in coping with ambiguous circumstances. DiMaggio and Powell's analysis of organizational isomorphism, for example, suggests that firms frequently adopt organizational practices not because they are dictated by the firm's market strategies, but rather because they are already used by other companies. Similarly, Granovetter's analysis of the social embeddedness of economic action indicates that company decisions are partially shaped by top management's contacts with their counterparts in other firms. Understanding company responses to restructuring pressures therefore requires a focus on inter-company flows of ideas and doctrines as well as purely internally generated responses specific to the company. Reactions to the restructuring pressures that are collectively developed and defined in the broader business community may prove to be as critical as individually fashioned solutions in guiding management approaches to restructuring during the years to come.

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Corporate control and enterprise structure in the Canadian economy: 1972–1987

Earlier work has examined corporate control, enterprise structure, and horizontal concentration within the Canadian economy (Berkowitz et al., 1978/1979). Moderately little change was observed in the number of firms and mappings of firms to standard industrial classification areas during the 15 year period in question. There was a considerable decrease in the number of both single-firm and multiple-firm enterprises over this time period. Mean and median enterprise size (number of firms) has increased, while horizontal integration and therefore (as they have traditionally been calculated) conventional measures of corporate concentration within industrial areas, have remained substantially unchanged except in the case of a few marginal industries. The Gini indices of the number of firms mapped to enterprises are substantially the same for the two years measured. There was, however, considerable significant and economically important change in the Canadian corporate system. This change was entirely structural and involved a considerable reduction in the number, and an increase in the strategic importance of, enterprises.     

Firm Ownership and Rent Sharing

In this paper we analyse—theoretically and empirically—how the degree of private versus public ownership of firms affects the degree of rent sharing between firms and their workers. Using a particularly rich linked employer-employee dataset from Portugal, covering a large number of corporate ownership changes across a wide spectrum of economic sectors over more than 20 years, we find that rent sharing is significantly higher in firms with a larger share of private ownership. Estimates from our most preferred empirical specification suggest that an increase in the private ownership share of 10 percentage points increases (on average) the rent-sharing elasticity by 0.0002. Based on a theoretical analysis that incorporates union-firm wage bargaining and efficiency wage effects within the same modelling framework, this result cannot be explained by private firms being more profit oriented than public ones. However, the result is consistent with a scenario whereby privatisation leads to less job security for workers, implying stronger efficiency wage effects.