Social Network Contingency, Symbolic Management, and Boundary Stretching

Strategic Management Journal, Forthcoming

Posted: 18 Aug 2013

See all articles by Lívia Markóczy

Lívia Markóczy

University of Texas at Dallas - Naveen Jindal School of Management

Sunny Li Sun

University of Massachusetts Lowell

Mike W. Peng

University of Texas at Dallas - Naveen Jindal School of Management

Weilei (Stone) Shi

City University of New York - Narendra Paul Loomba Department of Management

Bing Ren

Nankai School of Business

Date Written: August 16, 2013

Abstract

A firm’s structural position within corporate networks may affect the extent to which it engages in boundary stretching practices. Since social norms support low CEO compensation, offering high CEO compensation in China can be seen as a boundary stretching practice. Setting up a compensation committee (CC) may be viewed as a form of symbolic management in China. We argue that firms operating within central corporate network positions opt to pay higher CEO compensation without engaging in symbolic management. On the other hand, firms operating in structural hole positions tend to either pay lower CEO compensation or use CCs as a symbolic management tool in order to pay higher CEO compensation. Our hypotheses are largely supported based on 7,618 firm-year observations in China.

Keywords: Symbolic Management, Corporate Interlocks, CEO Compensation, China

Suggested Citation

Markóczy, Lívia and Sun, Sunny Li and Peng, Mike W. and Shi, Weilei (Stone) and Ren, Bing, Social Network Contingency, Symbolic Management, and Boundary Stretching (August 16, 2013). Strategic Management Journal, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2311412

Lívia Markóczy

University of Texas at Dallas - Naveen Jindal School of Management ( email )

P.O. Box 830688
Richardson, TX 75083-0688
United States

Sunny Li Sun

University of Massachusetts Lowell ( email )

72 University Ave.
Lowell, MA 01854
United States

HOME PAGE: http://https://scholar.google.com/citations?user=c-Covi4AAAAJ&hl

Mike W. Peng

University of Texas at Dallas - Naveen Jindal School of Management ( email )

P.O. Box 830688
Richardson, TX 75083-0688
United States

Weilei (Stone) Shi (Contact Author)

City University of New York - Narendra Paul Loomba Department of Management ( email )

NY
United States

Bing Ren

Nankai School of Business ( email )

94 Weijin Road, Nankai District
Tianjin, Tianjin 300071
China

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